Inflation Robs Us All

[Michael G.]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

[JSR22]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

Really haven't changed anything. The big cost saver for us we do not travel any more.
I don't like to cook any more so we are still eating out frequently.

[Stu from NYC]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

We have been eating out more often but not traveling so saving lots on driving and travel.

[retiredguy123]

The people hurt most by inflation and low interest rates are those with substantial savings and invested assets. Not only is your purchasing power affected, but your entire portfolio loses value. At least in the 1970's and 1980's, you got a decent return on fixed income investments, like money market accounts and CDs. I hope that interest rates will soon increase to correct this situation. Currently, savers are being severely punished.

[Michael G.]

Currently, savers are being severely punished.

Anyone check out the interest in I-bonds?
Interest is paid by inflation rates and is now at 7.12%.

[retiredguy123]

Anyone check out the interest in I-bonds?
Interest is paid by inflation rates and is now at 7.12%.
The problem is that you can only invest $10K per year in I-Bonds.

If you have a $100K treasury bond earning 2 percent and the inflation rate is 8 percent, you are losing $6K per year without spending any money eating out or travelling.

[Babubhat]

Qyld. Pays 1 percent a month. Writes covered calls on Microsoft, Apple etc. even if you lost 10 percent on principle you still earned 2 percent for the year

[Spectreron]

OP asked "what's your plan?"
I plan to vote!

[retiredguy123]

Qyld. Pays 1 percent a month. Writes covered calls on Microsoft, Apple etc. even if you lost 10 percent on principle you still earned 2 percent for the year
40 percent of my portfolio is in stocks, 60 percent in bonds and cash. Are you suggesting that retirees should put all of their retirement funds in stocks to keep up with inflation?

[Babubhat]

A absurd inference. It’s part of a portfolio, bonds are a loser going forward. Anything that lets you sleep at night works

[retiredguy123]

A absurd inference. It’s part of a portfolio, bonds are a loser going forward. Anything that lets you sleep at night works
I agree that bonds are a loser without higher interest rates. But, I wouldn't feel comfortable with a higher percentage in stocks. That is the point. Where do you put the non-stock portion of your portfolio to minimize the impact of inflation? Inflation is the topic of this thread.

[Babubhat]

It’s a yield alternative greater than rate of inflation with principle appreciation if the market goes up. The call premium reduces risk in the event of a decline. You have to decide the portion. There are other etf like it. Doesn’t have a lot of volatility. I see it as a bond substitute with better upside

[Keefelane66]

Still plenty of disposable income we’ll be fine. Yes, we’ve experienced increase in prices, not catastrophic to our living standards.

[tophcfa]

The people hurt most by inflation and low interest rates are those with substantial savings and invested assets. Not only is your purchasing power affected, but your entire portfolio loses value. At least in the 1970's and 1980's, you got a decent return on fixed income investments, like money market accounts and CDs. I hope that interest rates will soon increase to correct this situation. Currently, savers are being severely punished.

Very well said

[DAVES]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

You cannot fight inflation any more than you can fight gravity. Seniors on a fixed income. That is true of most of us. We all received a raise in social security some with pensions will receive or may received a cost of living increase.

REALITY, the CPI consumer price index is now roughly 10%. You pay that with after tax money. To be even, I need to make roughly 15% on investments. I've done pretty well for the year it is less than half what I need to be EVEN.

Most posts are complaints. We do not drive anywhere near what I used to do when I was working. We do have a mortgage and I could pay it off but the rate is below current market and I am still getting more on borrowed money than my cost to borrow it.

Imagine a family of four. living pay check to pay check. Driving to work on gasoline now over $4.00 a gallon with a mortgage. The average American has, I read somewhere $10,000 in savings.

Lucky? It seems good luck come to those who WORK HARD and SAVE HARD.

We've been told to eat lentils. Background they are the beans highest in protein. Hum, we just went on our grocery run. A pound of lentils was a dollar. It is now a dollar and eighty-nine cents. I make a great lentil soup. Sadly true. There is or used to be a website with recipes from the 1930 depression.

[billethkid]

Remembering when bread cost a dime....
Movies were 10-20 cents....
Gas 10 to 99 cents....
etc....
Having survived to 2022.....
No problem!

[DAVES]

40 percent of my portfolio is in stocks, 60 percent in bonds and cash. Are you suggesting that retirees should put all of their retirement funds in stocks to keep up with inflation?

There is no shortage of not only different OPINIONS but people in different financial situations. Our current situation the CPI consumer price index is now running roughly 10%. We all pay that after taxes.
To be even I need to make roughly 13% on my savings. This year I've done less than half of that. Bonds and cash surely will not yield 13%. Any interest on bonds or cash is taxed at your highest tax rate. Average age in the villages is 70. Assuming some, many people have an IRA, 403B or whatever other codes there are will be forced to take required minimum distributions at 71. That is taxed at your highest tax rate. It is the wrong place to hold dividend paying stocks. As in a taxable account dividends are taxed at a lower rate than your highest tax rate.

The old thought 60% stock 40% bonds or the other way around 60% bonds 40 % stocks were valid in the OLD DAYS. Treasuries now are paying like 2% inflation is now 10%. Long history Treasuries would pay the rate of inflation plus 2% so people would build a bond ladder and be even. Far from what it is today.

[rustyp]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

Since you are flooding the airways with "just curious" subjects please post them where they belong - The Villages, Florida. non villages discussion.

[Stu from NYC]

Since you are flooding the airways with "just curious" subjects please post them where they belong - The Villages, Florida. non villages discussion.

What is the difference all of these posts are found in this one section anyway?

[Stu from NYC]

Because interest rates are so low I have been putting an increasing percentage of our portfolio in what I call defensive mutual funds.

Most of this is in value and dividend growth funds that are conservative in nature but have done rather well over the past 10 years.

[tophcfa]

Remember the days when our country and its residents weren’t hopelessly dependent on unsustainable debt levels. Back then the Federal Reserve would use it’s available tools to guide interest rates to a level where responsible savers could earn a real rate of return owning US Treasury notes and bonds. A real rate of return was a yield above and beyond inflation. Both our country and its residents were typically fiscally responsible. Spending was limited to what could be afforded without taking on crazy levels of debt.

It makes me shake my head when I hear the Federal Reserve is now becoming hawkish on inflation. Since inflation has begun to run out of control, they have raised the Fed Funds rate by a minuscule 25 basis points, or one quarter of 1%. If the Fed really wanted to make a bold statement, and demonstrate seriousness about containing inflation, several rate increases of 1 - 2% each are necessary, but it can’t happen because it would effectively bankrupt both our country and many debt laden citizens. Last time inflation was this bad was in 1981. Paul Volcker was the chairman of the Fed back then and short term interest rates were jacked up to 20%, which quickly nipped inflation in the bud. We desperately need someone like Volcker overseeing our country’s monetary and fiscal policies now.

[Stu from NYC]

Remember the days when our country and its residents weren’t hopelessly dependent on unsustainable debt levels. Back then the Federal Reserve would use it’s available tools to guide interest rates to a level where responsible savers could earn a real rate of return owning US Treasury notes and bonds. A real rate of return was a yield above and beyond inflation. Both our country and its residents were typically fiscally responsible. Spending was limited to what could be afforded without taking on crazy levels of debt.

It makes me shake my head when I hear the Federal Reserve is now becoming hawkish on inflation. Since inflation has begun to run out of control, they have raised the Fed Funds rate by a minuscule 25 basis points, or one quarter of 1%. If the Fed really wanted to make a bold statement, and demonstrate seriousness about containing inflation, several rate increases of 1 - 2% each are necessary, but it can’t happen because it would effectively bankrupt both our country and many debt laden citizens. Last time inflation was this bad was in 1981. Paul Volcker was the chairman of the Fed back then and short term interest rates were jacked up to 20%, which quickly nipped inflation in the bud. We desperately need someone like Volcker overseeing our country’s monetary and fiscal policies now.

They are planning on numerous increases of 0.25% thru the rest of the year. Do believe they should increase rates faster.

I would say more but do not want to get into trouble.

[asianthree]

No changes with any of our lifestyle. But I have a good financial guy, and plan for whatever

[Keefelane66]

Since you are flooding the airways with "just curious" subjects please post them where they belong - The Villages, Florida. non villages discussion.
And I still don’t think is computer is fixed

[Topspinmo]

Remembering when bread cost a dime....
Movies were 10-20 cents....
Gas 10 to 99 cents....
etc....
Having survived to 2022.....
No problem!

Yet:duck:

[Topspinmo]

Remembering when bread cost a dime....
Movies were 10-20 cents....
Gas 10 to 99 cents....
etc....
Having survived to 2022.....
No problem!


Remember when made 5 dollars day. Remember when minimum was $1.15 hour. I don’t want to remember. :ohdear:

[GOLFER54]

I travel less, I cook at home, I play Lotto

[nsantelli]

Anyone check out the interest in I-bonds?
Interest is paid by inflation rates and is now at 7.12%.

Yes. The base rate for I-bonds purchased this year is 0, but the current overall rate is 7.12%, which is reset every 6 months. You can purchase up to $5,000 per tax return per year using your tax refund and up to $10,000 per year per person via Treasury Direct. Plan to keep them at least 1 year and preferably 5 years or interest penalties apply (although after the first year it's not bad). We will be maxing out our I-bond purchases this year.

[La lamy]

I've always been quite frugal, so not much change for me, except eating more peanuts and less nuts.

[nsantelli]

1. Keep working. We had planned for full retirement in January of 2021 using a projected rate of inflation double the rate of the previous 4 years. We figured that would give us a good cushion, After digesting the results of the 2020 election my wife is still working full time and since I retired a few years ago, I am taking on all the things that we would normally pay someone else to do. House cleaning, plumbing, yard work, painting, etc.

2. Voting for those who will move the country to not only to full energy independence, but becoming the world's top exporter of natural gas.

FYI-the more USA natural gas we export to China and India, the less green house gases will be produced. Why - more electricity will be produced using gas instead of coal. Compared with coal, gas puts 1/2 the amount of CO2 into the atmosphere per KW hour produced.

[newgirl]

Average adult has less then $400 saved today.

[cj1040]

We are in that category with huge capital gains in 2021 and then a dive in early 2022. We have a large estate but still don't like to see losses. We have never eaten out much except for during travel....too much food, slow service and not usually worth the cost and often not as good or healthy as our own cooking. We shop carefully for best deals on flights, hotels and cruises etc and will take several trips this year. We have always shopped carefully for food, watching expiration dates etc and we eat our left overs. We throw very little food away and keep snack food to a minimum. We try to combine errands to save gas and we bought a lithium golf cart. We took social security at 67 for 1 person and the second younger person filed under that as well allowing their account to grow a few more years for higher payments. Don't think that is allowed anymore though.

[dewilson58]

Inflation is rough on retired seniors on fix income everywhere.


Everyone (except the top .1%) is on a fixed income.
:ohdear:

[barbnick]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

Travel abroad has been curtailed. We plan to visit national sites and stay closer to home for a while

[merrymini]

Actually, if you ate less red meat and more beans, you would be richer and healthier. The Roman army conquered the world and did not eat meat, it was too expensive.

