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Members on a fixed income/inflation woes

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Members on a fixed income/inflation woes

Old 01-08-2016, 12:37 PM
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Default Members on a fixed income/inflation woes

Looking to ask members that are on a fixed income how much inflation or even hyper-inflation would effect your quality of life.

Inflation in this country has been relatively low by world wide standards, with the stock market teetering a pending election and mounting debt we just don't know when the crap will hit the fan. People that are retired or otherwise on a fixed income have no means to increase earnings and that can spell trouble.

How concerned are you? Even if your about to retire you may have some thoughts.
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Old 01-08-2016, 12:42 PM
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Government stated inflation has been pretty low...real inflation (ex energy) has been pretty crazy, really


Fixed income peeps have been getting murdered...as well as the "savers" due to the policies of the gov't banking complex
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Old 01-08-2016, 01:38 PM
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Originally Posted by schoolsout1 View Post
Government stated inflation has been pretty low...real inflation (ex energy) has been pretty crazy, really


Fixed income peeps have been getting murdered...as well as the "savers" due to the policies of the gov't banking complex
I agree on the "reported" inflation numbers, but we haven't ad inflation like back in the 70's or in other countries where inflation at times is 25, 50, 100% or more.
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Old 01-08-2016, 01:44 PM
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High inflation would be met with higher interest and cost of living increases. This would increase income. Also, it is human nature to adjust to inflation. For example, if gas hits $4 again, we'll drive less. If beef hits $7/lb, we'll eat less beef. If a Starbucks plain coffee hits $5, we're all screwed.
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Old 01-08-2016, 01:56 PM
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There are some of us that are screwed. I have been retired for 15 years. I receive $100,000.00 a year in retirement. I received that 15 years ago and I receive that amount today and I will receive that amount 15 years from now.

Say you have 3% inflation. That is my income has shrunk 45% (15x3=45). Say I live for another 15 years..............not good....
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Old 01-08-2016, 01:58 PM
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Originally Posted by Picaroon View Post
There are some of us that are screwed. I have been retired for 15 years. I receive $100,000.00 a year in retirement. I received that 15 years ago and I receive that amount today and I will receive that amount 15 years from now.

Say you have 3% inflation. That is my income has shrunk 45% (15x3=45). Say I live for another 15 years..............not good....
Question - has your lifestyle really changed much over the years ? Just curious
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Old 01-08-2016, 02:37 PM
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Most wage earners are on a fixed income. If you're a mid level worker making 60k a year it's not like you just go double your income by working twice as hard... You need a new job that pays more....not always easy in some fields or for people that are not mobile.
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Old 01-08-2016, 03:40 PM
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Default Members on a fixed income . . .

Been retired for 1.5 years.

Key to living on a fixed income is a cash budget system and ZERO debt.

Budget all key expenses, set aside money in envelopes for the entire month. When you run out in ine envelope, you can no longer spend in that category. Been fine tuning system for three years. Getting better each year. (I have 18 expense categories).

So far, have enough set aside to cover expenses for three years with some "juggling".
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Old 01-08-2016, 04:12 PM
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Originally Posted by Danny33486 View Post
Most wage earners are on a fixed income. If you're a mid level worker making 60k a year it's not like you just go double your income by working twice as hard... You need a new job that pays more....not always easy in some fields or for people that are not mobile.
If your a worker, and work the standard 40 hr work week you can get a part time job or take on some O/T adding an additional $200 or more to your income each week. Not ideal but you have the option to do so. If retired and say 75 it's pretty hard to start working again, even at 10 hrs. per week.
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Old 01-08-2016, 04:38 PM
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Originally Posted by Picaroon View Post
I receive $100,000.00 a year in retirement................Say I live for another 15 years..............not good....
Good grief! Your glass is really half full NOT half empty.
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Old 01-08-2016, 04:43 PM
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Originally Posted by YFMF View Post

If your a worker, and work the standard 40 hr work week you can get a part time job or take on some O/T adding an additional $200 or more to your income each week. Not ideal but you have the option to do so. If retired and say 75 it's pretty hard to start working again, even at 10 hrs. per week.
So can an old person. They bag groceries, work at delis all over the place. I live in a retirement town. The person serving me right now is old AF.
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Old 01-08-2016, 05:09 PM
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All I can say is, buy hard assets whenever you can afford it.
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Old 01-08-2016, 05:35 PM
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Originally Posted by Picaroon View Post
There are some of us that are screwed. I have been retired for 15 years. I receive $100,000.00 a year in retirement. I received that 15 years ago and I receive that amount today and I will receive that amount 15 years from now.

