Inflation Eats Away Your Retirement Income
Many seniors are being put into poverty by rising inflation costs. Inflation is destroying the buying power of old age pensioners on fixed incomes. How Inflation can Eat Away your retirement pension Income is quite alarming for seniors. Many seniors in Canada for example are living paycheck to paycheck every month and when prices start rising it can be devastating. Especially in the cold winter months as energy prices soar to higher and higher levels. Do you eat or do you stay warm? Elderly pensioners living just on their old age pensions are making hard choices and it’s only getting worse.
Housing prices in Canada are completely out of control and their is no end in site for the fix. Rents are going up at a pace never seen before. How are old age pensioners living on fixed incomes going to keep up? This question needs to be answered by our leaders. There is no time to waste as the housing crisis emergency is getting worse by the day. Prices of housing in Wester Canada are going up monthly both for buyers and renters. Imagine a room in a basement now renting for close to a thousand dollars! This problem has no solution in sight and a full blown social disaster is just around the corner.
Another spike in housing prices is expected in 2022 as inventory dwindles and immigration picks up. Over 400,000 immigrants are expected to arrive in Canada in 2022 and even more in 2023. Now I am not putting down the immigrants as Canada needs them to spur economic growth. My only concern is where the hell are these people going to live? Are we going to have tent cities everywhere? It sure looks like it unless a solution is found and found quickly.
Inflation devastates retirement years
Housing price surges or as I like to call it inflation can devastate your retirement years if you are not prepared. Of course if you are an old age pensioner with a chunk of real estate it could be great except for one fact! Your taxes my friends are about to double and even triple over the coming years due to house price inflation. Imagine your taxes going up double or even triple over the next 5 years. Yikes! Now if you don’t own property and are a senior renter you could be alright if you stay put and don’t move. Landlords can’t double or triple your rent at a whim because their are laws. What happens if your move? Well you could be screwed because their will be no place to go. Hundreds of people will be lined up trying to get the same unit and prices will explode. Hope you got some dough for a tent.
Now don’t get me wrong. I am not trying to be a fear monger. No one can predict the future and maybe the government will come along and build thousands of affordable rental units. One other option is to give you a big raise in your old age pension so you will be able to have a roof over your head. Being a senior myself I can honestly say that housing was never a big problem in Canada. There were always affordable places to call home. Those days are long gone and the future doesn’t look to bright as inventory is housing keeps dwindling. It will take many years to bring things back into balance and in the meantime their will be more and more homeless living on the streets I am afraid.
How Much Money Can Retirees Lose
Retirees can lose thousands of dollars over a 20 year span even at low inflation. As inflation rises pensions will even lose more as the income will fall behind. What this will do is diminish your ability year after year to keep up with prices and put you deeper into poverty. Action will be needed as no one is going to step into to save your. Especially the governments as interest rates rise. They will need to do this in order to comb at the soaring inflation and their debt payments will rise. Imagine governments running out of money! My God what will they do? They will print more and more and more of it causing even more and higher inflation in the coming years.
As retirees lose purchasing power due to fixed incomes they will be driven more and more into despair unless one takes the proper precautions. There are ways to actually prosper from inflation but one must act before it is too late! Starting a Home Business is always a good option. Join my newsletter up above for easy affordable home businesses for seniors sent right to your email box. Below are a few tips you can do now if you are able to prevent the oncoming inflation storm that is about to erupt.
What Retirees Can Do to Curb Inflation’s Side Effects
While seniors can’t directly affect the inflation rate, there are ways to minimize the shadow it casts over their retirement.
Reducing housing costs, for instance, is a step in the right direction. Trading in a larger home for a smaller one, even if the mortgage is paid off, reduces the monthly outflow for property taxes, utilities, homeowners insurance, and maintenance.
Another smart move is adding investments to your portfolio that are likely to increase in value as inflation rises. A real estate investment trust (REIT) or energy sector stocks, for example, are better positioned to see their value grow in tandem with the inflation rate.
Just remember to balance stock investments with more conservative options, such as bonds, which are more predictable and tend to offer stable returns.
The Bottom Line
Inflation can be a retirement killer, but it doesn’t have to be for seniors who take the time to develop a plan for beating it. Reducing spending, creating a realistic retirement budget, and leveraging investments can all help to soften the blow inflation may give to long-term savings.