[Ptmckiou]

Nothing has changed for us. By the end of this year the supply, demand, and labor shortages is suppose to finally balance out. We didn’t get here overnight with issues Covid caused, and it takes time to get it all working again. I’m fine and cooking most meals at home….like I always have.

[spktrue14]

It’s rough on everyone - even single people and families who are trying to live in today’s society. Let’s try thinking of others in this time of need - especially those who are less fortunate. At least you can still go out to eat and you don’t have to struggle and find where your next meal is coming from. I don’t know - let’s try and think of others. Just my opinion.

[Michael G.]

I’m fine and cooking most meals at home….like I always have.

Good for you.
Wife and I average one meal out once a month, like most villagers.....:1rotfl:

[toeser]

No change in anything we do, just burning through our money faster.

[MandoMan]

Anyone check out the interest in I-bonds?
Interest is paid by inflation rates and is now at 7.12%.

Doesn’t that mean that this year you just stay even?

[MandoMan]

40 percent of my portfolio is in stocks, 60 percent in bonds and cash. Are you suggesting that retirees should put all of their retirement funds in stocks to keep up with inflation?

Yes.

[charlieo1126@gmail.com]

We are in that category with huge capital gains in 2021 and then a dive in early 2022. We have a large estate but still don't like to see losses. We have never eaten out much except for during travel....too much food, slow service and not usually worth the cost and often not as good or healthy as our own cooking. We shop carefully for best deals on flights, hotels and cruises etc and will take several trips this year. We have always shopped carefully for food, watching expiration dates etc and we eat our left overs. We throw very little food away and keep snack food to a minimum. We try to combine errands to save gas and we bought a lithium golf cart. We took social security at 67 for 1 person and the second younger person filed under that as well allowing their account to grow a few more years for higher payments. Don't think that is allowed anymore though.and those you leave it to will thank you for being frugal !!!

[Petersweeney]

Actually, if you ate less red meat and more beans, you would be richer and healthier. The Roman army conquered the world and did not eat meat, it was too expensive.

They ate plenty of stolen meat sacking and plundering

[MandoMan]

Remember the days when our country and its residents weren’t hopelessly dependent on unsustainable debt levels. Back then the Federal Reserve would use it’s available tools to guide interest rates to a level where responsible savers could earn a real rate of return owning US Treasury notes and bonds. A real rate of return was a yield above and beyond inflation. Both our country and its residents were typically fiscally responsible. Spending was limited to what could be afforded without taking on crazy levels of debt.

It makes me shake my head when I hear the Federal Reserve is now becoming hawkish on inflation. Since inflation has begun to run out of control, they have raised the Fed Funds rate by a minuscule 25 basis points, or one quarter of 1%. If the Fed really wanted to make a bold statement, and demonstrate seriousness about containing inflation, several rate increases of 1 - 2% each are necessary, but it can’t happen because it would effectively bankrupt both our country and many debt laden citizens. Last time inflation was this bad was in 1981. Paul Volcker was the chairman of the Fed back then and short term interest rates were jacked up to 20%, which quickly nipped inflation in the bud. We desperately need someone like Volcker overseeing our country’s monetary and fiscal policies now.

I remember those days. I had cousins building a huge house in Oregon at the time, using a building loan, and they had to get a mortgage when the home was finished at a punishing 20% interest. There was no way I could have bought a house at that rate. What would happen to home sales—and thus home values—in The Villages if we had 20% interest? The only reason I can afford to live here is that I put my retirement money entirely in stock mutual funds, and between 2016 and 2022 the worth has doubled. (Unfortunately, the war is hurting me a lot.)

I had a girlfriend who was a hotshot in investment banking, and the word “on the street” (Wall Street) was that regardless of who won at the polls, Covid and the money we would need to spend to help millions of people stay afloat, along with the losses to many businesses and employees from loss of customers (think airlines, oil companies, construction, restaurants, hotels) would INEVITABLY lead to serious inflation. There was no way around it. If you pay restaurant and warehouse employees a fairer wage—and we should—of course our food is going to cost more in restaurants and stores. If there are transportation bottlenecks, and those were also inevitable, that also increases costs. If people go on buying sprees for things that are hard to find, that causes inflation. That’s just how it works! Meanwhile, desperate restaurants and hotels and airlines that lost a huge amount when they had almost no customers are raising prices to unusually high levels, even unprecedented levels, to try to make up for what they have lost and avoid being forced into bankruptcy.

[zendog3]

I know enough basic macro economics to know my limitations and that there is no free lunch. During the pandemic, government saved the economy by giving money, and reducing payments to folks and businesses that would have otherwise gone under. Frankly, they did a great job of saving the nation from the worst, but there had to be a downside and we are looking it in the teeth now. Considering the magnitude of the problem, they are doing a fair job of managing the problem.

Barring total collapse, we have enough saved to survive until our death, so we haven't changed much. We have been relatively frugal and plan to continue as such.

If I were much younger, this would be my strategy: Spend my accumulated savings to buy something at 2022 dollars that will earn a little until the inflation is under control and then sell it at 2030 dollars. A good option now would be to buy a Villages villa now, rent it out, and sell it in 2030.

There is always risk of gain or loss, but the alternative is certain loss.

[OrangeBlossomBaby]

I remember when minimum wage was $6.55/hour, and gas prices were $4.11/gallon. I was working in an office earning $13.72/hour, which was decent, for an entry-level generic non-management office job. What was even better, was they paid 100% of our health care premiums on a VERY good health care plan with low co-pays, no deductible, and Rx, dental, and eyeglass coverage, we got 3 weeks paid vacation every year, plus 20 sick days per year, plus 3 personal days per year, and we could take our birthday off with pay. If we didn't take all 20 sick days, the balance would carry over for another year, allowing us up to 40 sick days in any given year if needed.

You don't see any of that anymore. They boast about $10 minimum wage here but good luck finding a job that gives you a break during the day, let alone sick time, vacation pay, or paid premiums on health care plans.

Meanwhile on our fixed income, we're managing. We're not thriving, but we weren't thriving before either. In another year I'll start getting social security checks, and that's when I trade in my old 2010 tin can for a newer used car. Maybe I'll get my old car tricked out, heh - it doesn't even have 100k miles on it so maybe I'll go that route instead. Fix the rust marks, give it a nice spray job, add a new stereo system with 6-CD changer, and maybe some soundproofing panels and some way to reduce the road noise.

[davem4616]

I'll respond to the OP's question of what are we doing differently....

We do a better job 'planning' our errands before we jump in the car...this saves a little gas.

We tend to order a few more things online and get free shipping...that saves on gas and usually the price is similar

We canceled a number of trips due to Covid-19, back in 2020, not because of inflation. I have one trip planned this year (in the states, by car, visiting family and attending a school reunion)

Actually Covid-19 more than inflation was the catalyst for us cutting back on spending. We had easily been dropping 30K+ a year on travel.

Since Covid-19 hit we have only traveled once, and that was in the states, by car to visit family

When Covid-19 hit, I began looking at how we might conserve on spending:
- I changed from using credit cards that offered points to cards that offered cash back. I use an Amex card that gives me 6% back at Publix...and a different card that gives me 2% back on everything else. It adds up, as I run just about all our regular expenses through the 2% card and pay the balance off each month on both
- I cancelled a few 'extra' credit cards that we had that we weren't using that had an annual fee

- brought the cell phone bill down...we were paying for more than we were using

- I shopped around for home and auto insurance (apples to apples, & lowered the bill by $300 over what it would have been this year)

- I pay attention to what Publix has on sale and plan the meals around that as much as possible

- I shop at BJ's every other month for those things that I like to buy in bulk, and clip their coupons

- I buy the 'gas cards' from Publix when they offer them

- we don't eat out much...we might eat lunch at a restaurant occasionally... I enjoy cooking

- I am more selective on what we go to see at The Sharon, and The Savannah Center....we used to be at one or the other every week

We shifted the portfolio a little to have more high yield dividend stocks, thinking 4% would be a good hedge against inflation....well, we all know how that's turning out.

[joelfmi]

The people hurt most by inflation and low interest rates are those with substantial savings and invested assets. Not only is your purchasing power affected, but your entire portfolio loses value. At least in the 1970's and 1980's, you got a decent return on fixed income investments, like money market accounts and CDs. I hope that interest rates will soon increase to correct this situation. Currently, savers are being severely punished. Treasury bonds have gone up for 1 year 1.73 % you have to do your home work to find decent interest rates CD's are not very good now

[bp243]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

On a positive note, have you checked the value of your house? At least in The Villages inflation has proven to work in our favor. Hope that's true for you.

[Stu from NYC]

On a positive note, have you checked the value of your house? At least in The Villages inflation has proven to work in our favor. Hope that's true for you.

Our house does have much more value but since we have no plans to move doesnt do us much good but our kids that would be another story.

[montagnard1969]

I detest the term "seniors on a fixed income". Ask anyone who works for a living if they are on a fixed income or not? Do you think the employee can walk into their employers office and demand a raise to keep up with inflation? Don't think so. Do retirees receive cost of living adjustments to their SSA and pensions? Some do without having to go to their providers and request them.
Yes, inflation affects us all but don't think those working for a living have a choice to increase their wages upon demand to keep up with inflation.
It seems like no one wants to back off on their spending. Industry needs to drive the economy, not the consumer. Bring back overseas jobs so the supply chain is not disrupted again. Reinstate construction of pipelines for oil and natural gas transmission. Close the southern boarder and relieve the taxpayer from paying for all the benefits invaders take advantage of by walking across the southern boarders, which many taxpayers cannot afford on their pay. Quit printing money and giving away money and our next generation's future in this process. If you make a commitment to repay a loan, then repay it. Don't expect "forgiveness" and duck you responsibility to pay. If everyone could do this how would the banks survive? Without banking the economy would collapse. The system isn't perfect, but it must operate efficiently to work. What we have in place is not working efficiently and is detrimental to everyone, not just retirees.

[rustyp]

On a positive note, have you checked the value of your house? At least in The Villages inflation has proven to work in our favor. Hope that's true for you.

How is this a positive ? Unless it was investment property and you are selling and not buying another house (because that one has increased by the same percentage) what your feeling is no more than emotion. In fact that increase will cost you money - example homeowners insurance will go up based upon replacement cost.

[Nucky]

I remember when minimum wage was $6.55/hour, and gas prices were $4.11/gallon. I was working in an office earning $13.72/hour, which was decent, for an entry-level generic non-management office job. What was even better, was they paid 100% of our health care premiums on a VERY good health care plan with low co-pays, no deductible, and Rx, dental, and eyeglass coverage, we got 3 weeks paid vacation every year, plus 20 sick days per year, plus 3 personal days per year, and we could take our birthday off with pay. If we didn't take all 20 sick days, the balance would carry over for another year, allowing us up to 40 sick days in any given year if needed.



You don't see any of that anymore. They boast about $10 minimum wage here but good luck finding a job that gives you a break during the day, let alone sick time, vacation pay, or paid premiums on health care plans.

Meanwhile on our fixed income, we're managing. We're not thriving, but we weren't thriving before either. In another year I'll start getting social security checks, and that's when I trade in my old 2010 tin can for a newer used car. Maybe I'll get my old car tricked out, heh - it doesn't even have 100k miles on it so maybe I'll go that route instead. Fix the rust marks, give it a nice spray job, add a new stereo system with 6-CD changer, and maybe some soundproofing panels and some way to reduce the road noise.

