My husband has retired but although I could, I have chosen to keep working.
Hitting the grocery store to buying standard items on a weekly basis, we have noticed the increase in prices of 35% in the last few years.
In the 70s' that was known as inflation although that term doesn't appear to be politically correct in this century.
Being self employed in a small retail business, I've noticed the same runaway inflation when restocking merchandise.
It makes me wonder how those who have retired can make ends meet. I know the COLA raises don't cover this cost. What other retirement income do you have? Or what cut backs have you made to survive?
Surely this has to eat in to your retirement funds and investments. How do you hedge against it?
For me the thought of retirement is scarier than working... lol
Are you keeping inflation from eating your retirement funds?
My husband has retired but although I could, I have chosen to keep working.
I head you podster! I look at our monthly 401k statements and wonder the same thing. DH and I are both Government retirees and he also had a military retirement so is a 'double-dipper'. We both returned to the workforce after Government retirement and built up 401k's to supplement our later years. I'm still working just because I enjoy it but DH is now totally retired for about 3 years. We have seen those 401k's stagnate and our Government pensions stay the same (as we expected). I'm with you...I see exactly what those on fixed Social Security income are facing and it isn't pretty. The 'hedge' we have is to just keep pumping money into it and hope the economy turns around eventually. At least it's growing. We're also pretty much debt free so that's another hedge. We've cut back on big purchases as much as we can, although we don't deny ourselves vacations. We don't spend as much on Christmas gifts for each other or for our kids and grandkids like we did when they were smaller. Same with birthday gifts. We grow more veggies and eat less. We never ate out a lot and still don't.
We have a large garden and I do a lot of canning... and we both love wild game, so we stock up on deer and squirrel for the freezer... and buy meats when they are on sale.... Larry loves his thick ribeyes, and so we do them at home rather than eat out much..but we don't do them often.. Also, Larry is getting his boat ready for the river for fishing... and hopefully he can get lots of catfish and perhaps some crappie and bass..
We are cutting back on our Christmas spending this year too.. and same with Cards.. I need to eat less anyway. cuz plainly speaking.. I iz too fatt.. LOL
Glad to know I am not alone in these thoughts.
OutsidePlaying, like you, I enjoy my work and the people. I do yearn for time to do what I want to at home and am always amazed at friends that are lost in their retirement but we are all different.
I also agree, being debt free is definitely a hedge. Looking at buying a newer truck (won't be brand new) and it will be paid in full when purchased. My husband has always said you can't get ahead by sharing your money with the banks, credit cards, etc in interest.
We've also never been big fans of eating out and even less these days so that isn't a cut to be made. lol
Carolyn ~ gardening and preserving would be the one thing I'd enjoy having more time for and you are fortunate to be able to do so. Also time to hit farmers markets which are a bit of distance from home. We haven't hunted or fished for years due to work but have friends that keep us supplied with assorted meats. Not a problem as I'm not a big carnivore.
I never have done Christmas gifts other than the little ones and there are too many to spend much on any of them. I will still do Christmas cards as family lives far away and it is fun to stay in touch. I have noticed in recent years less cards being sent by friends though.
My poor sister in law... her husband was looking to retire within the year. Their investments have been dwindling and their two girls families are struggling. It is a sad sign of the times but she and her husband are also attempting to help them so it will be even more difficult to retire in the manner they wished. I am hearing of more family units rejoining to make ends meet.
Looking forward to hearing how others are squeaking by... Kristi
Great thread guys. I've started using coupons,shop sales.. It is making a big difference. I always check out Salvation Army and thrift stores for home articles. Clothes and shoes I buy new.Which I don't need a lot of.
I live 30 miles from town and have cut the trips to town to once or twice a week. I'd like to cut trips more.Am working on it. Also need to work on cutting utilities more.
I don't cut my pets expenses any.
Thanks for the ideas Vickie ~ I've noticed as I get older, I don't clothes shop much. Perhaps because with age I bought more conservative clothing rather than stylish items.
