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Retire Wise | April 2022

Retire Wise | April 2022

April 14, 2022
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6 Things That Are Making Retirement More Expensive and What You Can Do About It

As inflation trends at the highest levels seen in more than 40 years,1 it’s wreaking havoc on the budgets and spending power of consumers in the United States and across the globe. Inflation refers to the decrease in the purchasing power of money, which is reflected in an increase in the prices of goods and services. The resulting squeeze on consumers’ wallets is often felt more acutely by retirees drawing down on retirement savings or living on fixed incomes. The good news is that inflation is cyclical, meaning that it’s not likely to be permanent. While that may offer little comfort for those struggling to make ends meet in the current environment, there are ways to help ease the pain in six areas that are making retirement more expensive today.

  1. Groceries are expected to rise another 3% to 4% this year,2 making it even more important to find ways to cut costs. Clipping coupons, buying generic brands, and shopping BOGO deals and promotions can help reduce your weekly grocery bill. To save even more, look for stores near you that offer senior discount days and similar promotions.

  2. Gas prices have spiked significantly. Consider using apps that track gas prices where you live and travel. Try to bunch errands and appointments whenever possible.

  3. Utility costs for natural gas, oil, propane, water and electricity are rising across the country. Visit your local utility services’ websites for tips on reducing household consumption and home improvements that can help lower utility costs.

  4. Healthcare expenses, including Medicare premiums, continue to rise. Take the time to compare plan costs and benefits during Medicare’s annual open enrollment periods to ensure you’re getting the coverage you need at the best possible price. Learn more at Medicare.gov.

  5. Housing prices rose 14.6% in 2021.3 That’s good for sellers, but can be costly for buyers, even those seeking to downsize. While rising mortgage rates may help temper home prices in the months ahead, cash buyers or those willing to rent for a period of time until home prices stabilize, may fare better.

  6. Travel costs continue to rise with increased demand, as pandemic-related restrictions are lifted. When it comes to making travel arrangements, the more flexible you are, the more you stand to save. Consumers can save hundreds by booking last minute deals for airfare, cruises, hotels, car rentals and more. Traveling off-season or visiting less popular destinations can also translate to significant savings, along with fewer crowds.

If you have questions about managing income in retirement, let’s schedule time to talk.

1 https://tradingeconomics.com/united-states/inflation-cpi
2 https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings/
3 https://www.kiplinger.com/real-estate/buying-a-home/604280/home-sale-prices-in-the-50-largest-metro-areas

5 Ways to Save More at the Pump Now

Gas prices have hit record highs in recent weeks. According to the American Automotive Association (AAA), the national average for a gallon of gas during the first week of April was $4.153 a gallon, up from $2.872 a year ago.1 That can put a real dent in your budget, whether you’re working or retired. Fortunately, there are steps you can take to help reduce pain at the pump.

  1. Track prices - Mobile apps from Gas Buddy, Gas Guru and AAA can help identify the cheapest gas prices near you, whether you’re at home or traveling. Most apps are available for Android and iOS devices and track gas prices across the country.

  2. Shop and save - A growing number of grocery stores and wholesale clubs offer discounts on gas through member and/or rewards programs. These include Costco, BJs, Winn Dixie, Kroger, Harris Teeter, Safeway and more.

  3. Keep up with regular maintenance - Regular oil changes, clean fuel filters and properly inflated tires all contribute to greater vehicle fuel efficiency, which means more miles per gallon. There are other steps you can take as well to reduce gas consumption, including maintaining the speed limit when driving and running your car’s air conditioning less.

  4. Consider credit card rewards - Many credit card providers offer rewards programs that can help you save on gas. Cards issued by gas companies may provide immediate savings at the pump or allow you to accumulate rewards each time you fill up. Savings realized from credit card programs that offer travel, dining, cash-back or similar rewards can help offset higher gas prices by helping you save money in other areas.

  5. Buy the right fuel - According to AAA, people needlessly pay hundreds more each year for higher grade fuel. If your vehicle manufacturer recommends regular gasoline, AAA says there’s no need to pay more for premium. Recent testing found no increase in power or fuel economy, and no reduction in exhaust emissions, when premium gasoline was used in cars designed for regular. The bottom line? Unless your cars’ manufacturer says premium gasoline is "required," regular grade will not only do the job but could save you thousands over the life of the vehicle.2

1https://gasprices.aaa.com/
2https://www.aaa.com/autorepair/articles/don't-confuse-gasoline-octane-and-quality

This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.