24 Jun “The thought of retirement right now is really scary.”
Photo by christopher lemercier on Unsplash
Recently, CNN released a heartbreaking story titled, “Retirees becoming homeless at higher rate than other age groups amidst inflation.” (https://www.cnn.com/videos/business/2022/06/10/inflation-seniors-rent-health-homelessness-pkg-cohen-newday-ldn-vpx.cnn/video/playlists/business-news/)
It’s a terrible situation though probably not surprising to anyone given how much the general cost of living has increased. 8.5% inflation? Uh, no. Have you seen $1 items now priced at $1.09? I haven’t. A simple loaf of white bread that used to be .95 in my area bumped up to $1.25 and then bumped up again to $1.50. That doesn’t sound like 8.5% inflation to me.
The blurb for the news report reads:
“Inflation is outpacing the cost of living for millions of seniors as food, gas, rent and healthcare costs rise. Some face the depletion of retirement funds while others are being pushed towards homelessness.”
One of the interviewees, Cynthia Tilford, remarks that she went back to work part-time because “the thought of retirement right now is really scary.” I can only imagine it would be.
In the same line-up of videos, we see, “Strategist: We’re at peak pessimism (and why that’s a good thing)” (https://www.cnn.com/videos/business/2022/06/08/bear-market-gas-prices-stocks-recession-pessimism-mn-orig.cnn/video/playlists/business-news/)
So… people can’t retire and elderly people on fixed incomes might be homeless and people are pessimistic, but hey: let’s look at why that might be good news. 🤦🏻♀️
Without a doubt, there are people who are primed and ready to buy during a recession: stocks, houses, land, cars, etc. But a lot of people will not be in that position and some who posture on the internet that they are high rollers ready to “buy the dip” will be lucky to buy hot dogs and ramen noodles at the store. I’m not trying to be tacky – I’m trying to be real.
Last Wednesday, LinkedIn published: “Boomers are exhausting their 401(k)s,” which you can find here: https://www.linkedin.com/news/story/boomers-are-exhausting-their-401ks-5367116/
In the blurb, editor Alessandra Riemer writes:
“Many younger baby boomers are at risk of draining their 401(k) plans by age 85. That’s according to a new report from the Center for Retirement Research at Boston College, which looked at retirees with traditional pensions that pay out a fixed amount each month versus ones with 401(k)s. While many of those with pensions saw their savings grow, retirees with 401(k)s depleted their funds faster than expected. That’s possibly because people aren’t clear how much they need to save for retirement and need to use their 401(k)s for day-to-day expenses.”
This is not the time to panic and be Chicken Little saying that the sky is falling or that zombies will be roaming the streets looking for brains to eat. But it’s also not the time IMO to ignore reality either.
Look before you leap. If you’re considering retirement, please talk to a professional financial planner or advisor who can assist you in the decision.
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