Say you have 3% inflation. That is my income has shrunk 45% (15x3=45). Say I live for another 15 years..............not good....
Curious as to what you did for a living? Retired 15 years and getting that kind of money back in 2000?
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Old 01-08-2016, 07:46 PM
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If you have no assets other than a pension, you should be banking a portion of that fixed pension so that you will have additional income down the road. Most retirees that plan ahead have enough assets to generate an income stream that increases with inflation. Too bad the majority of people have no clue what is needed and most have saved nothing. They'll be coming after your assets in 10 or 20 years...
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Old 01-08-2016, 07:51 PM
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If I had a $100K a year, it would be like winning the lottery. But, I've made major adjustments to my lifestyle now compared to when I worked.

Inflation affects some people different than others. I haven't bought a new vehicle in 14 years. I have 2 trucks, one I drove 5,200 miles and the other a little over 4,000 miles last year, so the cost of transportation doesn't affect me nearly as much as it used to.

I don't have a mortgage, don't drink, or smoke or have expensive hobbies. Even food is simple, seldom go out to dinner. The cost of having fun or "entertainment" is much (1/10th) of what it was when I was younger.

Medical cost and the ever increasing cost (inflation) of trying to stay alive is what hurts the budget more than anything else. It's hard to cut back or do without necessary medications or doctor appointments. However, I have cut back on meds by taking 3 a day of something prescribed for 4 a day. I used to see the dentist 4 X's a year for cleanings, now it's twice a year.

It used to be that I always felt I could work a little harder if need be, this year there isn't any increase in Medicare benefits while the healthcare premium increased by 40% with less benefits. I used to spend more on vacations and entertainment than what my entire annual income is now.

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Old 01-08-2016, 08:00 PM
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Great thread!
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Old 01-09-2016, 09:42 AM
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This is why we pursue a strategy of focusing on stocks in companies that are investor friendly. Many companies have long track records of increasing dividends. A basket of individual stocks or a mutual fund that is focused on dividends, typically will see total annual dividend increases of 5-7%.

While not every company raises the dividend every year, the long term increases can be dramatic.

By way of example, BA did not raise the dividend for 2009-2011. However, since 2013 it raised the dividend from $1.94 to $2.92 to $3.64 to $4.36. Over the last 30 years BA has on average raised the dividend 11%/year. It is not alone.

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Old 01-09-2016, 09:50 AM
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I never understood the "fixed income" thing. I work, my wife works. We get salaries.

It's not like we can just print up more money if we want more income. In fact, I would argue
that we're more at risk than some with fixed benefits such as SS, pensions, and 401K income.
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Old 01-09-2016, 10:06 AM
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Having watch my parents retire in the Jimmy Carter years... and see the inflation rate hit 12% (with higher peaks) they got along just fine on a one earner fixed income.

Why? well like another poster(s) said if beef was expensive they ate chicken, if chicken was expensive they ate hot dogs, if the electric bill, gasoline, phone went higher they used less. Pretty simple actually. Here's the key from my observation... 3 month CD's were paying %20+ !! They actually made money and were able to save a bunch and do some travelin' after Ronald Reagan got in.

Of course they struggled with prices like everyone else but they were "depression babies" and knew how to be minimalists. I could do it... my wife, nope, the kids? maybe 1 of 4, (he was a Marine).

Other observations they didn't own a boat, or more than one car, didn't go to the doctor much, went out for "supper" once a week. Dad fished from a river bank, pier or bridge, hunted occasionally, mom grew things veggies to eat, and went to market everyday or had stuff delivered.

They always prayed.

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Old 01-09-2016, 10:27 AM
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Cost of living increases for SS, and the like, are based upon gov't stats of overall inflation, largely swayed by the cost of gas. We retired, fixed incomers are more than likely to see the effects of medical costs, medicines and food - the costs of which are all out the roof. The cost of gas is way down and really distorts the real effect of inflation on our lives. Hence, no cost of living raise - again.
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