statistics

8 Money Tips for Seniors Suffering from Inflation

Why is this year different from all other years for seniors? Inflation. The latest numbers show a whopping inflation rate that’s the highest since 1982.  This means that everything you buy will be more expensive.  You see this impact at the gas pump, the grocery store, the doctor and, frankly, all over. The issue is that you don’t have a choice not to buy certain things.

It’s interesting, because, we sort of have a love-hate relationship with our financial world.  We love that the economy is back roaring at a full-employment rate and that almost anyone can get a job if they want one.  We also love that wages are going up and that we are back in the car and eating out and traveling. But at the same time, we hate that this growth breeds inflation, resulting in costs for everything rising.  We also may support the Ukrainians in their war with Russia, but we hate the costs to us.

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Today’s Pump Pain: Worse Than 2008 Gas Prices?

The current surge in gas prices probably has many motorists wondering: Are today’s prices higher than gas prices in 2008, the last time we saw a huge run-up in fuel costs?

The answer: Yes … and no.

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In nominal terms, today’s gas prices are far higher. According to travel website AAA, the current national average price of regular unleaded is $4.72 per gallon. Back in the summer of 2008, right before the financial crisis sent the economy into a deep recession, prices peaked at $4.11. So, we’ve already blown past that old record.

But if you adjust for inflation since 2008, we don’t have the highest gas prices ever – yet. According to this inflation calculator from the Bureau of Labor Statistics, $4.11 in July 2008 is equal to $5.40 in today’s dollars.

So, if you feel any relief knowing that you’re not paying as much in inflation-adjusted terms for gas now as you did in 2008, remember those figures. (But somehow, we doubt that knowledge is very comforting to most drivers.)

We Could Still Make a Run at 2008’s Gas Prices – Inflation Included

Unfortunately, there is a chance that gas prices will take a run at the inflation-adjusted high of $5.40 sometime this year.

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Keep in mind, the summer travel season is just getting underway, which means months of high gasoline demand lie ahead. Oil prices are high, and refineries are struggling to keep up with global fuel demand.

Many refineries shut down when the COVID-19 pandemic crushed global fuel demand in 2020, and few new ones are slated to open anytime soon. Here in the U.S., most existing refineries are running flat out to meet both domestic consumption and demand from Europe, which is seeking alternatives to Russian gasoline and diesel fuel in response to Moscow’s invasion of Ukraine.

How high gas prices will go is an open question, but $5 for the national average seems like a good bet, considering we’re already at $4.72.

From there, it wouldn’t take much more to push us to that $5.40 inflation-adjusted mark for gas prices set in 2008. For instance, if a hurricane shuts down refineries on the Gulf Coast this summer – a real concern, given forecasts for an above-normal hurricane season – gas prices could jump well over $5 on average.

So, when it comes to gas price predictions, our pessimistic one is: Budget for even worse pain at the pump this summer. If you’re looking for real-world ways to mitigate that pain a bit, check out this handy list of fuel-saving tips that really work.

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How Does Working Longer Affect Your Social Security Benefits?

If you’re like many seniors, Social Security benefits will make up the majority of your income during retirement. According to the Center on Budget and Policy Priorities, half of older Americans rely on Social Security for at least 50% of their income, and 25% rely on it for 90% of their income.

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You may be working longer, too. U.S. workers between 62 and 65 are working at the highest rates since data began being recorded in the 1960s. And those over 65 are about twice as likely to be working today as those in 1985, with around 20% still in the workforce (though there was a slight downturn during the pandemic).

To me, the first set of statistics highlights the importance of Social Security benefits to your retirement life — and the need to maximize those benefits. The number of Americans working longer tells me that a lot of you may want to know how working longer can affect your benefits, and how you can make the most of those earning years.

Social Security & Working Past ‘Retirement’

Some people who work longer delay receiving Social Security benefits so those benefits can grow. As you probably know, you can increase your Social Security benefits by delaying the date at which you begin receiving them. In other words, the longer you wait to collect your benefits, the bigger your benefit (until age 70, at which point they stop growing). You can use the Social Security Administration (SSA)’s calculator to figure out how much you could earn by waiting.

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I think there’s another, unsung perk to working longer: You could increase your benefits by delaying credits and by bumping up the earnings numbers used to calculate those benefits. Social Security calculates your monthly benefit by using your 35 highest-earning years (until age 70). As long as you keep working and paying into Social Security, your earnings record will keep being updated. If the money you make in later years outweighs what you made earlier, your benefits will increase accordingly.

Some Pros to Working Longer (And a Few Heads-Up)

Working past the more traditional retirement age of 65 may boost more than your Social Security benefits.

  • Any future spousal benefits would increase, too.
  • You may stay sharper. Several studies show that people demonstrate higher mental acuity if they continue to work. These studies show it’s likely due to the social networks and mental challenges of work.
  • You may save money by sticking with your employer’s healthcare instead of using Medicare, especially if your spouse is covered by your plan and not eligible for Medicare. The rules around signing up for Medicare can be complicated, but Medicare.gov says, “Generally if you have job-based health insurance through your (or your spouse’s) current job, you don’t have to sign up for Medicare while you (or your spouse) are still working. You can wait to sign up until you (or your spouse) stop working, or you lose your health insurance (whichever comes first).” There are exceptions, though, and you may want to consider delaying Part B but sign up for Part A because it’s free. Be aware: If you enroll in Medicare, even just Part A, you can’t contribute to a health savings account.

A Few Additional Heads-Up

If you have traditional retirement accounts, you may run into some required minimum distribution (RMD) issues. Thanks to the 2019 SECURE Act, you don’t have to begin withdrawing RMDs until April 1 of the year after you reach 72, but if you’re still working at that point, your RMD income could bump you into a higher income tax bracket.