OBB, add your anticipated Social Security Income to your husband's income then go to Healtcare.Gov (Obamacare) and check out your exact coverage today against what it will be with your new S.S. income. Get prepared to trick out what you've got. Sorry to be the bad news guy but this just happened to my best friend in Jorsey. Sad.

Inflation, whatever, we are alive and kicking. I'm good with whatever comes at us. :1rotfl: I may be shocked sometimes but what are you gonna do? NOTHING! I did some shopping the other day at Publix and was shocked beyond shocked at some of the prices.

[Pgcacace]

The problem is that you can only invest $10K per year in I-Bonds.

If you have a $100K treasury bond earning 2 percent and the inflation rate is 8 percent, you are losing $6K per year without spending any money eating out or travelling.
If you haven’t earned money in your investments, you haven’t lost it. Having a fixed income today is affected by inflation. Fortunately I was living below my means, so inflation is not affecting my lifestyle.

[retiredguy123]

If you haven’t earned money in your investments, you haven’t lost it. Having a fixed income today is affected by inflation. Fortunately I was living below my means, so inflation is not affecting my lifestyle.
I was referring to losing $6K per year in purchasing power, based on the higher prices due to inflation. So, if you invested $100K at 2 percent, you would have $102K in a year. But, if you were going to buy two cars for $100K and the price is now $108K, you can no longer afford them. That is what happens when the interest rate is lower than the inflation rate.

In my opinion, saving money should be rewarded, not punished.

[B-flat]

OP asked "what's your plan?"
I plan to vote!

Great answer!

[Stu from NYC]

Inflation, whatever, we are alive and kicking. I'm good with whatever comes at us. :1rotfl: I may be shocked sometimes but what are you gonna do? NOTHING! I did some shopping the other day at Publix and was shocked beyond shocked at some of the prices.

That is why I only buy stuff at Publix that we cannot get elsewhere

[Stu from NYC]

I detest the term "seniors on a fixed income". Ask anyone who works for a living if they are on a fixed income or not? Do you think the employee can walk into their employers office and demand a raise to keep up with inflation? Don't think so. Do retirees receive cost of living adjustments to their SSA and pensions? Some do without having to go to their providers and request them.
Yes, inflation affects us all but don't think those working for a living have a choice to increase their wages upon demand to keep up with inflation.
It seems like no one wants to back off on their spending. Industry needs to drive the economy, not the consumer. Bring back overseas jobs so the supply chain is not disrupted again. Reinstate construction of pipelines for oil and natural gas transmission. Close the southern boarder and relieve the taxpayer from paying for all the benefits invaders take advantage of by walking across the southern boarders, which many taxpayers cannot afford on their pay. Quit printing money and giving away money and our next generation's future in this process. If you make a commitment to repay a loan, then repay it. Don't expect "forgiveness" and duck you responsibility to pay. If everyone could do this how would the banks survive? Without banking the economy would collapse. The system isn't perfect, but it must operate efficiently to work. What we have in place is not working efficiently and is detrimental to everyone, not just retirees.

Very well said

[dougawhite]

Our financial planner says we have to die one year sooner now to allow for losses due to inflation...

[mermaids]

One way to save money. Do not shop at Appliance Direct!!
They are not a reputable company and unfortunately we found that out the hard way!!

[Stu from NYC]

Our financial planner says we have to die one year sooner now to allow for losses due to inflation...

If he charges you based on a percentage of assets on a yearly basis he loses if you die a year early.

Hope he realizes that or not much of a planner for his own income.

[Michael G.]

That is why I only buy stuff at Publix that we cannot get elsewhere

If I can't buy it at Aldi's, I don't eat.

[tophcfa]

On a positive note, have you checked the value of your house? At least in The Villages inflation has proven to work in our favor. Hope that's true for you.

Don’t you mean on a negative note, your home will be reaccessed and your property taxes will get jacked up.

[MartinSE]

I know enough basic macro economics to know my limitations and that there is no free lunch. During the pandemic, government saved the economy by giving money, and reducing payments to folks and businesses that would have otherwise gone under. Frankly, they did a great job of saving the nation from the worst, but there had to be a downside and we are looking it in the teeth now. Considering the magnitude of the problem, they are doing a fair job of managing the problem.

Barring total collapse, we have enough saved to survive until our death, so we haven't changed much. We have been relatively frugal and plan to continue as such.

If I were much younger, this would be my strategy: Spend my accumulated savings to buy something at 2022 dollars that will earn a little until the inflation is under control and then sell it at 2030 dollars. A good option now would be to buy a Villages villa now, rent it out, and sell it in 2030.

There is always risk of gain or loss, but the alternative is certain loss.

I agree with you. Things are bad all over the world, but the US is starting to turn the corner.

We also have enough to last us, unless the bottom falls out completely. We would like to leave as much as possible to our kids, so we are usually "frugal" and now is not any different for us. We mostly cook at home, (eat out when we go to Gainesville to the VA Doctor) and that is about all the eating out we do. We typically don't drive much of anywhere, so the gas we drive is for our trips to the doctor - a few times per month.

[jimbomaybe]

I detest the term "seniors on a fixed income". Ask anyone who works for a living if they are on a fixed income or not? Do you think the employee can walk into their employers office and demand a raise to keep up with inflation? Don't think so. Do retirees receive cost of living adjustments to their SSA and pensions? Some do without having to go to their providers and request them.
Yes, inflation affects us all but don't think those working for a living have a choice to increase their wages upon demand to keep up with inflation.
It seems like no one wants to back off on their spending. Industry needs to drive the economy, not the consumer. Bring back overseas jobs so the supply chain is not disrupted again. Reinstate construction of pipelines for oil and natural gas transmission. Close the southern boarder and relieve the taxpayer from paying for all the benefits invaders take advantage of by walking across the southern boarders, which many taxpayers cannot afford on their pay. Quit printing money and giving away money and our next generation's future in this process. If you make a commitment to repay a loan, then repay it. Don't expect "forgiveness" and duck you responsibility to pay. If everyone could do this how would the banks survive? Without banking the economy would collapse. The system isn't perfect, but it must operate efficiently to work. What we have in place is not working efficiently and is detrimental to everyone, not just retirees.
Many pension plans and SS have built in increases that however only very rarely keep pace with buying power of the dollar, working people have the option of finding employment elsewhere if their employer cannot or will not compete with other business they lose workers , Inflation is and always has been a function of more money chasing the same amount of goods and services, this is controlled by monetary policy and fiscal policy of our government, the money given out by our government to make for a soft landing and ,they said prevent a recession, was too soft causing a rebound in inflation, we now are seeing an inverted yield curve something that historically prestages a recession

[Two Bills]

I agree with you. Things are bad all over the world, but the US is starting to turn the corner.

We also have enough to last us, unless the bottom falls out completely. We would like to leave as much as possible to our kids, so we are usually "frugal" and now is not any different for us. We mostly cook at home, (eat out when we go to Gainesville to the VA Doctor) and that is about all the eating out we do. We typically don't drive much of anywhere, so the gas we drive is for our trips to the doctor - a few times per month.

Wife and I both came from very poor families, inherited nothing, but worked our socks off to give ourselves a better life.
We look at at inheritance from a different angle, ie. the kids can have anything left over!

[jedalton]

Qyld. Pays 1 percent a month. Writes covered calls on Microsoft, Apple etc. even if you lost 10 percent on principle you still earned 2 percent for the year
hope you own the stock if you are writing covered calls.

[Luggage]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !
I consider myself semi-retired and will continue to take part-time marketing jobs for websites the rest of my life. The only difference is I don't have to get up at 7:00 in the morning to commute an hour and a half to New York anymore

[rsmurano]

If you have your money in a savings account you have been losing money your whole life. To make money, you have to invest it. No cd/savings account interest rate will make you money compared to investing it in the market, never had, never will. Last year, I averaged over 35% gain in my portfolio, why would I think of putting my money in a cd that gets 2% or less?
But now isn’t the time to jump all into the market either IMO.
IMO, learning finances at an early age in life is critical so you have enough money in your later years to not have to worry about these inflation periods. If you don’t know how to invest, hire a good person to do it for you but you need to learn what they are doing and why so you can do it yourself in the long run.

[Byte1]

Wife and I both came from very poor families, inherited nothing, but worked our socks off to give ourselves a better life.
We look at at inheritance from a different angle, ie. the kids can have anything left over!

Totally agree. Kids(many) today are living much better than we did. We had it hard, often working three jobs to provide for the bills and food on the table. The kids don't even remember and told us that they had a great childhood. My kids are living better than we are, so why should we cut corners just so we can leave them a decent nest egg? Sorry, but we will continue to save only for emergencies and the ability to eat out once a week. Our grocery bill has doubled, and we purchase a lot of store brand products now. And we do have the option to move to an area where we would not have to pay all the fees we pay to live in the Villages. We are on a fixed income, but we have no intention of sacrificing just to GIVE our kids a gift of our dying. What little we could give them would be gone in a flash anyway. My only concern is leaving enough for my spouse to live comfortably and not have to rely on the "kids." Even though life insurance is not the optimum investment, I have enough to provide my spouse with a respectful sustainability. If not used, THEN the kids get what is left over. We were gifted nothing by our parents, except funeral bills but we managed. We won't be leaving our kids funeral bills.
Inflation is aggravating to us that are on fixed incomes.
Food seems to be doubled
Utilities have gone up
Fuel has doubled
Eating out has gone way up
But, we can hang on again and will enjoy a breather eventually, where we will be able to catch our financial breaths before then next economic fiasco.

[davem4616]

On a positive note, have you checked the value of your house? At least in The Villages inflation has proven to work in our favor. Hope that's true for you.


the increased assessed value of our house was the prime reason our home insurance went up a little this year....not the 'roofing scams'

[rsmurano]

40 percent of my portfolio is in stocks, 60 percent in bonds and cash. Are you suggesting that retirees should put all of their retirement funds in stocks to keep up with inflation?

I never invest in bonds, so my answer is yes to all stocks/index funds. I have in the past invested in hybrid funds where they are more balanced say 50/50 stocks/bonds. They are laggards and not much safer. How have bonds been doing the last few years?
When I was all in in the market before this year, I was 98% in 1 stock and 6 index funds and last year averaged 35% gains.
When things change later this year and I get back in the market, I will buy exactly what I had before.

[davem4616]

I detest the term "seniors on a fixed income". Ask anyone who works for a living if they are on a fixed income or not? Do you think the employee can walk into their employers office and demand a raise to keep up with inflation? Don't think so. Do retirees receive cost of living adjustments to their SSA and pensions? Some do without having to go to their providers and request them.
Yes, inflation affects us all but don't think those working for a living have a choice to increase their wages upon demand to keep up with inflation.
It seems like no one wants to back off on their spending. Industry needs to drive the economy, not the consumer. Bring back overseas jobs so the supply chain is not disrupted again. Reinstate construction of pipelines for oil and natural gas transmission. Close the southern boarder and relieve the taxpayer from paying for all the benefits invaders take advantage of by walking across the southern boarders, which many taxpayers cannot afford on their pay. Quit printing money and giving away money and our next generation's future in this process. If you make a commitment to repay a loan, then repay it. Don't expect "forgiveness" and duck you responsibility to pay. If everyone could do this how would the banks survive? Without banking the economy would collapse. The system isn't perfect, but it must operate efficiently to work. What we have in place is not working efficiently and is detrimental to everyone, not just retirees.


