Retirees who depend on fixed income are among those who will be affected most by the soaring inflationary costs. Experts say there are various ways for retirees to consider surviving the ongoing 40-year high inflation.
The consumer price index (CPI) surged 1.2 percent in March, the biggest monthly increase since September 2005, the Labor Department said on April 12.
In the 12 months through March, the CPI accelerated by 8.5 percent, the largest year-on-year gain since December 1981, followed a 7.9 percent jump in February.
Experts say the retirees should cut their spending and invest more cautiously with coming rate hikes in mind.
Cutting Spending to Match Inflation
“The first step is to review your budget and try to cut your spending by at least 10 percent to compensate for inflation,” Andrew Latham, a certified personal finance counselor and director of content at Super Money, told The Epoch Times.
Potential ways to attain that goal include using coupons, cooking at home more, comparison shopping, and cutting down on more expensive foods such as meat, seafood, and alcohol.
“It may also be wise to put off expensive vacations and do more activities close to home to cut down on gas expenses,” he added.
Lyle Solomon, a consumer finance expert and principal attorney at Oak View Law Group, also suggested that “cutting costs is one of the simplest methods to deal with this scenario.”
“It’s a good idea to review your cable TV package, cell phone package, and home and vehicle insurance providers right now. Regardless of inflation or other world events, these services consistently increase yearly. If you negotiate with your existing cable and cell phone providers, you may be able to get cheaper rates. If not, get a quote from one of their competitors. Remember, you’re on a tight budget, so save as much as you can,” he said.
Pensioners can also raise the deductibles in their existing homeowners’ and auto insurance plans if the current amount is modest.
Delay Collecting Social Security Benefits
Postponing retirement, delaying social security benefits, or returning to the job market are also options, experts say.
“Delaying Social Security benefits can help protect against inflation if you have enough funds to retire and are in pretty good health. Even though Social Security benefits are inflation-protected, postponing will later result in a larger, inflation-protected payout. All of this is subject to revision, so make sure you stay up to date on any future changes to Social Security payments,” Solomon suggested.
“Waiting longer before you start collecting social security pays back considerably,” Latham said.
By Allen Zhong