You’ll have to pay taxes on your Social Security benefits if your total income is over $25,000 if filing as a single person or $32,000 if you’re married and filing a joint return. Your annual income (including any income from RMDs) will determine the percentage of your Social Security benefits that are subject to income tax.

In addition, higher earners might pay more for Medicare Parts B and D. As mentioned earlier, you could stick with your employer’s healthcare plan to avoid this issue.

Another thing to think about: You can “unretire” after signing up for Social Security, within limits. Changed your mind and want to delay retirement benefits and earn credits instead? If you change your mind within 12 months of taking your benefits, you can request a withdrawal of benefits and take them later when you qualify for a larger benefit. There’s a caveat though — you’ll have to repay all the benefits you and any family members received. If it’s been longer than a year since you started receiving your benefits, you’ll have to wait until your full retirement age to ask for a suspension of benefits.

Should You Work Longer?

When making this decision, I suggest you consider not just your financial situation, but also:

  • Health: Think about your health — and that of your spouse — and your healthcare needs. As mentioned earlier, working later in life can be beneficial to your mental health, but how does it affect your physical health? And how is your spouse’s health? Do they need more help around the house? Do you need to continue working to help pay for medical treatments? Don’t forget to consider the fact that time spent at work is time away from your family.
  • Longevity: Do you come from a long-lived family? Working longer and delaying taking Social Security will both boost your retirement income, which is extra important for those with long life expectancies ahead of them. I suggest you plan to make your money last as long as you do.
  • Your job: Do you like it? Does it make you feel younger?

And of course, take your salary into account. Though ageism in the workplace can be a problem, it may not be an issue for everyone. Some companies may value the experience and wisdom of older workers. In fact, the median earnings of working Americans ages 62 to 65 exceed those of younger workers.

All expressions of opinion reflect the judgment of the author, Ken Moraif, as of the date of publication and are subject to change. Ken Moraif is a controlling owner and investment adviser representative of MMWKM Advisors, LLC, doing business as Retirement Planners of America (RPOA), which is an SEC registered investment adviser. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that RPOA has attained a certain level of skill, training, or ability. Ken Moraif has worked in the financial services industry since 1988 and has been a CERTIFIED FINANCIAL PLANNER™ professional since 1998. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. Readers should not rely on this content as the sole basis for any Social Security, financial planning, investment, or related decisions. A professional adviser should be consulted and/or independent due diligence should be conducted before implementing any of the options directly or indirectly referenced. This article should not be construed as a solicitation to render personalized investment advice. Retirement Planners of America makes no warranty, express or implied, for any decision taken by any party in reliance upon the information discussed. While information presented is believed to be factual and up-to-date, Retirement Planners of America does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.
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20 Great Jobs For Retirees for Flexibility and Extra Cash

No matter your experience or how long you’ve been out of the workforce, these eight jobs for retirees are handpicked to fit the needs of older workers.

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8 Risky Jobs That Pay Big Bucks

Often with dangerous jobs, the pay doesn’t come close to compensating for the risk. In fact, plenty of perilous jobs pay pay sums compared to other options. Take fishermen and loggers. They can expect median salaries of under $35,000 a year, $23,000 less than the mean for all workers. Yet the fatality rate for fishermen is nearly 39 times the rate for all occupations, the highest of any profession, in fact. Loggers, at nearly 28 times the overall fatality rate, rank second.

The COVID-19 pandemic shook up the risk scenario in the workplace. Overall, workplace injuries and illnesses were down 5.7% in 2020, compared to the previous year. But a closer look at the numbers reveals that while injuries dropped significantly, illnesses went way up. 

The pandemic also made a new group of low-paying jobs among the riskiest in the nation. Nursing assistants had the highest number of days of any profession away from work in 2020, the most recent year available, according to the Bureau of Labor Statistics. They had 1,024 days away from work per 10,000 workers in 2020, an increase of 14 times the rate in 2019. Yet nursing assistants make a mean wage of just over $30,000.

Going back the last few years before the pandemic, there were generally between 10,000 and 11,000 respiratory illnesses among U.S. workers each year. In 2020, however, there were nearly 429,000. Conversely, the days away from work decreased slightly for heavy and tractor-trailer truck drivers, whose mean wage was just over $50,000, between 2019 and 2020.
 

As perilous as work has become for many during the pandemic, fewer people were injured on the job in 2020 than in any year since 2013, according to the most recent data from the Bureau of Labor Statistics. Still, those data showed an American worker died every 111 minutes from a job-related injury. The most common cause of death on the job was transportation-related incidents, which resulted in 1,778 deaths that year, more than 37% of all work-related deaths.
 

Not surprisingly, workers in jobs that involved transportation and moving material accounted for the biggest proportion of occupational deaths at a total of 2,258, accounting for more than 47% of the total work-related deaths in the U.S.

We believe that if you’re going to take a risky job, you should at least get compensated handsomely for it. So we crunched the numbers on injuries, fatalities and salaries to identify eight occupations offering paychecks that make up for the elevated risks by paying more than the national median of about $58,000. Top earners in many of these fields can enjoy six-figure salaries, in some cases even without college degrees. Plus, many of them won’t be replaced by technology, which spells job security. 

Take a look at these risky jobs that pay well.

Data sources: All data provided by the U.S. Bureau of Labor Statistics, unless otherwise noted. Most statistics from 2020, unless otherwise indicated. That year, the fatality rate for all occupations was 3.4 deaths per 100,000 workers.. “Top pay” represents the annual salary of a worker in the 90th percentile of an occupation, unless otherwise noted. We used the most updated data provided by BLS. In some instances, that was as far back as 2019 or older. Also, in some instances, the bureau provided median salary information, while for other occupations, it provided average salary information.

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