A couple of isolated observations over the last two weeks brought me to the realization that many of senior citizens are ill prepared for the current economic conditions. Most are surviving on a fixed income that has not increased or at best increased a meager 3%. At the same time interest and dividend income that they rely on has dropped almost into non-existence.
A couple of weeks ago one retiree was arguing with me, claiming that the cost of living could not be higher than 3% because the government gives him a 3% increase each year. I asked how much he paid for a gallon of gas, his electric and natural gas bill, and food last year at this time and he agreed all those bills were significantly lower but he still did not understand our claims that the cost of living has increased as much as 25% because the government told him that the 3% increase in his Social Security check was a cost of living adjustment.
Today as I noticed someone who was clearly of retirement age delivering a pizza to a business. During recent trips to
All of us who are relying on a 401K type program which is based on the stock market and interest income should take careful notice of where the economy is right now and the type of returns or losses those who are already retired are experiencing. Based on historical trends which seem to repeat every 8 to 10 years we will probably find ourselves in the same position at some point during our retirement years. Investments are great in an up economy, in a down economy cash is king. We need to be in a position where we have a backup plan…