Sounds like you and I were brought up with similar values

[Eg_cruz]

Have slow the traveling.
I had to order cat litter refill trays…..they are up 60%……60% in the last 18 months
This is getting out of control

[Two Bills]

Have slow the traveling.
I had to order cat litter refill trays…..they are up 60%……60% in the last 18 months
This is getting out of control

Swap the cat litter for sandy dirt.
Plenty of that free in Florida.

[Stu from NYC]

If you have your money in a savings account you have been losing money your whole life. To make money, you have to invest it. No cd/savings account interest rate will make you money compared to investing it in the market, never had, never will. Last year, I averaged over 35% gain in my portfolio, why would I think of putting my money in a cd that gets 2% or less?
But now isn’t the time to jump all into the market either IMO.
IMO, learning finances at an early age in life is critical so you have enough money in your later years to not have to worry about these inflation periods. If you don’t know how to invest, hire a good person to do it for you but you need to learn what they are doing and why so you can do it yourself in the long run.

Very true lots of good books to be had in the library (or should be in the library) to teach the fundamentals of investing. Or spend a few bucks on Amazon to buy a couple of books.
A good personal finance magazine like Kiplingers is also a good idea

[rustyp]

Ultimate results of printing money (inflation) on the holder country of the world's reserve currency does not end well per history. A shortened version of a very educational documentary. Caution not suited for Pollyannas.

https://www.youtube.com/watch?v=Z5OOy82wKCY

[Joanne19335]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !

I group my trips as often as possible. I “top off” my gas tank, so it’s always full. Even though I have a economical car, I go where it’s golf cart accessible much more often.

I never ate out much, but now it’s only on special occasions. Prices are soaring and service has declined. I have become a good cook.

I live in a friendly neighborhood and we do things together (golf, lunch, visiting). Expenses are minimal.

I haven’t had a vacation or returned to my native Philadelphia since I moved here four years ago. For the time being, I have no plans to do so.

I cut the cord, switched from Verizon to T-Mobile and am saving $270/month. Due to a golf cart accident last September, I have not played championship golf in over five months I have saved thousands of dollars.

I’ve never lived extravagantly, but I’m am getting used to not having everything I want. Doing okay.

[JMintzer]

If he charges you based on a percentage of assets on a yearly basis he loses if you die a year early.

Hope he realizes that or not much of a planner for his own income.

https://i.kym-cdn.com/photos/images/facebook/000/992/404/7f2.jpg

[JMintzer]

I agree with you. Things are bad all over the world, but the US is starting to turn the corner.

https://media0.giphy.com/media/hvq8ONQhQ1XLq/giphy.gif

[Keefelane66]

Talking with my kids yesterday talked about food prices adds WalMart, Publix, Winn Dixie price comparisons apples to apples. Seems we are being taken advantage of here in the bubble from produce to meat products. Suggestion if you don’t like the price move on and wait for a sale don’t impulsive buy! Yes they have seen price increases but not like here.

[OhioBuckeye]

You know we had riots because some ex convict got killed but when it effects everybody we just sit around & talk about it & it keeps getting worse & worse! All I can say is we’ll just have to suck it up until we’ve had enough. Don’t know what else to tell you.

[Mikee1]

Traveling a little less. Jet fuel is way up now, so I just travel less.

[tophcfa]

Ultimate results of printing money (inflation) on the holder country of the world's reserve currency does not end well per history. A shortened version of a very educational documentary. Caution not suited for Pollyannas.

https://www.youtube.com/watch?v=Z5OOy82wKCY

Good to see that someone else actually gets it, the root cause of the inflation we are experiencing is about 13 years of irresponsible monetary and fiscal policy. Rapid expansion of the money supply (printing $$), artificially low interest rates, and unprecedented rapid growth of unsustainable debt are why we are currently experiencing hyper inflation.

I am sick of hearing the excuse that inflation is because of Covid, supply chain shortages, or the Russian invasion of Ukraine. The biggest misleading statement is that current inflation is transitory, unless transitory means several years? All those excuses were merely triggers that set off the inevitable hyper inflation caused be irresponsibility. Because of this incredible irresponsibility, the Federal Reserve doesn’t have the tools at it’s disposal necessary to combat inflation like it did back in the early 1980’s. Not trying to be an alarmist, just a realist. An economy fueled by cheap money and debt is going to eventually crash and burn. Buckle up for a long and bumpy ride.

[rustyp]

Ultimate results of printing money (inflation) on the holder country of the world's reserve currency does not end well per history. A shortened version of a very educational documentary. Caution not suited for Pollyannas.

https://www.youtube.com/watch?v=Z5OOy82wKCY

Good to see that someone else actually gets it, the root cause of the inflation we are experiencing is about 13 years of irresponsible monetary and fiscal policy. Rapid expansion of the money supply (printing $$), artificially low interest rates, and unprecedented rapid growth of unsustainable debt are why we are currently experiencing hyper inflation.

I am sick of hearing the excuse that inflation is because of Covid, supply chain shortages, or the Russian invasion of Ukraine. The biggest misleading statement is that current inflation is transitory, unless transitory means several years? All those excuses were merely triggers that set off the inevitable hyper inflation caused be irresponsibility. Because of this incredible irresponsibility, the Federal Reserve doesn’t have the tools at it’s disposal necessary to combat inflation like it did back in the early 1980’s. Not trying to be an alarmist, just a realist. An economy fueled by cheap money and debt is going to eventually crash and burn. Buckle up for a long and bumpy ride.

IMHO You are smarter than the average bear. This documentary strikes home (pun intended) to me that rising home values are devastating to our economy. It is going to create huge unrest between haves and have nots and that's not good per this documentary. Interesting solutions at the end of the clip.

[Stu from NYC]

Good to see that someone else actually gets it, the root cause of the inflation we are experiencing is about 13 years of irresponsible monetary and fiscal policy. Rapid expansion of the money supply (printing $$), artificially low interest rates, and unprecedented rapid growth of unsustainable debt are why we are currently experiencing hyper inflation.

I am sick of hearing the excuse that inflation is because of Covid, supply chain shortages, or the Russian invasion of Ukraine. The biggest misleading statement is that current inflation is transitory, unless transitory means several years? All those excuses were merely triggers that set off the inevitable hyper inflation caused be irresponsibility. Because of this incredible irresponsibility, the Federal Reserve doesn’t have the tools at it’s disposal necessary to combat inflation like it did back in the early 1980’s. Not trying to be an alarmist, just a realist. An economy fueled by cheap money and debt is going to eventually crash and burn. Buckle up for a long and bumpy ride.

You nailed it. Unfortunately nobody who can do something about it seems to care about bringing the budget under control.

[Babubhat]

Cut my dining out and cable. An easy 300 a month. Missing neither. Just added WDW tickets to the cuts. Had enough of their nonsense

[maistocars]

I agree with you. Things are bad all over the world, but the US is starting to turn the corner.

We also have enough to last us, unless the bottom falls out completely. We would like to leave as much as possible to our kids, so we are usually "frugal" and now is not any different for us. We mostly cook at home, (eat out when we go to Gainesville to the VA Doctor) and that is about all the eating out we do. We typically don't drive much of anywhere, so the gas we drive is for our trips to the doctor - a few times per month.
What corner is that?

[bp243]

How is this a positive ? Unless it was investment property and you are selling and not buying another house (because that one has increased by the same percentage) what your feeling is no more than emotion. In fact that increase will cost you money - example homeowners insurance will go up based upon replacement cost.

Guess that it's a 'state of mind', as you mentioned. It's how I like to think, but understand how you might think differently.

[bp243]

Don’t you mean on a negative note, your home will be reaccessed and your property taxes will get jacked up.

That's a good point, so planning for that.

[Babubhat]

No. Your house will increase proportional to all. A minimal impact if any

[Garywt]

I guess we are on a semi fixed budget, my wife works still and I collected disability and my pension. I understand fixed income when retired based on the fact that your monthly income drops so much that you have to adjust your lifestyle some.

We have no plans to change this years. Still driving, camping, boating, going on a cruise, going to Aruba (timeshare) and eating. No need for us to adjust. When my wife retires we will most likely sell the northern house for additional funds but at 57 she is not ready to retire.

[zendog3]

One way to save money. Do not shop at Appliance Direct!!
They are not a reputable company and unfortunately we found that out the hard way!!

Off topic but: I bought two major appliances from Appliance Direct. They had a range that was not available from Lowes, or Best Buy and was available only months out from Home Depot. The price was good, with delivery and installation. I recommend them, but others may have different experiences.

[GOLFER54]

When things get really bad, I am prepared to sell my toenail collection.

[Babubhat]

There are plenty of Villages annuity salesman and reverse mortgage people who will cure your problem. :)

[OrangeBlossomBaby]

OBB, add your anticipated Social Security Income to your husband's income then go to Healtcare.Gov (Obamacare) and check out your exact coverage today against what it will be with your new S.S. income. Get prepared to trick out what you've got. Sorry to be the bad news guy but this just happened to my best friend in Jorsey. Sad.

Inflation, whatever, we are alive and kicking. I'm good with whatever comes at us. :1rotfl: I may be shocked sometimes but what are you gonna do? NOTHING! I did some shopping the other day at Publix and was shocked beyond shocked at some of the prices.

Yeah we got a kick in the teeth for this year's health insurance. Neither of us are old enough for Medicare yet, so we rely on the ACA (colloquially known as Obamacare) for subsidies. In 2020, we paid $13/month for premiums. That was great, because neither of us had Social Security yet, and hubby's pension had -just- kicked in after around 6 months of ONLY unemployment benefits. His company closed the department and put him out of work 2 years before he could get full retirement benefits (which would've included health insurance coverage).

In 2021, our premiums went up to around $80, because we were both working part time, and then his Social Security had just kicked in mid-year. So our premiums were based on only 6 months worth of SS rather than a full year's worth.

This year, our premiums are $386/month, even though I retired fully.

I imagine next year we'll be looking at around $1200/month for the two of us if we stick with the plan we have. We'll probably have to take a plan that's not as good, and not get any subsidies at all, and pay the regular price on the marketplace. It'll be around $480/month. But we can at least keep the doctors we have.

[Michael G.]

When things get really bad, I am prepared to sell my toenail collection.

I sold my toenails on e-Bay last month and got $12,000 for them.
I said they were Halle Barry's toenails.

Works for me

[craigrmorrison]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !
Drastically reduced travel.

[Babubhat]

Need to implement tax strategies to keep your ACA income below the subsidy limits if you are close. I have done it for years

[Garywt]

Yeah we got a kick in the teeth for this year's health insurance. Neither of us are old enough for Medicare yet, so we rely on the ACA (colloquially known as Obamacare) for subsidies. In 2020, we paid $13/month for premiums. That was great, because neither of us had Social Security yet, and hubby's pension had -just- kicked in after around 6 months of ONLY unemployment benefits. His company closed the department and put him out of work 2 years before he could get full retirement benefits (which would've included health insurance coverage).

