I’m amazed that there hasn’t been any good articles written yet on how to keep the current inflationary period we are all going through, at bay. Sure financial pundits are telling us where to invest and what to invest in BUT we retirees need help NOW. Not 10 years from now!

If you’re like me, you only planned for inflation to hover around 2 to 3% per year. Today, the inflation rate is nearing more like 10% and even that revelation is probably too low. I don’t believe the current inflation is going to be transitory. Whatever that means. The government is telling us inflation is temporary. I disagree. I think the current rise in consumer products (inflation) is going to be with us for a long, long time. At least for the next four years, according to Bank Of America (BofA) (click here).

BofA expects U.S. inflation to remain elevated for two to four years, against a rising perception of it being transitory, and said that only a financial market crash would prevent central banks from tightening policy in the next six months.

It was “fascinating so many deem inflation as transitory when stimulus, economic growth, asset/commodity/housing inflations (are) deemed permanent“, the investment bank’s top strategist Michael Hartnett said in a note on Friday.

Hartnett thinks inflation will remain in the 2%-4% range over the next 2-4 years. U.S. inflation has averaged 3% in the past 100 years, 2% in the 2010s, and 1% in 2020, but it has been annualising at 8% so far in 2021, Bofa said in the note.

I based my retirement inflation calculations on an increase of 3% per year. No matter what or how I calculated my future retirement years, nothing in my portfolio prepared me for what is going on now. Prices are through the roof and I have to reset my budget to my new retirement lifestyle reality NOW or slowly go broke.

This isn’t my first hyperinflation rodeo. I remember full well the inflationary period we went through in the 1970s. It was rough. It was notorious for reporting that the elderly had succumbed to eating dog food in order to survive. Back then they didn’t have the government handouts as they do now. In all honesty, if you are a retiree and having difficulty buying food, please apply for food stamps and visit your local pantry STAT! This is no time to stand on ceremony. This inflation crisis is real.

I’m not a financial advisor nor have I had financial training other than what I learn from experience. I can’t dole out financial advice. I can only tell you what I would do in a situation such as we are in and what I am currently doing to deal with the situation we are currently in. So, here goes.

The first thing I do when faced with a financial crisis is follow what Dave Ramsey recommends whenever there is a financial disaster looming up ahead (click here). We need to take care of our four walls first. This would include, in this order: shelter, food, utilities, vehicle (transportation).

Thankfully our home is paid for and it only costs us around $750 a month to live there. The amount covers taxes, maintenance, electricity, heat and insurance….none of which can be eliminated but will surely rise each and every year. Next, I’ve managed to create an adequate food stockpile and all we need to do now is replenish whatever we use. I buy only what we need from the grocery store. No longer will I buy what I want. This has been the greatest attribute in keeping our food budget low and within reason. Third, we got hit with an electrical reality shortfall of $307.19. This meant that our budget plan of $83 a month wasn’t paying our usage in full. Sure, we’re home more but changes are necessary. I upped our monthly budget amount voluntarily and we switched to LED light bulbs throughout the interior as well as the exterior of the home.

We did buy a new-to-us 2019 pick-up truck right before the prices for used cars skyrocketed. Thank goodness for special blessings! I had to liquidate two investment holdings in order to pay cash for the much-needed truck. The vehicle the truck replaced was already 7 years old and the mileage was getting high. We knew it was wiser to replace it sooner than later (potential repairs) and we’re glad we did.

Three months ago my monthly gas expense was under $100 a month. Last month we spent $140. This month, June, we spent $180 (almost double) on gas for the cars and all we did was just our usual driving around town. Nothing out of the ordinary. Add to this the toll we have to pay to cross over a bridge to get to the shopping plaza rose from $1.00 round trip to $1.45 when we use our EZ Pass. Failure to have an EZ Pass and the toll rises to $1.75. I estimated we use the bridge at least 4 times per week. What used to cost us $16 a month is now nearer to $24 a month. Our EZ Pass automatically replenishes, so our checking account diminishes an extra $8 a month through no fault of our own. Errands now have to be combined, jaunts to the shopping plaza have to be cut in half, driving can only be done in our fuel efficient vehicle (thank goodness we have one!) The pick-up truck is reserved for serious RVing.


I’m going to give you my real figures. I’m not going to give you estimates or percentages. I’m going to tell you exactly what income comes in and what expenses goes out and how exactly my husband and I make our budget work and will continue to work going forward. The main thing that hubby and I do is prioritize together. We sit down and discuss what is and isn’t important to us. We figure out what we can keep, what we can substitute and what we can eliminate in order to keep our lives flowing smoothly.

