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7 in 10 Seniors Worried About Current Inflation’s Impact on Savings

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If you are a senior citizen and you are worried about the recent spike in inflation impacting your retirement savings, you are not alone.

As rising inflation continues to affect the U.S. economy, senior citizens are growing more and more concerned that the high price levels will erode their retirement savings.

Global Atlantic Financial Group is a life insurance and annuity company who surveyed over 1,000 investors between the ages of 59 to 75 with more than $250,000 in assets. The Group found that 71% of respondents indicated that they believe rising inflation will negatively impact their retirement savings. 46% of those with fixed income investments worry that low interest rates will impact their retirement income. 

The survey found that also high among retirement age investorsconcerns is the negative impact Covid-19 could have on their money. The results showed 73% are worried about how a resurgence of the virus would affect the stock market.

The study also found that retirement age investors are now more willing to look to financial professionals for help. While 64% said they are more open to financial advice than they were before the pandemic, 51% who work with financial professionals said they have discussed the low interest rate environment with them.

Paula Nelson, a Global Atlantic executive, said, Those on the cusp of retirement are paying close attention to economic issues such as inflation and low interest rates, and they recognize that it might be a good time to revisit their retirement strategies.

Year-over-year inflation rose to 5.4% in September, the highest it has been in since January 1991. And the result of this was that the Social Security Administration increased the cost-of-living adjustment to 5.9%. This is a decision that was meant to help 64 million Social Security recipients and 8 million Supplemental Security Income beneficiaries deal with higher price levels.

These kinds of adjustments are in line with rates that were seen early in the Carter administration. It was up to 5.9% in 1977 and 6.5% in 1978. The rate surged to 9.9% in 1979 and 14.3% in 1980. But the adjustment declined once President Ronald Reagan and Federal Reserve Chair Paul Volcker implemented stringent measures to decrease and stabilize inflation.

In the face of high levels of worry among retirees, The Biden Administration Chief of Staff, Ron Klain, basically gave a nod to the notion that high inflation is merely a high-class problem.

This notion was advanced by Jason Furman, the former chair of the Obama administrations Council of Economic Advisers. He tweeted: Most of the economic problems were facing (inflation, supply chains, etc.) are high-class problems. We wouldnt have had them if the unemployment rate was still 10 percent. We would instead have had a much worse problem.

Ron Klein retweeted the post with the caption, This.

But most are not in agreement with Klain and Furmans assessment. The truth is that inflation diminishes wealth and that is especially true for the working-class Americans. They hold a greater share of their assets in cash than wealthier counterparts.

In fact, federal data confirms that the average Americans real wage is on the decline due to inflation. The Bureau of Labor Statistics reported recently that the average hourly earnings in the United States rose by 3.6% between June 2020 and June 2021. But when you factor in inflation using the Consumer Price Index, spending rose by 5.3% over the same period. Therefore, real average hourly earnings diminished by 1.7%.

And Federal Reserve officials are worried that the present inflation could last longer than it was previous anticipated. This is according to minutes from a recent meeting released this week.