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Getty Images/Jeffrey Coolidge Kevin Linehan, a 68-year-old retiree from Fitchburg, Massachusetts, is concerned about rising prices. Linehan quit the Postal Service early after suffering a heart attack at the age of 44, choosing for a reduced disability retirement pension. “It wasn’t the finest financial decision,” he said. “However, it appeared at the moment that my life was more essential than the job.” Despite the challenges of living on a “thin income,” Linehan, an Air Force veteran, was able to acquire government-subsidized housing for less than $500 per month through Veterans Affairs. The rent is very consistent from year to year, with annual adjustments based on his salary. Personal Finance has more: How to use muni bonds to create an inflation strategy How does climate change affect retiree portfolios? Here’s a way to keep your portfolio safe from inflation. However, Linehan has witnessed a rise in the cost of necessities such as food and gasoline in recent months. He has seen an increase in the price of grocery basics such as bread and milk. Gas prices have also been steadily rising, reducing his ability to travel. “It’s like now that [the pandemic] is finished, everyone’s raising prices,” he remarked. Linehan, who receives monthly assistance from the Supplemental Nutrition Assistance Program, or SNAP, has been particularly concerned about rising food expenses. SNAP benefits increased during the epidemic, but he expects them to return to $16 per month after the state’s Covid-19 aid runs out. “I’m not sure how long [the additional benefits] will last, but it’s really helped me out,” he said. According to the Labor Department, the May consumer price index, which measures the cost of food, housing, fuel, utilities, and other items, increased by 5% from the previous year. Food costs have risen by 2.2 percent in the last year, while fuel prices have risen by 56.2 percent, rebounding from pandemic lows. While the Federal Reserve has stated that these price rises are just temporary, pensioners like Linehan are concerned that costs will continue to rise. Inflation is a quiet assassin. President of Seaside Wealth Management, Brad Lineberger According to a research released by the Federal Reserve Bank of New York, Americans’ estimates for year-ahead inflation rose to 4% in May, marking the seventh consecutive monthly increase. “Inflation is the silent killer,” said Brad Lineberger, owner of Seaside Wealth Management in Carlsbad, California, a certified financial adviser. “It can erode purchasing power to the point where someone wakes up and realizes they can no longer afford to live the lifestyle they once lived.” For all retirees, this is not an issue. Many retirees are concerned about rising prices, but others are unaffected. “The transitory inflation flare-ups have had no impact on our clients,” said Jon Ulin, CFP and CEO of Ulin & Co. Wealth Management in Boca Raton, Florida. Diane Benson, 69, and Al Sapienza, 70, both of Seattle, are among the retirees who have escaped inflation’s wrath. The couple relocated to Seattle in 2019 after selling their house in the Boston suburbs, eager to be closer to their 40-year-old son, David. Sapienza left his 25-year position with the Social Security Administration early to pursue higher studies before retiring full-time in 2015. Diane Benson and Al Sapienza Diane Benson is the author of this article. Benson left her job as a social worker in 2007 to spend more time with her mother, who was ill. She said that the loss of income was not a problem for her. Sapienza explained, “We’ve never really stretched ourselves beyond what we could afford.” “In fact, we most likely lived much below it. ” While they’ve observed a rise in prices, he claims that inflation hasn’t had a significant influence on their budget. Adjustments in living costs For people on a fixed income, inflation can be difficult to deal with. Benson and Sapienza, on the other hand, both receive benefits from a pension and Social Security, as well as cost-of-living increases, according to Sapienza. According to The Senior Citizens League, while Social Security payment changes have typically been modest, rising prices have pushed up forecasts for the 2022 Social Security cost-of-living adjustment to 5.3 percent, the largest increase since 2009. “This year, consumers will see prices rise, and their benefits will not rise immediately to compensate,” said Alicia Munnell, head of Boston College’s Center for Retirement Research. “But it will rise in 2022,” she added. Benson and Sapienza both have unused retirement accounts, with plans to start withdrawing funds at the age of 72. Pensions, retirement funds, and Social Security, the so-called “three-legged stool” of retirement income, have grown less frequent among seniors. According to the National Institute on Retirement Security, only 6.8% of older Americans receive income from all three sources. What can be done to counteract inflation? While some seniors may be concerned about rising prices, Jeffrey Tomaneng, CFP and wealth advisor with Asset Management Resources in Hyannis, Massachusetts, says there are ways to mitigate the effects. He urges clients, for example, to assess their portfolios and consider transferring a percentage of their assets to more aggressive investments, he added. Some of our clients’ parents are now in their 90s and have ran out of money. Tomaneng remarked that a bit more portfolio risk 20 or 30 years ago would have enhanced their status now. Lineberger added, “We try to remind customers that they can’t get too conservative in their asset allocation too quickly since they need stocks to help battle inflation.” Spend less money Kevin P. Linehan, Ph.D. Kevin P. Linehan provided this image. For retirees without a nest egg, inflation can be depressing, but there may be inventive methods to mitigate the consequences. According to Tomaneng, they may contemplate migrating or exploring communal living settings with family or friends. However, depending on the market, people intending to downsize and buy elsewhere may prefer to wait, according to Ulin. In South Florida, for example, the inflow of transplants and the restricted amount of houses has resulted in a 10% to 20% increase in property prices. Of course, not everyone has the financial means or the inclination to leave their family. After his wife died, Linehan returned to Massachusetts after several years in lower-cost locales. He now lives close to his four grandchildren and sons, feeling relieved that he has family nearby in the event of an emergency. Despite increased prices and SNAP benefit decreases, he is optimistic that he will be able to make ends meet. “For someone who doesn’t make a lot of money every month,” he remarked, “I’m doing okay.”/nRead More

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