Based on two Social Security checks, one Pension check and one investment, we bring in a total passive income of $36,204 per year. Hubby used to work but due to the pandemic, his clients have all evaporated. Both he and I have been thinking of alternate income streams but as if this writing, nothing is being added in to our income than what I posted. Of the $36,204 our investment brings in $3,252 a year. This whole amount is earmarked for our two annual vacations. We go to Florida in the winter (which is non-negotiable BUT the time spent is Florida is negotiable) and we go to the beach in the summer (this can be either shortened or eliminated).

We’re retired and to us, our travel plans are very important. One thing I learned, however, over this pandemic, is that if we have to buckle down and stay home all year long, then so be it. We did it during the pandemic and survived. We can do it again.

Our Florida RV rental went up $200 a month!. Based on our 3 month stay we need to come up with $600 additional. We are either going to shorten our stay or rent someplace else. I’m hesitant right now to cough up the additional $600. The winter is far away so we’re taking a wait and see attitude. In the interim, I’m seeking out alternate locations. For the summer RV rental, the rent increased from $900 for the month to $1,125. I already paid this fee in full BUT I have no doubt this might be our last year there. Next year we are booking a National Government RV Park along the Atlantic ocean for two weeks at $504 . It’ll be a bit primitive but we’ll have electricity, a bath house and be right on the beach! In the future, if push comes to shove, we can eliminate the summer RV travel altogether and be just as happy at home with our community pool membership ($50 senior rate each for the season).

Of our annual income of $36,204, once you subtract the $3,252 our remaining balance is $$32,952 (or $2,746 a month). This is what we live on. Once you have eliminated all debt out of your retirement life, you will find that you can live very well on much less. Our standard monthly bills are constant every month and change once per year. Those would be our medical insurance, Medicare deductions, life/home/vehicle/RV insurance payments, electricity, heating, cell phone, taxes, internet access etc. Every month, these expenses are the same and come in at $1,192. That leaves us ($2,746 – $1,192 =) $1,554 per month to buy food, gas, dog food, our med co-pays, vitamins and other variable expenses such as home repair, maintenance, clothing, entertainment. This is where we can make the most changes so as to accommodate rising inflation prices. If the sh**t hits the fan, we have our vacation fund to tap in to should an emergency arise. We also have our savings/investment account BUT we very rarely tap in to these funds. Almost never.

We realize we live in a very expensive state. Almost all of our friends and family have moved away (except for my children). Yet, New York is very kind to senior citizens. Our property taxes are discounted and based on our income. New York is filled with gorgeous, beautiful state parks with a plethora of hiking and biking trails, all free to residents over the age of 62. There are tons and tons of free things to do in New York State! Concerts, fairs, events, festivals, flea markets, farms, dairies, museums, art galleries, beaches, lakes, mountains, music fairs…..the list goes on and on. Summer, winter, spring and fall, I’m happy to say New York State has it all. We’ve already downsized in 2001. We’re living in our retirement home. Moving out of state, for now, is out of the question. You can always find a bargain in New York. You can always make a deal. The whole state is negotiable. New York State has the best (IMHO) consumer protection laws in the country.

I’m not going to have this inflationary period ruin my retirement lifestyle. We’ve worked too hard and too long to get to where we are today. We’re not giving it up. What we are going to give up (temporary) is stop buying non-essential consumer items. That means cutting back on our Amazon purchases. No eating out at restaurants or fast food. No manicures, pedicures, hair cuts, massages or trips to the chiropractor (unless I’m in excruciating pain) for me at this time. Hubby has mastered cutting my hair (as well as his own) and I think he does a very good job of it. We set up a TV antenna and will not pay those expensive streaming fees! We’ve cut back on beef but upped our consumption of chicken and fish and of course, beans! We’re cutting back on driving and paying tolls. We’ve cut back on our electricity consumption (Navy showers or half-baths for me). We are buying only what we need and it has to be at the cheapest price we can find. Other than a bathing suit and a new pair of flip-flops this summer both hubs and I have purchased nothing in clothes. We’re doing more DIY projects around the house, such as gardening and landscaping. We take our time and get the job done. A bit slowly but done nonetheless.

Every passing day with hyperinflation sees the value of our cash deteriorate. I don’t think a lot of people realize that. They may be working now, may have gotten a raise or government assistance, so they’re not feeling the pain yet. Don’t worry. You will. My best advice is “Don’t Panic”. You’ll get through this. You’ll make it. Figure out what is important, prioritize and then look over your income vs expenses. Start eliminating and adjusting. It may be time to change your investment course but those results take time. You may need to reset your budget to meet your new lifestyle. In any event, live within your means and stay out of debt. Interest rates are going to rise within the year.

Planning ahead will get you the best results.

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