In 2021, our premiums went up to around $80, because we were both working part time, and then his Social Security had just kicked in mid-year. So our premiums were based on only 6 months worth of SS rather than a full year's worth.

This year, our premiums are $386/month, even though I retired fully.

I imagine next year we'll be looking at around $1200/month for the two of us if we stick with the plan we have. We'll probably have to take a plan that's not as good, and not get any subsidies at all, and pay the regular price on the marketplace. It'll be around $480/month. But we can at least keep the doctors we have.

Increases like that would hurt anyone. Our insurance actually went down some because our youngest turned 26 last year and we went to a 2 person policy. My pension covers health insurance luckily. Best of luck.

[PugMom]

Everyone (except the top .1%) is on a fixed income.
:ohdear:

:pray::bigbow::mademyday:

[PugMom]

this is 1 of the best threads i've seen so far. so many different opinions & methods. thank you all for the insight re: investments

[Wyseguy]

Since you are flooding the airways with "just curious" subjects please post them where they belong - The Villages, Florida. non villages discussion.

Be Nice.

[Wyseguy]

Increases like that would hurt anyone. Our insurance actually went down some because our youngest turned 26 last year and we went to a 2 person policy. My pension covers health insurance luckily. Best of luck.

I was on ACA for awhile. Because I was working, I did not qualify for the larger subsidies. I also was not able to get the better plans. I spend 407.00 a month with a 10,000.00 deductible. The ACA agent told me if I stopped working he could improve the plan and the premium part I paid would be much lower.

[rustyp]

I was on ACA for awhile. Because I was working, I did not qualify for the larger subsidies. I also was not able to get the better plans. I spend 407.00 a month with a 10,000.00 deductible. The ACA agent told me if I stopped working he could improve the plan and the premium part I paid would be much lower.

It was not because you were working. It was because of your income level. One does not have to work to have income. I'm not trying to be funny or sarcastic here. This is a very important subject pre medicare retirees should get educated on. First you need to understand what is income per the ACA requirements for subsidy. You may find that shifting some non intuitive items will be helpful. An example is if you have access to after tax money rather than drawing from pre tax accounts it won't count as income for the upcoming year. Another example if you are working you can weigh the financial benefit of stop working when you hit a certain level. The subsidy may be worth more than the money your leaving on the table plus your on vacation for the remainder of the year. Subsidy assistance starts around Mid to high $50K income for married filing joint. Again it what the ACC defines income as. As you march lower down the income scale the subsidies get very substantial quickly.

[Babubhat]

2022 Obamacare subsidy calculator | healthinsurance.org (https://www.healthinsurance.org/obamacare/subsidy-calculator/)

You may have the ability to control the income for the subsidy calculation by shifting income or creating deductions. Take a bit of planning. It’s too late if you wait until filing. Ask your tax advisor . It has a terrible cliff to it

[OhioBuckeye]

You’re right travel less because sitting around & talking about it won’t fix anything!

[justjim]

I’ve observed upper income friends and acquaintances “hog” their estate (which they earned) and when they passed their kids and grandkids had no idea what to do with the money and ended up squandering most of the estate in a year or two. Seriously consider helping them why your alive and you can help with their education and home purchase, etc. By doing that, you can make a better impact to see that your hard earned money goes for the most good. Just a thought. I’ve seen inflation much worse during my lifetime as it can be cyclical. The Federal Reserve should have responded quicker, however, hindsight is “20-20”. In modern times, we have not had a world wide pandemic either and our government should have responded quicker and better because it was predicated by scientists years ago. Again “20-20”!

[Babubhat]

You don’t want your heirs driving to your funeral in a new Porsche from inheritance

[jimbomaybe]

I’ve observed upper income friends and acquaintances “hog” their estate (which they earned) and when they passed their kids and grandkids had no idea what to do with the money and ended up squandering most of the estate in a year or two. Seriously consider helping them why your alive and you can help with their education and home purchase, etc. By doing that, you can make a better impact to see that your hard earned money goes for the most good. Just a thought. I’ve seen inflation much worse during my lifetime as it can be cyclical. The Federal Reserve should have responded quicker, however, hindsight is “20-20”. In modern times, we have not had a world wide pandemic either and our government should have responded quicker and better because it was predicated by scientists years ago. Again “20-20”!

I am curious as to what you think the government should have done "quicker" "better" ?

[Michael G.]

Many senior friends of mine are slowing giving their sons/daughters some of their inheritance while their living.

I'm sure there is a certain percentage of financial guidance involved with mom and dad that comes with it.

[justjim]

I am curious as to what you think the government should have done "quicker" "better" ?

Too easy to get political and best not go in that direction and not allowed on TOTV.

[justjim]

Many senior friends of mine are slowing giving their sons/daughters some of their inheritance while their living.

I'm sure there is a certain percentage of financial guidance involved with mom and dad that comes with it.

Good to hear.

[Michael G.]

Too easy to get political and best not go in that direction and not allowed on TOTV.

Smart choice unless to want to get spanked by the mods.......:shocked:

[MartinSE]

Inflation is a fact of life with an economic model based on constant growth. It seems to come about every 10 years.

With a world based economy, with 7 billion people, a lot of the economic models so far have been based on constant growth. I believe that will need to change. Ideally, a steady state economy with no money.

But, what do I know - LOL!

[Babubhat]

Use a trust

[rustyp]

The hedge against hyperinflation predicted by many economists is bitcoin. In fact many economists predict bitcoin will become the world's reserve currency. El Salvador last year was the first country to recognize bitcoin as a reserve currency alongside the US dollar last year. Tomorrow starts the 2022 bitcoin conference in Miami. It is rumored possibly up to another dozen countries will make the same announcement at the conference. We are witnessing the demise of a world currency held by one country.

[Packer Fan]

I am curious as to what you think the government should have done "quicker" "better" ?

I will answer that one because it is so easy. Even though he said it "in hindsight" I can point to many Facebook posts I made and friends I told a year ago. I lead the Supply Chain at a large corporation (in the S&P500). At the beginning of 2021 I saw inflation, and started to call on The FED to raise rates, and the government to stop ALL subsidies. When the FED said it was transitory, I said it was not, and they should raise rates. When the Federal Government started its war on oil, I said this would end badly. Well the chickens have come home to roost. Inflation is RAMPANT. I spend all my days discussing price increases with suppliers - This week - Nylon, Polypropolene, Corrugate, plastic packaging, and drawer slides and the week is just getting started. Thes price increases are round 4 by my count and will not hit consumers until the second half of this year. Labor and Oil are the cost drivers. All those kids you people raised trying to be their friends don't want to work, and we want to go beg everyone else to produce more oil instead of working with our domestic industry. The solution?

1. Raise the Fed Funds rate by 1/2 percent this month, and by 1/4 every month going forward.
2. Unlimited drilling leases and restart the Keystone XL pipeline.
3. Fast track the 6 other new pipelines for Gas and Oil that regulators are sitting on.
4. Go back to the Clinton era regulations on Welfare and make everyone work.
5. Cut back US government spending by 10% immediately.
6. Open up LEGAL immigration to 5 million legal immigrants from Central and South America a year with a clear path to citizenship - you work for a company in the US with a clean work record for 10 years, pass a US history and English test and we make you a citizen. NO ILLEGALS get citizenship. They have to go back and get in line. We need workers BADLY and this would give them to us.

The solution to this is simple, but the Federal reserve and the President are not willing to do it, so my suggestion is buy real estate, stocks, and commodities. Also wait until 70 to take your Social Security, but that was a no brainer before this. It is the best inflation protection you can buy.

BTW- I tried to stay away as much from Politics as I could here by offering direct solutions. I really don't care what party it is, something needs to be done.

[MartinSE]

Bitcoins use an enormous amount of energy to mine, resulting is contribution to climate change. Bitcoins use an enormous amount of computers/GPUs to mine, using rare earth minerals.

There are better alternatives.

[Babubhat]

There are hundreds of coins. Nothing special about Btc other than hyped by media and those who paid little for it. Speculators love action. Just another tulip based on faith. It’s great until it isn’t

[rustyp]

Bitcoins use an enormous amount of energy to mine, resulting is contribution to climate change. Bitcoins use an enormous amount of computers/GPUs to mine, using rare earth minerals.

There are better alternatives.

I agree with you. The real plus of bitcoin is takes money from a centralized system to a decentralized system. Just like electric vehicles will take an enormous amount of energy in the form of electricity demand and need to build charging stations bitcoin will grow and problem solutions will be developed. IMHO bitcoin development is moving faster than EV development. Much of bitcoin issues can be solved with education ans software. EVs need a whole materialistic infrastructure to be built. Don't lose site of batteries are doing a pretty good job of consuming some non abundant minerals. Myself I'm rooting for both EVs and bitcoin. Necessity is the motherhood of invention.

[rustyp]

There are hundreds of coins. Nothing special about Btc other than hyped by media and those who paid little for it. Speculators love action. Just another tulip based on faith. It’s great until it isn’t

Bitcoin was the first cryptocurrency and altcoins just stands for all other cryptocurrencies that have been created since. Bitcoin has far more infrastructure in place than the next leading coin. If cryptocurrency becomes the world's reserve standard at this moment in time bitcoin is far in the lead.

[jimbomaybe]

I will answer that one because it is so easy. Even though he said it "in hindsight" I can point to many Facebook posts I made and friends I told a year ago. I lead the Supply Chain at a large corporation (in the S&P500). At the beginning of 2021 I saw inflation, and started to call on The FED to raise rates, and the government to stop ALL subsidies. When the FED said it was transitory, I said it was not, and they should raise rates. When the Federal Government started its war on oil, I said this would end badly. Well the chickens have come home to roost. Inflation is RAMPANT. I spend all my days discussing price increases with suppliers - This week - Nylon, Polypropolene, Corrugate, plastic packaging, and drawer slides and the week is just getting started. Thes price increases are round 4 by my count and will not hit consumers until the second half of this year. Labor and Oil are the cost drivers. All those kids you people raised trying to be their friends don't want to work, and we want to go beg everyone else to produce more oil instead of working with our domestic industry. The solution?

1. Raise the Fed Funds rate by 1/2 percent this month, and by 1/4 every month going forward.
2. Unlimited drilling leases and restart the Keystone XL pipeline.
3. Fast track the 6 other new pipelines for Gas and Oil that regulators are sitting on.
4. Go back to the Clinton era regulations on Welfare and make everyone work.
5. Cut back US government spending by 10% immediately.
6. Open up LEGAL immigration to 5 million legal immigrants from Central and South America a year with a clear path to citizenship - you work for a company in the US with a clean work record for 10 years, pass a US history and English test and we make you a citizen. NO ILLEGALS get citizenship. They have to go back and get in line. We need workers BADLY and this would give them to us.

The solution to this is simple, but the Federal reserve and the President are not willing to do it, so my suggestion is buy real estate, stocks, and commodities. Also wait until 70 to take your Social Security, but that was a no brainer before this. It is the best inflation protection you can buy.

BTW- I tried to stay away as much from Politics as I could here by offering direct solutions. I really don't care what party it is, something needs to be done.

Hard to argue with your post, many good ideas won't work in the real world ( avoiding the P word ) the only fly in your ointment Packers ??? Go Bears !!

