Home Education This is why inflation may be less costly for some retirees

This is why inflation may be less costly for some retirees

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This is why inflation may be less costly for some retirees

Buyer at a grocery store in San Francisco on May 2, 2022.

David Paul Morris Bloomberg | Getty Images

Inflation is a growing concern for Americans spend hundreds more every month. But some retirees can avoid rising prices for gasoline, groceries and other expenses.

In April, annual inflation rose by 8.3%.hovers around a 40-year high, according to the U.S. Department of Labor.

More than half of Americans expect rising costs “Big negative impact” on long-term financial goalsfor example, retire in comfort.

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But changes in spending over the golden years of people could reduce the impact of some rising spending, according to JP Morgan’s Retirement Guide 2022.

“It’s getting below the headline,” said Catherine Roy, JP Morgan’s chief pension strategist, explaining how the basket of goods that retirees buy can change over time.

Although gasoline prices have jumped another record this weekElderly families tend to spend less on transportation than families between the ages of 35 and 44, making them less vulnerable, the report said.

And some retirees may be able to buy less gasoline by combining trips or joint trips, said certified financial planner Catherine Valegha, a Green Bee Advisory welfare consultant in Greater Boston.

“I don’t think we need to panic,” Valega added, explaining how a change in prices could be an opportunity to revise budgets and long-term plans.

While JP Morgan is proposing to use a separate line to increase healthcare spending with a 6% growth rate, other spending categories could increase by only 1.5-2% annually, Roy said.

If you give up health care, retirees tend to spend less in real terms under the age of 80 on other categories, she said.

These findings coincide with Fr. SmartAsset analysis shows a reduction in retirement spending in 11 of the 14 major categories found in the U.S. Bureau of Statistics’ Consumer Expenditure Survey.

While rising health care costs are a concern, this is not enough to offset retirees ’spending on housing, food and transportation, said CFP Anthony Watson, founder and president of Thrive Retirement Specialists in Dearborn, Michigan.

“For most people, these other costs go down over time,” he said.

For most people, these other costs decrease over time.

Anthony Watson

Founder and President of Thrive Retirement Specialists

Of course, spending growth can now be most difficult for low-income households, which tend to experience higher inflation, believes working document from the National Bureau of Economic Research.

However, it is important for retirees to have a long-term perspective when it comes to inflation, according to a report by JP Morgan.

“It’s just a moment of time, and the average is important,” Watson said.

“Yes, we are experiencing high inflation now,” Roy added. “But we’ve been out of a historically low period for a very long time.”

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