I haven't noticed us cutting back on fuel used so we haven't stopped going (although we don't do much) and we ride together and make the trip to the grocery on the way home from town. I could probably shop out of town and save more money but would spend more money on fuel so not worth that effort.
I do agree on my pets' expense and do spend a fair amount there with this menagerie.
Thanks for joining in. Apparently most folks don't struggle with this and they are fortunate. Kristi
I have been retired for nearly 10 years and doing okay. However, one expense I don't see mentioned here thus far is medical costs. I was healthy most of my life and then all of a sudden started adding this prescription, that prescription, etc. Likewise for my wife. With two in the household, medical costs (insurance and prescription) can easily absorb half of the household social security income. Rising medical costs are here to stay. Pharmaceutical companies spend billions on research and development but they want their money back when they bring a new drug to the market. R&D is a good thing but is there a law of diminishing returns ? There are no easy answers. And, it's hard to believe that in the year 2012 one is getting close to 100% less in bank interest than 50 years ago. Retirees who are basically living on their savings are, in fact, subsidizing society in an attempt to save the economy. At 1% or less in interest, we should all take our money out of the bank and put it under the mattress. Thus, creating a demand for our savings.
We live in sad times except for the people on Wall Street and the corporate executives that receive large bonuses each year when, in fact, their company lost money. How can anyone justify paying a bonus in an unprofitable operation ? Why are people rewarded with bonuses to do what they were hired for in the first place ? In the end, the rich get richer and the poor get poorer and the middle class (whatever that is) picks up the tab.
I could go on and on ............
By the way, the only way to keep pace is to put your money in the market in mutual funds comprised of a "conservative" diversified portfolio. Of course there is some risk but then, so is outliving your savings.
Sad, indeed. Some risk is ok as long as you are covered by some stability elsewhere. And make sure if you do have any savings in a bank it is in an insured bank!! With a lot of banks being sold off or taken over by foreign interests, it pays to watch these things!
I too wish I had more time for canning and freezing. I did do more this year than in the past, mostly because my garden was so prolific this year. I did share the bounty with my co-workers too, and managed to can and freeze a lot of tomatoes, sauce, peppers, and made a lot of apple butter (not our apples) but will use it as gifts too. We don't hunt anymore but occasionally buy meat in bulk to save there. I hope to branch out to more variety in the garden when I retire and have more time to spend tending it.
Kristi, we still do Christmas cards too, but not as many as in the past, and mostly to those we don't see often. We too have seen a drop in the number we receive.
Our savings are minimal (& in a credit union) and being accumulated for purchasing a newer model vehicle which we are in the market for. In our 43 years together, we've never bought a new ride by choice.
I personally want my savings invested in something tangible. I feel money in the bank is becoming worth less by the minute. There are sound investments like land and other valuable assets. One of the best investments we made was a commercial property that we bought cheaply. It has repaid us many times over. I'm not sure I would want residential rental property as past experience was not as rewarding.
Linthicum ~ I empathize with the medical costs as we age. My husbands' health issues began when he was 56 so we bore the expense ourselves until he turned 65 and now we actually feel like we got a raise by having less outgo to the medical community. Even enjoyed a reduction in insurance expense. Sadly the drug expense is a major issue but I've found there is assistance out there when needed. Our best defense has been less meds. It seems more medicine causes more problems which require more medicine just like a dog chasing a tail. As for me, I am health conscious in an attempt to require minimal health care ~ fingers crossed it and good genetics will work.
Has anyone noticed less mail? More email, facebook communications and less letters, cards, etc. Even bills online and I'm now doing some of my bill paying online. The bank charges nothing for the bill pay service so save stamps, envelopes, checks, time.
Yes, Kristi!! I agree with respect to putting more money towards tangible assets. We invested in a lakeside condo a few years back and I know it was a great choice, both for the enjoyment now for us and our family but also for re-sale. It is 30 minutes from our home and I know we could sell it for a profit today. We have made minimal investment in it as far as changes, and would likely sell it furnished which could net a few more bucks. We also have a couple of pieces of rental property that is stable. Same renter in one that has been there over 10 years. Another is also a good purchase and can easily be sold for a profit in a great neighborhood.