[Michael G.]

Packers ??? Go Bears !!

To hell with the Bears, their losers.........Go Packers ! :thumbup:

[JMintzer]

Many senior friends of mine are slowing giving their sons/daughters some of their inheritance while their living.

I'm sure there is a certain percentage of financial guidance involved with mom and dad that comes with it.

Yup. There is a limit on how much you can "gift" a child per year without major tax ramifications...

[retiredguy123]

Yup. There is a limit on how much you can "gift" a child per year without major tax ramifications...
That is a law that is often misunderstood. Actually, you can give any individual up to $16,000 each every year with no tax consequences. But, even if you exceed that amount, as long as your entire estate does not exceed $12.06 million, you will owe no taxes. If you exceed the $16,000 annual limit in a single year, you just need to file a gift tax form, but you will owe no taxes until you exceed the lifetime $12.06 million amount. Note that the $12.06 million lifetime limit is scheduled to decrease to $6 million in 2026.

[rustyp]

That is a law that is often misunderstood. Actually, you can give any individual up to $16,000 each every year with no tax consequences. But, even if you exceed that amount, as long as your entire estate does not exceed $12.06 million, you will owe no taxes. If you exceed the $16,000 annual limit in a single year, you just need to file a gift tax form, but you will owe no taxes until you exceed the lifetime $12.06 million amount. Note that the $12.06 million lifetime limit is scheduled to decrease to $6 million in 2026.

I'm screwed if I make till 2026. Calling the kids tonight giving them the bad news.

[Stu from NYC]

That is a law that is often misunderstood. Actually, you can give any individual up to $16,000 each every year with no tax consequences. But, even if you exceed that amount, as long as your entire estate does not exceed $12.06 million, you will owe no taxes. If you exceed the $16,000 annual limit in a single year, you just need to file a gift tax form, but you will owe no taxes until you exceed the lifetime $12.06 million amount. Note that the $12.06 million lifetime limit is scheduled to decrease to $6 million in 2026.

Does the recipient owe taxes about $ 16,000?

[retiredguy123]

Does the recipient owe taxes about $ 16,000?
No. A gift is not taxable income. That is another common misconception.

[JMintzer]

That is a law that is often misunderstood. Actually, you can give any individual up to $16,000 each every year with no tax consequences. But, even if you exceed that amount, as long as your entire estate does not exceed $12.06 million, you will owe no taxes. If you exceed the $16,000 annual limit in a single year, you just need to file a gift tax form, but you will owe no taxes until you exceed the lifetime $12.06 million amount. Note that the $12.06 million lifetime limit is scheduled to decrease to $6 million in 2026.

Oh, well now I'm screwed! Gotta' start spending that $6.02 Million now! :1rotfl:

[Boomer]

On the thread topic of inflation………

If you are interested in hearing an actual economist give his opinion, take a look at Consuelo Mack’s most recent program “WealthTrack” (PBS). Past episodes can be found at wealthtrack.com

I record “WealthTrack” each week. It is a short show, well-organized, and, at the end of every program, she always asks the professional she interviews to give a “tip” to her viewers.

The guy she talked to last week is known as a Fed Watcher (aren’t we all) who has some interesting comments on how he is viewing globalization now and also talks about behavioral economics.

I am fascinated by the behavioral aspect of economics and, boy oh boy, we sure are in the throes of that right now, especially re. the housing market. He also talks about the effect of the supply chain mess on behavioral econ.

If you watch this episode, don’t let the guy’s haircut distract you. Great hair. Weird style. :)

Boomer

[MartinSE]

///

[MartinSE]

On the thread topic of inflation………

If you are interested in hearing an actual economist give his opinion, take a look at Consuelo Mack’s most recent program “WealthTrack” (PBS). Past episodes can be found at wealthtrack.com

I record “WealthTrack” each week. It is a short show, well-organized, and, at the end of every program, she always asks the professional she interviews to give a “tip” to her viewers.

The guy she talked to last week is known as a Fed Watcher (aren’t we all) who has some interesting comments on how he is viewing globalization now and also talks about behavioral economics.

I am fascinated by the behavioral aspect of economics and, boy oh boy, we sure are in the throes of that right now, especially re. the housing market. He also talks about the effect of the supply chain mess on behavioral econ.

(If you watch this episode, don’t let the guy’s haircut distract you. Great hair. Weird style. :) )

Boomer

Thank you for the post, I will certainly watch it.

At first I was afraid the "economist" would be an "expert". ahem... But, I see it is on PBS, and I have confidence in PBS to not air nonsense. I don't always agree with them, but in general they seem to be reliable.

[kkingston57]

Don’t you mean on a negative note, your home will be reaccessed and your property taxes will get jacked up.

Only if you are not a Florida resident. Rate of tax hike is capped. Do not know the cap rate but it is around 2-3%.

[Bay Kid]

That is a law that is often misunderstood. Actually, you can give any individual up to $16,000 each every year with no tax consequences. But, even if you exceed that amount, as long as your entire estate does not exceed $12.06 million, you will owe no taxes. If you exceed the $16,000 annual limit in a single year, you just need to file a gift tax form, but you will owe no taxes until you exceed the lifetime $12.06 million amount. Note that the $12.06 million lifetime limit is scheduled to decrease to $6 million in 2026.

That $6 million won't be worth that the way inflation is going.

[kkingston57]

2022 Obamacare subsidy calculator | healthinsurance.org (https://www.healthinsurance.org/obamacare/subsidy-calculator/)

You may have the ability to control the income for the subsidy calculation by shifting income or creating deductions. Take a bit of planning. It’s too late if you wait until filing. Ask your tax advisor . It has a terrible cliff to it

Watch out for those sneaky capital gains taxes if you own mutual funds. In my case I do not see the income but it did come up and bite me in the(you know the word)

[Stu from NYC]

Watch out for those sneaky capital gains taxes if you own mutual funds. In my case I do not see the income but it did come up and bite me in the(you know the word)

Every time we sit down with cpa about tax return those things pop up. Very annoying.

[retiredguy123]

Watch out for those sneaky capital gains taxes if you own mutual funds. In my case I do not see the income but it did come up and bite me in the(you know the word)
With mutual funds, there are two ways you can owe capital gains taxes. One way is for the fund manager to sell individual stocks within the fund and issue a capital gains distribution to the fund shareholders. The other way is if you sell some of your fund shares yourself that have appreciated in value. In either case, you will see the income unless you have directed the fund manager to reinvest the capital gains distributions by buying additional shares of the fund. In that case, you will see the income as additional shares in your fund account.

For the mutual funds that I own, I direct the fund manager to transfer all capital gains distributions and dividends into my money market account. That way, I always have the same number of mutual fund shares in my account, and the income shows up as a deposit into my money market account. But either way, the income is taxable.

[Michael G.]

With mutual funds, there are two ways you can owe capital gains taxes. One way is for the fund manager to sell individual stocks within the fund and issue a capital gains distribution to the fund shareholders. The other way is if you sell some of your fund shares yourself that have appreciated in value. In either case, you will see the income unless you have directed the fund manager to reinvest the capital gains distributions by buying additional shares of the fund. In that case, you will see the income as additional shares in your fund account.

For the mutual funds that I own, I direct the fund manager to transfer all capital gains distributions and dividends into my money market account. That way, I always have the same number of mutual fund shares in my account, and the income shows up as a deposit into my money market account. But either way, the income is taxable.

We live, we learn, we act

[OrangeBlossomBaby]

The people hurt most by inflation and low interest rates are those with substantial savings and invested assets. Not only is your purchasing power affected, but your entire portfolio loses value. At least in the 1970's and 1980's, you got a decent return on fixed income investments, like money market accounts and CDs. I hope that interest rates will soon increase to correct this situation. Currently, savers are being severely punished.

Feel free to give me all of your substantial savings and invested assets. I'll be more than happy to suffer in your place.

You can clip coupons and look for sales at the supermarket to see if you can save a buck on a couple pounds of ground beef. I'm sure you'll have a blast.

[Stu from NYC]

Feel free to give me all of your substantial savings and invested assets. I'll be more than happy to suffer in your place.

You can clip coupons and look for sales at the supermarket to see if you can save a buck on a couple pounds of ground beef. I'm sure you'll have a blast.

People who have lived under their means to save for retirement and want to keep their money safe are being hurt badly by very low interest rates.

Glad to see rates going back up to a more reasonable level.

[retiredguy123]

Feel free to give me all of your substantial savings and invested assets. I'll be more than happy to suffer in your place.

You can clip coupons and look for sales at the supermarket to see if you can save a buck on a couple pounds of ground beef. I'm sure you'll have a blast.
Interesting post. My point was that some people are savers and some are spenders. I am a saver and always have been. I think that people should have a right to save money. I have accumulated far more money than I will ever spend. Most people want to talk about inflation in terms of their current income and the higher cost of the products that they buy every day. But, to me and other savers, there is a huge deficit between the artificially low interest rates and the inflation rate. The interest rates are artificial because they are not based on the normal supply and demand equation for money. The Federal Reserve is stacking the deck. So, for example, if you have $100K earning a measly 2 percent, and the inflation rate is 8 percent, you are actually losing $6,000 every year in buying power and real wealth regardless of what you spend for food or other essential items. If you have a million dollars or more, the effect is much worse. I am not asking for sympathy, but I think we should encourage and reward savers as a responsible policy.

[CoachKandSportsguy]

///

[MartinSE]

Interesting post. My point was that some people are savers and some are spenders. I am a saver and always have been. I think that people should have a right to save money. I have accumulated far more money than I will ever spend. Most people want to talk about inflation in terms of their current income and the higher cost of the products that they buy every day. But, to me and other savers, there is a huge deficit between the artificially low interest rates and the inflation rate. The interest rates are artificial because they are not based on the normal supply and demand equation for money. The Federal Reserve is stacking the deck. So, for example, if you have $100K earning a measly 2 percent, and the inflation rate is 8 percent, you are actually losing $6,000 every year in buying power and real wealth regardless of what you spend for food or other essential items. If you have a million dollars or more, the effect is much worse. I am not asking for sympathy, but I think we should encourage and reward savers as a responsible policy.

Spenders or Savers? That is the only two choices? Seriously? I guess I don't fit in then, just like everything else. Life is seldom black and white, spender and saver, liberal and progressive. Everyone I know has much more complexity than that.

[Stu from NYC]

With mutual funds, there are two ways you can owe capital gains taxes. One way is for the fund manager to sell individual stocks within the fund and issue a capital gains distribution to the fund shareholders. The other way is if you sell some of your fund shares yourself that have appreciated in value. In either case, you will see the income unless you have directed the fund manager to reinvest the capital gains distributions by buying additional shares of the fund. In that case, you will see the income as additional shares in your fund account.

For the mutual funds that I own, I direct the fund manager to transfer all capital gains distributions and dividends into my money market account. That way, I always have the same number of mutual fund shares in my account, and the income shows up as a deposit into my money market account. But either way, the income is taxable.

Interesting but a question. If fund is doing well (and you do not need funds for current expenses) why not reinvest capital gains and dividends? Especially since interest rates are pitifully low right now.

[karostay]

Inflation is rough on retired seniors on fix income everywhere.
Coping with the high cost of gas, cars, food, and many
other products, what's your plan on fighting inflation?

