Surviving on a Fixed Income by Bill Storie

Surviving on a Fixed Income by Bill Storie

When did you first hear the word “inflation”?

I’m sure it wasn’t last year and maybe not ten years ago, but there would have been a time in your life when you did hear the word and perhaps even wondered what it meant.

In fact, I might even suggest that when you did hear it for the first time you ignored it, largely because it didn’t affect you. So why would you research it. It was something other people seemed to talk about, but it didn’t affect you.

The main reason you either didn’t understand it or didn’t pay attention to it was simply because you were in employment and receiving a weekly/monthly wage. Some months you may have struggled to pay your bills more than other months, but overall you did “get by”.

Perhaps a new job brought more income to you, or you got a pay raise through hard work, or some type of bonus. In any event you survived your financial obligations. In other words, even if you had to temporarily borrow from your bank or your credit card, you made it through.

But then you retired.

You have your pension – state pension and/or employment pension. You may have some investment or rental income. But those incomes are most likely fixed. They may vary slightly especially through more dividend income this quarter or even a pension increase (lucky you!). But broadly speaking what you got last month is what you will get this month.

In fact, what you get this month is what you got last month, last year. No material change.

Now suddenly the word “inflation” enters your life.

Now you admit that you had heard the word many years ago, but truth be told it didn’t apply to you – or at least it may have affected you, but you ignored it. Now times have changed.

Have your expenses remained stagnant year over year?

No need to answer that question. They have increased, and they will continue to increase. Is your grocery bill different from same time last year? No need to answer that question either.

So, the squeeze is real. The gap between your current income and your current expenses is getting shorter and shorter. But if your income is fixed and will not move upwards, what do you do?

Stop eating?

Stop prescriptions?

Give up the car?

Cut back on electricity usage?

None of them seem appealing, not at all. But do you have any idea how many people in your community face those tough decisions every month? More than you think. Much more.

The problem is that as inflation has crept forwards your buying power has slid backwards.

Inflation is slowly eating away at your lifestyle and to be brutally honest, there isn’t much you can do about it. Yet there are a few things you can do to lower your outgoings.

  • Spend time at the grocery store looking for adequately good food, but at a lower price. No need to buy big brands.
  • Watch for “seniors day”
  • Turn off lights around the house when you don’t need them.
  • Ask your doctor or pharmacist for generic prescriptions
  • Use your car wisely – if you can walk there, do it (exercise benefit too).
  • Check all your subscriptions and see if you really need them
  • Get the family to come visit you not the other way around.
  • If you eat out, do so at times when they have “early bird specials”
  • Be very clear about continuing life insurance payments and the benefits you have gathered
  • Cancel unused subscriptions and read online for free

Individually these may not lower your expenses much, but collectively they might and never forget the goal – you want to live a happy retirement with as little worry about running out of money. Don’t deny yourself as such, but you intend to live a long time – make sure inflation doesn’t prevent you.

By Bill Storie

Bill Storie and Robin Trimingham are the co-founders of The Olderhood Group Ltd., an online learning company with + 100,000 global followers in over 100 countries. The Leaders in Action video series, produced by Olderhood Productions International (part of The Olderhood Group) features short video interviews with recognized Leaders in multi-national companies, global organizations, and renowned experts in various locations around the world including London, Los Angeles, Mumbai, Singapore, New Delhi, and many others. The Series is published on Olderhood’s social media pages, The Royal Gazette, LinkedIn and through its several Partnership Networks globally to millions of viewers around the world. The Olderhood Group provides life transition, financial literacy and retirement lifestyle planning, education, and training for corporations in the form of videos, podcasts and webinars. The consulting practice focuses on helping companies augment their employee benefits programs, and their customer outreach initiatives, by seamlessly integrating customized workshops, in-house training, and online learning opportunities into their existing platforms.