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Location: Was Midvalley Oregon; Now Eastside Seattle area
13,072 posts, read 7,508,849 times
Reputation: 9798
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OP:
our fixed expenses is rising faster than our income. The HOA annual 5% increase easily surpasses the SS increase. We also have a HOA special assessment and of course other normal expenses. We are still good, as we will be taking the full allowed annuity Income this fiscal 2024 rather than just RMDs.
We are going to take another hit today; DW decided to get us, prepaid cremation. She's wants to beat inflation.
And I thought I was the planner
as always
YMMV
I haven’t qualified for SS yet, so can’t speak to the increases, but my fixed expenses have gone up under 4% yearly over the last 5 years.
The biggest reason expenses haven’t skyrocketed is the fact that property taxes, at 10k, make up about half my yearly fixed expenses, and thanks to prop 13, is capped at 2% annual increases.
Everything else has gone up more than 5%, with food and drink being the biggest offender, followed by natural gas. Luckily, I really only run the furnace 4 months out of the year.
It seems to me this inflationary environment has hit retirees harder than working people. Heck, I saw a sign at a fast food restaurant offering 20/hr starting pay. To flip burgers.
Yes, but according to what I have read, 40 percent of senior have only their Social Security of their income, and that is why I am concerned for them, which is what I think I implied in my post.
Again, I am doing fine (knock wood) as I have savings and other income, but many seniors aren't as fortunate.
if they only had SS - would they own property and have to pay taxes?
We are "lucky" that our main property is 100% exempt due to a veteran being 100% disabled. Do have a little bit not part of the homestead, that still has taxes - not developed, so not much - but still did go up.
Many of you are fortunate to have more than just SS to rely on as most of the Seniors in HUD housing are living on just SS. Last year with the increase - my cousin's rent went up $30. It's unfortunate but many are buying their food at the Dollar Tree across the street.
no foodbanks in the area? Here in my small town, there are so many opportunities for folks that need help with food. One church does a supper twice a month - just show up.
We have a mega food bank once a month with tons of food.
Tomorrow a Medicare center will be giving out produce and food to seniors.
if they only had SS - would they own property and have to pay taxes?
We are "lucky" that our main property is 100% exempt due to a veteran being 100% disabled. Do have a little bit not part of the homestead, that still has taxes - not developed, so not much - but still did go up.
I'm another "fortunate" one to be a 100% disabled veteran with the property tax exemption. It also helped moving to a lower COL within the same state. Interestingly enough, I found out that in Virginia, each County (or taxing authority) can make their own rules on implementing the veteran tax exemption. When I lived in Fairfax County, I only got exempt on about 2/3rds. They only exempted the portion for the house, not the acreage and one or two minor taxes. When we moved to York County, all the property taxes are exempt (plus even if I paid property taxes here, it's about 1/3rd of what I was paying in Fairfax). Plus York County approved my exemption in advance, so when we went to settlement we didn't have to include the property taxes and then wait for a refund.
There are some other financial benefits here in VA: No sales and use tax on one vehicle and no personal property tax either.
when you think about it we only set a side with both halfs of fica 15% of our pay a year up to a limit .
so the fact we get back in many cases 30-40% of our retirement income a year isn’t so bad .
so it really makes no sense that a cola on a fraction of what you earned should ever keep up with 100% of the rise in expenses.
as i said earlier , that is a poor assumption that because you are lower income in retirement that a ss check should ever keep up by itself.
that is just wishful thinking .
what helps seniors is the fact many with at least some discretionary spending tend to spend in a smile shape .
we spend more going and doing things in our go go years of retirement , then we hit our slow go years and spending falls off a cliff on many discretionary things . so what we no longer do or buy helps pay for what we still pay for and went up .
then we reach the no go years and spending ramps up on healthcare stuff creating a smile shape over retirement.
studies by ty bernicke and sun life found most seniors end up being less effected by inflation over time then they think.
david blanchette looked in to this too .
In an article titled “Exploring the Retirement Consumption Puzzle,” David Blanchett, with Morningstar, analyzed survey data on inflation-adjusted consumption of retirees over time. He discovered what he calls a “retirement spending smile.” He found that an average household is likely to experience declining real expenditures of 26% from the start of retirement through age 84. After age 84, real average expenditures increase until death — but do not exceed the spending level at the beginning of retirement. This resulted in a u-shaped spending pattern or the “retirement spending smile.”
His analysis found that retirees spent more on travel, eating out and other discretionary items at the beginning of retirement. As retirees age, discretionary expenses decrease and health care costs increase. However, the increase in health care is less than the decrease in other spending categories.
Last edited by mathjak107; 12-12-2023 at 02:50 PM..
My wife and I have been fortunate with health costs. Just this year she's had a shoulder and hip replacement. She has Federal BC/BS, plus Medicare, and neither one of those surgeries will cost us a penny.
My wife and I have been fortunate with health costs. Just this year she's had a shoulder and hip replacement. She has Federal BC/BS, plus Medicare, and neither one of those surgeries will cost us a penny.
my wife and i were hospitalized in 2020 with covid for two weeks ..our bills were 225k ..that was just a normal stay , no ICU .
we paid about 1k in costs with medicare and a high deductible F PLAN
My wife and I have been fortunate with health costs. Just this year she's had a shoulder and hip replacement. She has Federal BC/BS, plus Medicare, and neither one of those surgeries will cost us a penny.
the big problem is becoming the better newer drugs .
old school diabetic drugs like metformin and glimpride were like 9 bucks for three months with my part d plan.
well , all the new better , more protective drugs are tier 4 and 5 drugs and cost 1k a month.
with our part d there is a 500 deductible , then 11 a month until you hit around 4700 n total drugs paid out .
then you fall in the gap and pay 25% of the costs . my trulicity now. cost me 250 a month….plus comes january there is another 500 deductible
social security is only based on providing a piece of your income and as such it should only replace a portion of your cost of living and a portion of the increases.
it’s an increase added to only a portion of what you were earning .
so i would never expect ss to cover entire increases on things …
Totally correct.
My retirement strategy was a pension, a part-time business and investments.
Last year, the business was DOWN 75%. Investments held steady.
My property assessments were up over 200%, we shall see how that translates to the actually property tax bill.
The real increase was in GASOLINE and FOOD. The state of Washington imposed a 50 cent carbon fee on gasoline. And it will go up again this year AND extend to propane.
I really cannot afford the Democratic Party anymore. Sorry.
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. She's wants to beat inflation
.