Do you drive less?
Do you eat out less?
Do you socialize more with friends at home?
Did you cancel travel plans this year?

Just curious on how you're dealing with 2022 so far.

Cheers !


Wonder what caused this predicament everything was fine about 14 months ago

[Bill14564]

Wonder what caused this predicament everything was fine about 14 months ago

Wasn't that during the Covid restrictions and lockdowns with hundreds of thousands out of work, tens of thousands dying each month, and the economy tanking? Is that part of the "everything" that was fine?

[CoachKandSportsguy]

now us working stiffs have fixed income as well, its called a salary. . . I don't know about your working days, but I don't get commissions nor a bonus, so its not just retired people who live on fixed income. . .

[retiredguy123]

Interesting but a question. If fund is doing well (and you do not need funds for current expenses) why not reinvest capital gains and dividends? Especially since interest rates are pitifully low right now.
It's a personal choice. I like to know exactly how many shares I have all the time, and my cost basis. It makes monitoring my investments more structured. I can always go online and purchase additional shares by just doing an online transfer from my money market account back to the mutual fund. With the automatic reinvestment feature, you get no advanced warning about how many shares they are buying for you or the amount. So, you may be automatically buying shares in one mutual fund, when it may make more sense to buy shares in a different fund. The reinvestment purchase option is too automatic. I prefer to do it manually and control the timing of share purchases.

[Stu from NYC]

It's a personal choice. I like to know exactly how many shares I have all the time, and my cost basis. It makes monitoring my investments more structured. I can always go online and purchase additional shares by just doing an online transfer from my money market account back to the mutual fund. With the automatic reinvestment feature, you get no advanced warning about how many shares they are buying for you or the amount. So, you may be automatically buying shares in one mutual fund, when it may make more sense to buy shares in a different fund. The reinvestment purchase option is too automatic. I prefer to do it manually and control the timing of share purchases.

Understand. As long as the fund is doing well I have no problem reinvesting. If funds stops doing well for a period of time, than it is time for that fund to go away.

[Babubhat]

Why you own etfs. Mutual funds not tax efficient

[Boomer]

Interesting post. My point was that some people are savers and some are spenders. I am a saver and always have been. I think that people should have a right to save money. I have accumulated far more money than I will ever spend. Most people want to talk about inflation in terms of their current income and the higher cost of the products that they buy every day. But, to me and other savers, there is a huge deficit between the artificially low interest rates and the inflation rate. The interest rates are artificial because they are not based on the normal supply and demand equation for money. The Federal Reserve is stacking the deck. So, for example, if you have $100K earning a measly 2 percent, and the inflation rate is 8 percent, you are actually losing $6,000 every year in buying power and real wealth regardless of what you spend for food or other essential items. If you have a million dollars or more, the effect is much worse. I am not asking for sympathy, but I think we should encourage and reward savers as a responsible policy.


rg123, I think it goes beyond just your “savers and spenders” b&w categories. I think it’s more of a spectrum because there are extremes at either end.

The psychology of money is fascinatingly complex.

There are savers who are quietly careful with their money because they need to be. That makes good sense.

And there are savers who are sensible savers because they are planners and that makes sense to me, too.

But then there are other types of “savers” whose personalities go beyond need or just that “rainy day” routine.

Sometimes certain types of “savers” go overboard because they are control freaks and that trait carries over into other parts of their lives, too. That is just their nature. Control freaks are toxic to relationships.

Then we have the “savers” who make a game out of being just plain cheap — you know, like those who conceal-carry their individual packets of Crystal Light into TV restaurants and then order water — and if they are really tacky, they order water with lemon. (I don’t care if somebody needs to order just water with their restaurant meal, but to whip out those little make-your-own packets is ill-mannered, to say the least.)

If I may, I will add my interpretation of your statement that you have more money saved than you will ever spend………

I am not going to go all judgey on you and say you are bragging……..

I think what you mean could be the same thing as what a very wise woman (who taught me some things I know about money) told me when she was a few years into a comfortable, no money worries, retirement………

She said, “Ya know, by the time you can buy anything you want, you don’t want it anymore.”

Boomer

[retiredguy123]

rg123, I think it goes beyond just your “savers and spenders” b&w categories. I think it’s more of a spectrum because there are extremes at either end.

The psychology of money is fascinatingly complex.

There are savers who are quietly careful with their money because they need to be. That makes good sense.

And there are savers who are sensible savers because they are planners and that makes sense to me, too.

But then there are other types of “savers” whose personalities go beyond need or just that “rainy day” routine.

Sometimes certain types of “savers” go overboard because they are control freaks and that trait carries over into other parts of their lives, too. That is just their nature. Control freaks are toxic to relationships.

Then we have the “savers” who make a game out of being just plain cheap — you know, like those who conceal-carry their individual packets of Crystal Light into TV restaurants and then order water — and if they are really tacky, they order water with lemon. (I don’t care if somebody needs to order just water with their restaurant meal, but to whip out those little make-your-own packets is ill-mannered, to say the least.)

If I may, I will add my interpretation of your statement that you have more money saved than you will ever spend………

I am not going to go all judgey on you and say you are bragging……..

I think what you mean could be the same thing as what a very wise woman (who taught me some things I know about money) told me when she was a few years into a comfortable, no money worries, retirement………

She said, “Ya know, by the time you can buy anything you want, you don’t want it anymore.”

Boomer
This thread is about inflation. My only point was that, if you have no assets saved, the only effect inflation has on you is the day to day cost of the things you buy. But, if you have savings, and the available interest rate on savings is lower than the inflation rate, your saved money is affected as well as your daily expenses. In the past, the interest rate was much higher on savings, so you were not affected as much by inflation.

[Boomer]

This thread is about inflation. My only point was that, if you have no assets saved, the only effect inflation has on you is the day to day cost of the things you buy. But, if you have savings, and the available interest rate on savings is lower than the inflation rate, your saved money is affected as well as your daily expenses. In the past, the interest rate was much higher on savings, so you were not affected as much by inflation.

Uh oh, I guess that was to try to put me in my place. But. But. But. Thinking outside the box and coloring outside the lines and reading between the lines is where my place has always been. So I like to take a little side trip with topics now and then. You know — on topic, but expanded. (sigh)

About what you are saying about the Fed stacking the deck against us regular people who are planners — I agree. We planners have every right to be pizzed off. I think the last time I bought 5% CDs was in 2005. (I did catch a briefly open window at 2% a few years ago, but that window slammed shut fast.)

I feel like the 1980s made the Fed fear inflation to the point of paranoia. In 1979 we bought a nice brick 3/2 ranch for somewhere in the $65,000 range with a 20% downpayment and a locked in mortgage rate of 10% — that we were thrilled to get. Not long after that, rates got even worse.

And then, CD rates went to crazytown. I was basically still a kid at the time but I knew enough to put my daughter’s tuition money in 17% CDs — and I think those rates got even higher. Young though I was, I knew those CD rates were out of whack, but I also knew to grab them while I could. (Volker-time)

The Fed has been screwing around with us for a long time. Fearing inflation led to too-cheap money and now we are in the throes of needing those bushel baskets of money to buy houses that are really not worth even near the price.

But banking and builder and real estate lobbyists are a lot more powerful than us little people.

Besides all that, savers have been forced into staying in the stock market to get any return at all. We can keep our moat of cash around stocks, but have to face no returns on that safety.

If CD rates go up to even 5 or 6% — and I don’t think they will — older, more risk-averse investors will pull money out of this really old bull market because they might have made enough on those stocks to just relax a little and break up with their advisors. Remember a lot of older investors still have pensions. Younger people will not even know what a pension is. Corporations have lobbyists. Pensions are costly to corporations. And don’t get me started on healthcare costs — older boomers did not have to deal much with those through most of our careers and we did not have student loans out the wazoo. Tuition costs were manageable. (And, btw, re. advisors — ever noticed the rise of financial advisors in the past 30 years? Especially this century, more and more? Everybody and their dog is getting into that field now. That group probably has their lobbyists, too.)

Who knows what the Fed will do now. In my Ohio home city, houses are still selling faster than ever before. It takes guerilla tactics to get one. And younger people are having a really hard time getting starter houses because of downsizing boomers and nimble flippers with cash.

Lots to think about these days. And lots of reasons to recognize that older boomers often had things easier financially, in spite of that rough inflation ride that got us 40 years ago for a while. Now, powerful money has its fingers in everything.

But, now, I must be off. :)

Boomer

[retiredguy123]

Not trying to put anyone in their place. Just doing the math. I like math. My original retirement plan years ago was to sell all stocks and live off the interest from CDs. But, now I am 40 percent invested in stocks because CD rates are too low.

[Boomer]

Not trying to put anyone in their place. Just doing the math. I like math. My original retirement plan years ago was to sell all stocks and live off the interest from CDs. But, now I am 40 percent invested in stocks because CD rates are too low.

I am seriously curious about something…..if you do not mind my asking…….

Do you have any thoughts on where you think CD rates might go?

I would love to see something from CDs, but I do not have my hopes up.

Boomer

[dewilson58]

Do you have any thoughts on where you think CD rates might go?

Some Reading.

Will CD Rates Rise in 2022? Here's What Experts Are Saying (https://www.askmoney.com/investing/cd-rates-2022#:~:text=Expert%20opinions%20suggest%20that%20 CD,CDs%20have%20early%20withdrawal%20penalties).

[retiredguy123]

I am seriously curious about something…..if you do not mind my asking…….

Do you have any thoughts on where you think CD rates might go?

I would love to see something from CDs, but I do not have my hopes up.

Boomer
In my opinion, interest rates, including CDs, will remain very low for a long period of time. The goal is to stimulate the economy and encourage borrowing, at the expense of people who are frugal and just want to preserve their savings. But, I have still done extremely well by being frugal and avoiding all debt, including mortgage debt. To me, the worst advice you can give to a young person is that they need to "establish credit". My advice is to pay cash for everything and never go into debt.

[Stu from NYC]

I am seriously curious about something…..if you do not mind my asking…….

Do you have any thoughts on where you think CD rates might go?

I would love to see something from CDs, but I do not have my hopes up.

Boomer

Thinking prime will go to 3-4% but suspect banks will stay at around 2%.

[dewilson58]

In my opinion, interest rates, including CDs, will remain very low for a long period of time. The goal is to stimulate the economy and encourage borrowing, .................................................. .....

Bingo.

[dewilson58]

I would love to see something from CDs, but I do not have my hopes up.

Keep CD's "out of your retirement portfolio".
Quotes are used because I don't mean 100% out.

Look back, since 1960, what was the average recovery time from a dip in the S&P 500?
~ two years.
So put a couple years of annual expenditures in CD's, Money Markets, ST Bonds, etc., and INVEST THE REST.

History does not promise Tomorrow, but 60 years, or 40 years, or 20 years give me a lot of comfort. :MOJE_whot::MOJE_whot:

[CoachKandSportsguy]

Watch out for those sneaky capital gains taxes if you own mutual funds. In my case I do not see the income but it did come up and bite me in the(you know the word)

I don't know about anyone else, but i love paying long term capital gains. . because I am paying a reduced rate from income, and capital gains means that I am getting wealthier, unlike having capital losses which makes me much poorer, and less able to afford nice things.

some people just like to whine about success

[Stu from NYC]

I don't know about anyone else, but i love paying long term capital gains. . because I am paying a reduced rate from income, and capital gains means that I am getting wealthier, unlike having capital losses which makes me much poorer, and less able to afford nice things.

some people just like to whine about success

To some extent it is an emotional thing. When we did our taxes and were accumulating 1099's had no idea our capital gain distributions would be as high as they were.