I haven't noticed less mail...still get way too many catalogs and junk mail but do get less 'real' mail due to fewer bills and on-line auto-payments I've set up with my bank account. It's way easier and I can still check my accounts to make sure the charges are accurate. You're right - saves stamps, checks, and time for me for sure.
Glad you have good luck with the rental properties. For those whose income would affect their social security earnings, I don't believe rental income affects it.
still get way too many catalogs and junk mail
Living out in the middle of nowhere. I injoy even the junk mail.It also makes good mulch under leaves.
Paying bills by snail mail is something I injoy. So my bills all come by post. Also do christmas cards,tho you can do those by e-mail too.
I'll injoy all the seed catalogs after Christmas. Than in January I'll send for different states vacation pamplets.I also take quite a few magazines. I support my local postoffice. LOL
Absolutey, I enjoy the seed catalogues too. I do still receive my bills through the mail for a reason. As I take care of all that, if something happens to me, my husband would be blissfully ignorant about our debts until the utilities got turned off. lol
I think I'd be tempted to shoot someone that sent me a Christmas ecard. We have lived across the country from family for years and I resented anyone that sent a card with only a signature. I'd rather have received a newsy letter and no card and still feel that way. One stepdaughter sends the most fun letter and cute card with the gifts. I always thank her for the gifts but tell her we far prefered just hearing from her. In these times, letter writing is a thing of the past I am afraid.
Oh Pod, I am so glad you are not on my Christmas list. I love the Jacquie Lawson ecards and for a small fee I can send those to some of my younger friends who have computers and then I send the traditional cards to the older folks who do not go online. I not only save time but postage and I even send to people I see frequently, which when I was writing all the cards I did not to save postage. That is such a small savings when you think of what it costs to live today. But, every little bit helps. At least it helps me think I am saving something.
It is interesting most of you are out in the West or Mid West. I am here on the coast in NJ and of course so many people are much worse off than I am. We had minimal damage from the hurricane than many of our friends and the devastation is unbelievable. Just a few miles from us it looks like a war zone. So scary.
So very sad too.
I would like to tell you part of my life story.
I am 84 years old and moved to NJ from PA in 1987 when I was in my 60's to take a job that was only for a few years then retire. I never did retire from the actual workforce until Oct. 1995. I still have an online flower business because I am not one to retire completely. I find it better for me to keep busy. My husband died just four years after we moved here. He had retired early from his teaching job and he also retired from the USMC as a Major. So, we sold our house in PA and just moved. I am not sorry we did that, but just now I doubt there is a more expensive place to live than here in NJ. I have several pensions (not big ones), his USMC pension and SS as income. We had a small farm I sold about 8 years ago and built an extension on my kids house on their farm just down the road. They were getting nervous with me being in my 70s living alone. So, here I am and here I will stay. No nursing home my kids say. I felt with all of the above I would be in good financial shape BUT I lost a little money when the Market went down. The other interest income has diminished to almost nothing worth talking about. The past four years have been very difficult because I help pay the expenses here on the farm. I run the business out of here and I have some of the property in my plants...plus I want to give it to them now rather than have them pay tax on it when I die. I am finding as I go along I must use my savings at times if I want anything extra and it is scary. If I live too long I could run out of extra money. The kids would care for me, but I am so independent that would kill me to have them have to do that.
I am trying to give you an idea what a very old person is going through just now. I have no faith in the government anymore. As someone said earlier in this thread, the Military and Government COLA was frozen for years and when we did get a raise it was small and this past year it got even smaller. The taxes are now going up again. I of course am very dependent on the Military retirement and benefits and I understand they are cutting back on our healthcare as well as other benefits again. It took us so many years of hard knocks to get what we have and now it is being taken from us. This I resent so much when I look back on how hard it was to raise and educate the kids and still have something for retirement. Wow, I rambled on here and I hope it gives you an idea what it is like to be old and alone (kids have their own lives) in NJ. I am among the more fortunate seniors and I know it.
