- Senior Living
Understanding Seniors' Concerns of Rising Inflation Prices
Older Americans on fixed incomes are among the hardest hit by the rising inflation that has gripped the economy. Costs are surging in all areas, including food, housing, transportation, medical care, prescription drugs, construction, and home maintenance. After a lifetime of hard work and raising children, many older adults are now worried about how they will manage daily expenses and enjoy their retirement during the highest inflation rate in 40 years.
We'll look at the effects of inflation prices, the economic areas of primary concern, how older adults make adjustments (some positive, some potentially damaging) to combat today's higher cost of living, and how senior living communities can provide the stability and support to help aging adults navigate the challenges they face through rising inflation. Plus, look at appealing options for carefree and comfortable retirement.
Impact of Rising Inflation on Seniors
Financial stress can negatively impact one’s physical health and emotional well-being. Even for those who have planned for retirement, it can be challenging to maintain that preferred way of life due to the extraordinary costs of inflation that are happening now.
For older adults, the most concerning factors are:
• Food insecurity and rising food prices
• Heating costs
• Rising healthcare costs
• Rising costs of prescription drugs
• Home repair costs
Additionally, transportation costs, whether through car ownership, using public transportation, or ride-shares, more seniors may opt to "just stay home," adding to isolation and the negative factors related to it, such as depression. We'll explore the impacts of inflation below.
Food Costs & Grocery Prices Rising
Food costs and grocery prices are rising faster than inflation, putting a strain on those with fixed incomes. According to the Bureau of Labor Statistics, the Consumer Price Index for food at home increased 3.7% over the year ending September 2023. This means that the food prices have increased by over 3 times the overall inflation rate.
Seniors on a tight budget are particularly affected by grocery inflation. They may have difficulty affording healthy foods or have to cut back on their food intake. This can lead to food insecurity and malnutrition, which can seriously impact health and well-being.
Here are some specific ways that rising food and grocery prices affect the aging population on a tight budget:
1. Having to choose between buying food and paying for other essential expenses like housing, healthcare, or transportation.
2. Purchasing less food or skipping meals altogether.
3. Opting to buy lower-quality food, or cheap junk food to get by.
Electricity Bills Going Up
Rising energy prices such as electricity greatly impact older adults on tight budgets. Retirees who rely on Social Security or other fixed incomes usually have no wiggle room in their budgets. When prices increase, we all face tough choices between paying for their energy bill or paying for food, healthcare, or medications.
Some states have higher than usual costs. Hawaii, for example, is $43.18 per kilowatt/hour, and Connecticut is $34.44. In contrast, Idaho and North Dakota are at $10.24 per kilowatt/hour. Here's a breakdown of the kilowatt/hour rate for some of the most popular states to retire to.
|Popular States for Retirement
|Energy Costs per Kilowatt/Hour
Heating Costs Rising
With electric prices going up, non-electric fuels are seen as an alternative. They are generally less expensive to heat a home than electricity and include wood, pellet stoves, kerosene heaters, natural gas, and propane. Each one will have its advantages and disadvantages, and much depends on the size of the home and its efficiency.
Healthcare & Prescription Drug Prices Increasing
Many families and individuals are deeply affected by healthcare costs and rising drug prices. For seniors on a restrictive budget, these costs alone can be a major financial burden. From 2021-2022, over 1,200 popular medications rose a whopping 31.6% in cost.
Home Repair & Maintenance Inflation
For seniors living in their own homes, many find home repair and general maintenance costs on the rise. Higher costs of home maintenance from plumbing, heating or AC replacement, roof repair, outdoor maintenance, replacement of broken appliances, and home insurance rates going up are affecting everyone across the country. For older adults who can't do the repairs themselves or find low costs to fix the home, maintenance may be ignored. Unresolved maintenance issues can lead to a greater risk of falls and injuries.
Will Inflation Cause Seniors to Sell Their Homes?