[Calisport]

Electric lithium golf cart is my main vehicle rather than filling up $80 of gas a week in a premium gas car.
Don't but grocery items that are now twice the price.
Buy chicken and pork in bulk at Costco
Travel less
Not watching regular TV anymore and all the lousy commercials

[CoachKandSportsguy]

To some extent it is an emotional thing. When we did our taxes and were accumulating 1099's had no idea our capital gain distributions would be as high as they were.

sure, but its negative for success, which if you examine it on an emotional level, is counter productive, and keeps you down and is a subconscious block to successful investing.

Simply stated: the difference in mentality of wealth maximization vs tax/expense minimization. wholly opposite mentalities, and you get what you subconsciously want.

to be successful in investing, you have to celebrate success, not demean it. . . its all in the psychology to keep going forward. .

My guiding statement came from T Boone Pickins, who had a $20M gain, and thought about selling, but waited to sell when the investment became eligible for long term capital gains. When that time came, the profit was gone. Taxes should seldom enter the gain selling decision. Taxes are a by product of success. . .

likewise, if you want to not pay taxes on gains, which is a tax minimization strategy, you need to pay more attention to statements, and then sell losers to offset gains prior to year end. . .

I have more examples, but I am still on my fixed income, my salary

[Bay Kid]

In my opinion, interest rates, including CDs, will remain very low for a long period of time. The goal is to stimulate the economy and encourage borrowing, at the expense of people who are frugal and just want to preserve their savings. But, I have still done extremely well by being frugal and avoiding all debt, including mortgage debt. To me, the worst advice you can give to a young person is that they need to "establish credit". My advice is to pay cash for everything and never go into debt.

Cash is king. My son needed to establish credit. He got a credit card, then paid in full every month without paying any interest. Any debt is bad. Just my opinion.

[Stu from NYC]

Cash is king. My son needed to establish credit. He got a credit card, then paid in full every month without paying any interest. Any debt is bad. Just my opinion.

Having access to credit good, not many can afford to buy a car or home with cash.

The problem is when they do not use credit responsibly.

[Michael G.]

Having access to credit good, not many can afford to buy a car or home with cash.

The problem is when they do not use credit responsibly.

99.9 % of me uses a cash back credit card, pay off every month and collect the credits.

A lot of $$$$$ is left on the table not paying with a credit card, it leaves a paper trail to check past expenses and did I mention?
"The build up of credits on Charge Cards is not taxable"

[Michael G.]

Also, how did the younger generation graduate from school, and never learn how to balance a check book??

Or can't tell time from a numbered clock, only from a digital clock?
Don't laugh, this is real.

[Stu from NYC]

Also, how did the younger generation graduate from school, and never learn how to balance a check book??

Or can't tell time from a numbered clock, only from a digital clock?
Don't laugh, this is real.

Blame the schools which also for some reason do not teach personal finance.

[MartinSE]

Also, how did the younger generation graduate from school, and never learn how to balance a check book??

Or can't tell time from a numbered clock, only from a digital clock?
Don't laugh, this is real.

My mother could not balance a checkbook. She completely did not understand how she did not have money in the account when she wrote a check, because she called the bank and asked what her balance was. The idea was that she had written another check that had not yet cleared, and the reason her account was overdrawn was the two checks finally cleared.

No amount of discussion could explain it to her. I don't think it is just the "youngsters".

But, I will readily agree our educational system has gone down the drain. It used to be that countries would send representatives here to see how ours worked. Now they laugh at us.

I disagree with the crowd that wants to throw out our education system. I just want to fire all/any ad administrators that are in it for the money. I don't have a solution, I hope someone comes up with one. Education is important. I have heard very few suggestions on how to fix it.

[jdulej]

Blame the schools which also for some reason do not teach personal finance.
Some of them don't know what a Princess Phone is either - big deal. Why should kids learn how to use dead or almost dead processes?
I have a check book. I don't think I've written a check in 6 months - it's all done through bill pay systems that keep track of in/out/pending/cleared. etc. as part of their service. I'm very aware of what I spend and mentally check things off when items clear, but haven't formally balanced anything in years.

[Babubhat]

The plummeting stock market should be more concerning to most people

[Stu from NYC]

Some of them don't know what a Princess Phone is either - big deal. Why should kids learn how to use dead or almost dead processes?
I have a check book. I don't think I've written a check in 6 months - it's all done through bill pay systems that keep track of in/out/pending/cleared. etc. as part of their service. I'm very aware of what I spend and mentally check things off when items clear, but haven't formally balanced anything in years.

Things change but how do allow our kids to graduate school and not know about how to handle their finances?

[jimbomaybe]

Bingo.


oiginally Posted by retiredguy123 View Post
In my opinion, interest rates, including CDs, will remain very low for a long period of time. The goal is to stimulate the economy and encourage borrowing, .................................................. .....
Bingo.

With inflation ramping up the only tool the Fed has to throttle back inflation is to increase interest rates (monetary policy) at the same time the government in inclined for political reasons to spend more money (fiscal policy) that added money fuels inflation. the Fed isn't screwing with anybody it's trying to put the economy back on an even keel, a balanced portfolio ,adjusted for the individual, a lifestyle based on realistic view of your assets will go a long way to avoid personnel financial disaster

[CoachKandSportsguy]

I am sick of hearing the excuse that inflation is because of Covid, supply chain shortages, or the Russian invasion of Ukraine. The biggest misleading statement is that current inflation is transitory, unless transitory means several years? All those excuses were merely triggers that set off the inevitable hyper inflation caused be irresponsibility. Because of this incredible irresponsibility, the Federal Reserve doesn’t have the tools at it’s disposal necessary to combat inflation like it did back in the early 1980’s. Not trying to be an alarmist, just a realist. An economy fueled by cheap money and debt is going to eventually crash and burn. Buckle up for a long and bumpy ride.

hyperinflation is usually preceded with a highly devalued currency, or very weak currency in a highly connected world. given the USD strength, not quite sure that hyper inflation is in the cards, given that the US has the most resilient economy in the world due to large diversified and creative environment.

granted that the stock market valuations will return to earth, which is NOT the economy, and the sh1tcos with stupid valuations versus highly negative cash flows and insolvencies should and will crash, (CVNA is one that is the poster child today) the market will correct and then inflation will drop back to 2-4%.

But CDs are repackaged T bonds with the banks taking a cut. . never invest in CDs at a bank any more. Learn to use treasury direct to buy treasury bonds, and keep them at your brokerage account, where you can sell them if desired/needed. Learn about TIPs bonds versus standard treasury bonds. . . learn about high quality dividends ETFs for diversified stock market income, SPYD, XLU for utility income, which is partially guaranteed by government statute, and REITS / Oil&Gas royalty trusts. . . no need to buy individual stocks for dividends because the individual equity risk is much higher than a diversified portfolio for simple management.

40% stocks /60% bonds has been the most ideal portfolio for the last 40 years, now its a different style investment regime, more focused on low bond interest rates and more towards very conservative equities and other equity like yielders

good luck walking in the investment jungle

[Two Bills]

Things change but how do allow our kids to graduate school and not know about how to handle their finances?

Our grandsons and granddaughters all use their phones to handle their finances.
They think wife and I are dinosaurs because we use credit cards and cash.
They are more than capable of living in the modern world, and unlike many of us old codgers, love change and new innovations.

[Jerseygirl08]

OP asked "what's your plan?"
I plan to vote! Biggest statement we can make is to vote. Inflation, cost of living, etc., was the reason the VCDD told me my amenity fee jumped $11 in March. When I moved here in 2009 I was told we would cap out at $155 for the amenity fee. So even if/when the inflation situation improves, I'm still paying at the higher rate. I'M VOTING!
As far as a "plan" to deal with inflation: I'm staying close to home, no vacations other than driving to see my kids (thank God I have a Prius), using my golf cart and e-bike more. I feel really badly for people who have to drive to work every day, especially families.

[Michael G.]

I feel really badly for people who have to drive to work every day, especially families.

I also feel the same.

Imagen with all the pickup trucks that younger people bought to drive to work?
Or the price of gas for a fleet of semi's.

With the price of eggs, imagen what bakery products will cost?

[Plinker]

hyperinflation is usually preceded with a highly devalued currency, or very weak currency in a highly connected world. given the USD strength, not quite sure that hyper inflation is in the cards, given that the US has the most resilient economy in the world due to large diversified and creative environment.

granted that the stock market valuations will return to earth, which is NOT the economy, and the sh1tcos with stupid valuations versus highly negative cash flows and insolvencies should and will crash, (CVNA is one that is the poster child today) the market will correct and then inflation will drop back to 2-4%.

But CDs are repackaged T bonds with the banks taking a cut. . never invest in CDs at a bank any more. Learn to use treasury direct to buy treasury bonds, and keep them at your brokerage account, where you can sell them if desired/needed. Learn about TIPs bonds versus standard treasury bonds. . . learn about high quality dividends ETFs for diversified stock market income, SPYD, XLU for utility income, which is partially guaranteed by government statute, and REITS / Oil&Gas royalty trusts. . . no need to buy individual stocks for dividends because the individual equity risk is much higher than a diversified portfolio for simple management.

40% stocks /60% bonds has been the most ideal portfolio for the last 40 years, now its a different style investment regime, more focused on low bond interest rates and more towards very conservative equities and other equity like yielders

good luck walking in the investment jungle


Personally, I would suggest the use of MYGA’s (multi year guaranteed annuities) vs purchasing a CD. These are CD-like investments with fixed terms, sold by insurance companies that pay FAR more than a bank CD. Currently, a 5-year MYGA pays 3.5% (not all annuities are bad). While not insured by the FDIC, they are insured by the State of Florida up to $250,000 in case of default. The interest is not taxed yearly but instead is taxed at the end of the term chosen. You can roll over to another MYGA and delay the taxes further into the future. Many offer a 10% annual withdrawal of principal each year starting the second year of the contract without penalty. I currently own several MYGA’s as a small portion of my retirement and non-retirement assets and have been very pleased compared to the paltry CD offers. Do a Google search and you can get current rates. No, I am in no way affiliated with the insurance industry. I just refuse to accept the low rates offered by banks.

[retiredguy123]

oiginally Posted by retiredguy123 View Post
In my opinion, interest rates, including CDs, will remain very low for a long period of time. The goal is to stimulate the economy and encourage borrowing, .................................................. .....
Bingo.

With inflation ramping up the only tool the Fed has to throttle back inflation is to increase interest rates (monetary policy) at the same time the government in inclined for political reasons to spend more money (fiscal policy) that added money fuels inflation. the Fed isn't screwing with anybody it's trying to put the economy back on an even keel, a balanced portfolio ,adjusted for the individual, a lifestyle based on realistic view of your assets will go a long way to avoid personnel financial disaster
The current interest rate on my Vanguard money market account is 0.24 percent.