8 Strategies That Can Help Older Adults Cope with Inflation

Retirement seems like it should be a relaxing and happy time, yet many seniors find themselves facing considerable financial stress. This isn’t surprising, as seniors are often on a fixed income, while inflation gradually increases the cost of living.

Even older adults with savings and monthly Social Security checks are struggling.

The issue is even more significant for seniors with extra expenses, like those who are caring for a grandchild or those with a chronic medical condition.

If money is consistently tight, you might end up with less of the things you need, like healthy food, new shoes, or regular social outings. Losing out on the things you need certainly isn’t good for you. Then there’s the fact that stress itself can compromise your health.

This is why financial management strategies are so powerful. The right approaches can give you more money to play with, while reducing your stress at the same time.

Our Top Strategies for Seniors

Adjust Your Budget

Budgeting is a crucial strategy for money management – and it’s never too late to learn. The idea is to record your income and expenses in a way that lets you put money aside for bills and see the balance of your ingoings and outgoings.

By budgeting, you can adjust your spending to match the amount you can actually afford, instead of living week to week.

Tracking spending is a crucial part of budgeting. Doing so helps you identify where you are spending money and potential areas for decreasing spending.

Once you have an idea of your spending, you can start to cut out unnecessary costs, like dining out, subscriptions, and luxury food items. If doing so feels too overwhelming, just start with small changes and go from there.

Explore Assistance Programs

Many programs provide financial assistance in some form or another, including Medicaid, Supplemental Security Income (SSI), and Veterans programs. The programs have eligibility criteria and take time to apply for, so some patience is needed. Still, once everything is organized, the financial assistance can be incredibly helpful.

You’re not limited to financial assistance either.

Other programs may help in different areas, like the Supplemental Nutrition Assistance Program (SNAP), food banks, and Meals on Wheels, which all help with food costs. Reducing the amount you spend on food frees up resources for other needs. That’s almost as good as getting money directly.

Even programs that just offer discounts for important items, like medications, can be powerful. Remember, every little saving counts.

Review Your Bills

It’s important to keep a close eye on your bills. Keep an eye on the amounts that come out each week and each month. Make sure these are what you expect and that you’re still using the services you’re paying for.

You can start to be a bit critical here too. Think about which services you actually need. What ones can you cut out?

If you’re uncertain, why not experiment? Try getting rid of a service for a month and see how much you miss it. This is a great way to see whether something is actually worth the money you’re paying.

It’s also worth checking in with companies regularly. See if they offer any new discounts or better value plans. Most companies won’t inform you about such changes – you’ll need to do the legwork yourself.

Check competing companies too. You may save money by switching to a different company. Some places even offer incentives for making the switch.

Invest Wisely

If you have some money in savings, then investment may be a wise plan – giving you more money for the future. However, it’s important to be cautious here and look for the right approaches.

Inflation-protected securities are one possible angle to consider. However, it’s also important to diversify your investments across different asset types. Doing so reduces your risk and helps protect your assets.

Look for a reputable financial advisor to assist you in this process. A good advisor will be able to help you choose the best types of investments for your needs and level of risk tolerance.

Consider Earning Money

Being retired doesn’t have to mean you stop working completely.

Some seniors pick up part-time jobs, often ones that aren’t too intense. These jobs provide a little extra income, while also helping with social connection. For some, working part-time is also easier than going straight from full-time employment to retirement.

You can also earn outside of a regular job.

Some people do so by leveraging their hobbies, like by making jewelry or by selling baking. You might also consider services, like offering piano lessons or even babysitting.

Selling products or services like this allows you to earn on your own schedule and make decisions based on your ability and energy levels. Even a little extra money could help you manage inflation much better.

Switch to High Yield Savings Accounts

Planning to safe keep your earnings in a bank account? While regular bank accounts may help in reducing unnecessary purchases, the rising inflation rates can reduce the value of your savings over time.

During this period, it may be better to keep your savings in a bank account that offers higher interest rates. By switching to a high-yield savings account, your interest will increase much faster than it would otherwise. Unlike some investment products, you can easily access your money in case you need to tap into your savings.

Delay Claiming Social Security

If eligible, you may be able to delay claiming Social Security benefits until some time after you reach full retirement age. Doing so allows you to earn for longer and also means you’ll receive more when you do begin Social Security.

Of course, this strategy is only relevant if you haven’t already claimed your benefits and are able to continue working.

Protect Your Pension

Pensions are supposed to provide financial stability for retirees, but what happens when inflation disrupts your supposed security?

Due to the rapid increase in the cost of living, the SSA has provided a 5.9% increase for Social Security benefits and SSI payments since December 2021. While these pension increases could mean a great deal for some, Fourth Point Wealth’s Chris Janeway points out that fixed income is not enough, considering that food and travel costs are rising rapidly. Recognizing this problem, financial experts recommend that retirees protect their pension by converting it into an annuity or purchasing financial products that can beat inflation rates.

However, it’s still important to seek advice before making such a decision, as individual needs and situations vary.

Final Thoughts

Inflation can make your retirement a little unpredictable, but you can achieve greater financial stability using making smart money strategies. So, if you want more assistance in your retirement, check out our other resources at Kapok. Our articles cover challenges and cultural disparities that you may experience during this period, so that you can live a healthier and happier life.