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OK, it’s not pretty out there. You’re living your life. Everything is expensive. Talk about sticker shock. When filling up your car is enough to make you fall over at the pump—never mind the price of everything else in your life—inflation is real. Forget the 7.5% headline inflation. That doesn’t do justice to what you and I are paying in our own lives. In my conversations with you, for example, you’re telling me that the cost for shipping containers is up 300%, to be kind, and as much as 500% when all costs are included—not 7.5%. And yet the Biden admin talks to you like it’s transitory. It’s not transitory when you keep paying higher prices for months on end.
Retirees are worried, and rightly so. How can they fight inflation when interest rates are nailed to the floor and the prospects of higher rates—you know, ones you can sink your teeth, or savings, into—are waaaay off somewhere in the distance? Growth stocks have been hammered, and money is leaving bond funds to go into value stocks. That is not a Survival Guy strategy. I love dividend-paying stocks but not with my bond money. Investors need to wake up and invest their savings as if each dollar is the last one they ever earn. Period. They need to realize we’re living in a one-percent world.
Take a look at this article below, and you quickly realize the lack of retirement savings for most retirees. You have to take your savings seriously. There’s no other way around it. And you can’t hope the markets will do something for you. It’s about keeping what you’ve made.
Action Line: There’s a way forward for you. I want you to have the retirement you deserve. But it’s going to take some hard truths. I want you to get to know me here at Your Survival Guy, so if we do speak, you’ll have a feeling for who I am. We’re in this together. But only if you’re serious.
NPR’s Chris Arnold reports:
Susan DeFrance retired two years ago when the truck manufacturing company she worked for phased out her division.
“I was pushed into my retirement,” says DeFrance, who’s 66. “So it’s really very scary.”
She’s nervous because she felt just on the edge of having squirreled away enough in her life savings. And now, she’s afraid that money isn’t going to last.
“I am very worried about that,” she says. “Milk has gone up like $2 a gallon … and gasoline.”
To cut expenses, DeFrance sold her house in New Jersey and moved to a mobile home park in Delaware, where the taxes are almost nothing. Her one modest splurge in retirement: a used power boat. The park is on a canal near the ocean and has a dock.
“I bought the boat outright,” she says. “To make sure my boys come and visit me.”
DeFrance is trying to live much more cheaply than she used to, on just $40,000 a year. But even so, she’s anxious about outliving her savings. Her eldest son says if it came to it, she could squeeze in with his family.
“They’re willing to make these sacrifices for me that I’m not willing to accept,” she says. “So hopefully, you know, I won’t last to be 100 years old.” She jokes that maybe “a nice boating accident” will take care of the problem and laughs.
But she says she really does worry. What if inflation keeps going crazy, interest rates go way up, the stock market crashes and wipes out more of her savings?
“I have a hard time getting to sleep sometimes because all of those things run through my head,” DeFrance says.
Many retirees are nervous about the same thing. Inflation is higher than it has been since the 1980s. The higher inflation rate could come back down pretty quickly or be something longer term and more damaging.
E.J. Smith - Your Survival Guy
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