PS. I would never change a thing if I had it to do over. Life is what you put into it and I gave it my all. I have a wonderful life and thank the Gods for it. Just wish it didn't cost so much to enjoy each day. LOL Thanks for listening to my story. Have a wonderful day and hug your kids and your animals. Hugs to you all from this old lady. JB
As a Boomer I have a different viewpoint than JBerger. Not better, just different. We are urban homeowners in one of the most expensive areas of the country, the San Francisco Bay Area. It takes close to a six-figure income here to be middle-class and a homeowner.
We made the decision not to have kids. On one hand, we could retire early on DH's pension, earned by 42 yrs with the same company (I'm in awe, the longest I ever lasted with a company was 13 yrs and that was unusual!). OTOH, we spend the money for two long-term care insurance policies to avoid burdening the family members here. There aren't many in the next generation, and they have all they can do to manage their own lives while saving as much as possible for their retirements some 30 yrs in the future.
We didn't save as much as we could have, but I managed to grow it to a decent sum which, along with our home, is our 'backup money'. I enjoy investing and reading about financial matters, so we often took considerable equity risk when younger. At this point the portfolio is invested very conservatively, but we will probably move it to a professional CFP firm in 2013. I don't mind a moderate amount of risk, but the funds offered by the pension managers aren't that good for the current macro-investing climate, being much on the conservative side with no alternative investments.
Although we don't quite meet the minimum for the CFP firm, they handle my MIL's portfolio, which is a little bigger than ours (she sold her house and moved in with us). I've been pleased with their performance over the last four years and am tired of handling the investment side after thirty years. They'll combine the two portfolios for fee purposes so we'll each get a little break (very little, but every bit helps) on the total cost.
Growth in assets is the only way to offset inflation. The trouble with growth in RE assets is that it isn't always as liquid as one might need, especially in cases of death or emergency. Those with substantial RE assets should always look at their estate planning carefully, especially with the adjustments to the estate taxes coming up in the looming federal budget discussions, to make sure that other assets provide sufficient liquidity if a quick property sale needs to be avoided. There is a good reason why there are always properties on the market, both urban and rural, with the words "Estate Sale" in the description!
We, too, tried being a residential landlord and loathed the experience. Here in the city it was far more trouble than it was worth. We practiced for retirement by living on 20% less net pay than we made for the last two years of employment, adding it to our savings. We actually ended up with a slightly larger pension amount than we had been living on, which was a nice bonus.
Also, my retirement savings were much smaller than my spouse's, so I'm liquidating my modest savings in small annual withdrawals of equal amounts. It's taxable, so I don't want to take the whole amount at once. They will take me up to age 65, when I begin to receive three small pensions. I'm going to try to wait to claim SocSec until full age 66.
DH is two years younger, but his SocSec is reduced under the WEP law to only 40% of the amount he normally would receive, due to his state pension. We figure it will pay for his Medicare premium Part B, if nothing else. We belong to an HMO, which owns not only its own hospitals but its own pharmacies. The break on drug costs is considerable; we pay $5 for anything under $15 retail, and $10 for any drug, no matter how costly, over $15 retail.
I believe in good financial planning. In these days of complex financial situations, I think it's imperative that everyone, but ESPECIALLY women, who tend to outlive their spouses, understand not just budgeting and saving, but also investing and planning, which are very different things.
We started doing financial planning in our mid-40's, thanks to free classes given by the state pension fund. They were extremely helpful in understanding the complex planning needed for retirement. Certain classes we took several times, to keep updated on the federal laws and state contracts. Our planning became serious the last five years before retirement: we did budgets, projections, and lots of "what could go wrong?" scenario discussions. We felt 95% prepared for retirement, and have been enjoying our time together for the last three years.
Friends and family are mostly still working. The Boomers among them who are older than us actually made more money, saved more, but didn't plan well, if at all. They finally understand at last that planning - not investing, nor saving, nor budgeting - makes the difference...but it's too late for them. They're at the end of their careers and trying to hang on, with limited options for the future. We can only hope the younger generation learns from those mistakes and does better.
May all of us enjoy a safe and healthy holiday season for this year, and many more besides.
This message was edited Nov 17, 2012 12:30 PM