Financial Tips for Seniors Impacted by Inflation

How to Feel More Financially Secure When Prices Are on the Rise

Inflation is all but an inevitability over time, but inflation surges can have a significant impact on older Americans who are no longer working. Everyday essentials, from groceries to gas to going to the doctor, may become more expensive, while your retirement income withdrawals or pension payments likely remain the same.

At the same time, seniors who invest may see a significant hit to their portfolios, even if they are conservative investors. Because conservative portfolios often have lower rates of return, seniors may feel the pinch of inflation even more since they have less cash to spend on goods and services that are rising in price.

If you’d like to feel more financially secure in the face of inflation, you may consider employing these financial tips for seniors.

1.    Consider Delaying Your Social Security Claim

Social Security benefits increase each year you can delay claiming them. Say your full retirement age is 66—if you start claiming then, you’ll receive 100% of your monthly benefits. However, if you delay just four years until you’re 70, you will get a whopping 132% of your monthly benefits. Of course, that means you likely would have to work longer, but it may ultimately be worth it.

2.    Reassess Your Budget

Taking the time to review your budget periodically may be smart, but we see it is particularly critical for seniors in the midst of rising inflation. When sticker shock is a reality everywhere you look, we believe you really only have two budgeting options: earn more or spend less. Earning more can be tricky during retirement, but spending less is a very viable strategy, especially if you get creative.

One of the best ways to approach tightening your budgeting belt: think about expenses as need vs. want. Certain things are necessary to be able to simply live: rent or mortgage, prescriptions, transportation, and more. However, other expenses are likely things you enjoy but don’t necessarily require. Look closely at your spending on things like:

  • Coffee: It seems like such a small thing, but cutting down can make a big difference! Buying a $3 cup of coffee each morning can put you at almost $100 a month, which adds up to $1,200 a year.
  • Subscriptions: A free trial can quickly turn into an auto-renew subscription if you aren’t careful. Keep a close eye on these to make sure you’re using them.
  • Takeout vs. Cooking: Cooking at home almost always costs less than going out to dinner or ordering takeout. Before you put in a call to your favorite restaurant, think about ways you could get creative with food you already have.

3.    Live Long and Prosper

We’ve all heard the phrase “life is short,” and in many ways, that’s right! Time can pass by very quickly. But the truth is that the average life expectancy rate for women is 81 and it’s 77 for men, according to the National Center for Health Statistics. Instead of thinking about how little time we could have here, plan to live for a long time—that way you may never outlive your savings. Be conservative when planning your investments and your retirement income withdrawals, and plan to live well for many years to come.

4.    Stock Up on Low Risk

When it comes to stocks, it can be tempting to invest in the latest and greatest options and hope to get lucky. However, what passed as a justifiable risk when you were in your earning years may harm your nest egg in retirement. Consider the importance of diversification and not taking on more risk than necessary to achieve your goals. You might also consider whether you have enough cash on hand in case of an unforeseen expense.

5.    Shop Sensibly

We all need to eat, but there are simple ways you can get what you need at the grocery store without racking up a hearty bill. Consider carpooling with friends or neighbors to help save on gas. Switch to generic brands instead of name brands and think about buying in bulk to save more over time.

Make a list before you get to the store to curb impulse buying and always keep an eye out for good sale prices. When you cook, think about making extra so you can freeze the leftovers. Not only can that help you save money upfront, but it can also help you save time and energy in the future.

6.    Call in Backup

Your financial advisor is an excellent resource in times of financial transition, including when inflation is causing you to rethink your retirement income planning. A professional can help you evaluate your best options and move forward with greater financial security and peace of mind.

Final Thoughts on Financial Tips for Seniors

Inflation can cause many seniors to feel anxious, even those with well-planned retirement income strategies. If you’d like to discuss your concerns or get a professional assessment of your financial plan, contact us today. At Paces Ferry, our goal is to help each client gain greater financial security through comprehensive financial services and a personalized approach. We look forward to hearing from you!

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).  This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.


Zachary Morris

Zachary Morris, CFP®

Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.