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According to a recent survey by The Senior Citizens League, a non-partisan group of older adults, for many older Americans, record high prices threaten their financial security just as they are approaching or living in retirement.
The survey was conducted online in the first quarter and included 3,056 participants, 96% of whom rely on Social Security as a source of income.
Elderly people spend savings, borrow
The study found that half of respondents aged 55 and over had spent emergency savings in the past 12 months due to high inflation.
Meanwhile, 47% visited food pantries or applied for Supplemental Food Assistance Program or SNAP benefits. What’s more, 43% are in consumer credit card debt for more than 90 days.
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Other common steps survey respondents have taken include applying for help with home heating or cooling costs, depleting a retirement or savings account, using more retirement savings than usual, or applying for a Medicare savings program or additional assistance. Medicare for assistance with medical or prescription drug costs.
Credit card interest rates could rise after the Federal Reserve raised interest rates by 0.75 percentage points on Wednesday, the biggest increase in 28 years. This may not help older Americans who have gone into debt to cope with higher prices.
“When people experience this type of inflation, those with less savings tend to be forced to take on more debt to pay their bills for the month,” said Mary Johnson, social security and Medicare policy analyst at The Senior. Citizens League.
Social Security and Medicare changes can help
In 2022, Social Security recipients saw the largest increase in their benefits in about 40 years, adjusted for a living wage by 5.9%.
The League of Seniors has calculated that next year COLA could be 8.6% based on the latest CPI data.
How high Medicare Part B premiums are for 2023 will also matter to beneficiaries who watch their wallets. This year, the standard monthly premium is $170.10, up 14.5% from the previous year, driven in large part by the potential cost of Aduhelm’s Alzheimer’s drug coverage.
However, the cost of treating Alzheimer’s has since been halved, prompting government officials to indicate they could adjust next year’s Medicare Part B premium increase to make up for it.
One way older Americans can try to cope with higher prices could be to keep working, Johnson said.
BUT recent retirement survey from Schroders found that 69% of working Americans plan to work in retirement. The main reason was to cover basic living expenses, as indicated by 56% of the respondents; followed by a desire to stay busy, 51%; and maintain activity and good health – 49%.