With rising inflation, you may be wondering if it is cost-effective to keep your home or sell. We'll look at the most popular alternatives to outright homeownership.
When kids move off to college, many empty nesters find joy in having a house again. You now have space and plenty of it! However, as we age past the empty nest phase, a large place may become overwhelming, and thoughts of downsizing are considered. A natural choice is moving from a house to a condo. Condos are like small homes, very manageable, with less maintenance, and may have gated entrances and other amenities and features. Downsides include:
• HOA fees
• Rules and Regulations
• It can be noisy and lack privacy
• Maybe difficult to sell
• Many not be designed for aging in place (stairs)
Liquidate and Rent
Another popular option is liquidating and renting an apartment, condo, or townhome. Selling a home and its contents can be freeing personally and release capital. Seniors could invest, pay off debt, and set up for a relaxed retirement. Apartment living can also mean amenities and services, plus no yard or home maintenance. Renters have to deal with rent increases, lack of equity, and less control and need permission to change the rental unit.
However, there are specific senior rental communities designed for older adults. Units are accessible to the needs of an aging population with wider doorways, grab bars, walk-in showers, and more. They offer amenities and services that cater to a mature client and are ideal for those who want to downsize and reduce maintenance responsibilities. Rent can be locked in with a contract, and there are more options to personalize space.
Live with Relatives
Many households are becoming multigenerational with adult children moving parents in (or vice versa) to the family home. Benefits to this arrangement include:
• Reduction in financial burden
• Help with childcare
• Companionship and enhanced family bonds
• Grandparents can serve as role models
Living in a multigenerational home is not for everyone. There may be a lack of privacy or specific family dynamics that cannot be overcome and could cause more stress for everyone. Additionally, families with a parent who has memory loss or cognitive issues may not be well supported to live within the family home. A secure memory care community will be better equipped to care for those living with Alzheimer's or other memory loss conditions.
Sell and Co-own with a Relative
Another option is to sell the home and move in with a relative. This can have the same pros and cons as living multi-generationally. However, joint tenancy would mean adjusting the title of the house. In Illinois, for example, there are three ways this can be accomplished.
1. Tenants in Common
2. Tenancy by the Entirety
3. Join Tenancy
You'll need to talk with a real estate lawyer or agent in your area and an elder law attorney to make sure contracts and obligations are in your best interest.
Build an Addition
Some older adults are selling a home to purchase a new one with adult children and have a separate addition added on. Options include:
• An in-law apartment
• Tiny House
• Apartment over the garage
• Remodel basement area
Additions can be a way to reduce costs and keep parents close. Seniors have independence, and everyone has more peace of mind knowing they are safely nearby.
Of course, this option can be expensive, with construction costs rising overall 9.2% from 2022 to 2023.
Continuing Care Retirement Community
Although selling a family home will need to be well thought out, the benefits can be too great to ignore. Many seniors are opting to sell their homes and make a move into a Continuing Care Retirement Community (CCRC), assisted living, and independent living communities. Gone are all the mentioned costs from home maintenance, appliance repair or replacement, yard work, costly home insurance, renters' issues, and expensive additions.
It can be a great relief not to worry about those things. Additionally, home selling can give soon-to-be retirees a bigger nest egg to fund their retirement and live worry-free. Further benefits include a sense of community within easy reach, greater accessibility to medical care, like-minded friends, and activities.
Retirement Options During High Inflation
As rising inflation threatens seniors' fixed incomes, more are searching for solutions to maintain their quality of life during retirement. For many, Continuing Care Retirement Communities offer a lifeline through predictable costs and bundled amenities and services. By providing a continuum of independent living, assisted living, and memory care, CCRCs allow seniors to age in place with far less uncertainty.
LCS communities have comprehensive amenities and services and a peace of mind approach to future health needs no matter the stage of care for a vibrant and relaxed living throughout retirement. Contact us today to learn more and find your perfect fit.