Inflation, stock market worry despite Social Security hike

By Amy Geiszler-Jones | October 31, 2022

Lou Sheets has put off restoring a vintage car due to concerns about inflation while Wakeelah Martinez, below, is saving money by only eating one meal a day. Photo by Fernando Salazar

Living on a fixed income with the current inflation means Wichitans Wakeelah Martinez and Jim Lichlyter are making some tough decisions.

“I eat only one meal a day,” said Martinez, 72, a full-time caregiver for her mother, with whom she lives. The pair live on $2,000 a month.    

 “Thank goodness Mom has Meals on Wheels.” Martinez said because she doesn’t eat meat, the meals offered through the program aren’t an option for her.

Lichlyter, 69, a disabled veteran and retired state worker living on his pension and full Social Security benefits, has made changes in his eating habits, too. He said he’s found it cheaper to go out to eat and order enough food for two days rather than deal with rising grocery and utility costs to cook his own meals.

Lichlyter said he’s also cut down on driving to visit friends, mainly keeping company with his cockapoo Daisy Mae, and has put off doctors’ appointments — a decision that caused what was recently diagnosed as spinal stenosis to worsen.

He maintains a list of errands to run so that he can consolidate those trips into one day every week or two.

Wakeelah Martinez

“It’s rough out here,” Martinez said.

She’s not wrong. Inflation is reaching record highs.

According to federal figures released in mid-October, consumer prices rose 8.2% for the 12 months ending in September. Increases in housing, food and medical care costs were the biggest contributors and were partly offset by a decline in the gasoline index, according to the Bureau of Labor Statistics. 

The inflation rate isn’t the only thing making history for these seniors. In July, it was reported that the stock market slump had lopped off $3 trillion in Americans’ retirement savings plans.      

More recently, the Social Security Administration announced it was increasing benefits 8.7% for 2023, which is the biggest cost of living adjustment since 1981.

Unlike with previous COLA increases, seniors won’t be facing higher Medicare premiums. It’s the first time in over a decade that premiums are not rising, according to the Social Security Administration website. 

The current inflation rate has more than wiped out this year’s 5.9% COLA increase in Social Security benefits, according to a recent article in Kiplinger, which publishes business forecasts and personal financial advice.

Lou Sheets, 83, a former aviation worker for more than 40 years who retired 22 years ago, said he’s learned lessons from previous economic downturns as well.

“After the last big downturn a few years ago, we went more conservative” on he and his wife’s investments, Sheets said. They worked with a broker to invest in stocks that are more income-producing so that they could maintain his 401k plan and draw income off of that. 

But even conservative plans can take a hit, and lower returns mean there’s less money to spend. 

Sheets said he and his wife are reconsidering some lifestyle choices, albeit not as drastic as others.

“We are some of the fortunate ones,” Sheets said.

The couple has put off selling their home to buy a more aging-friendly patio home and Sheets, a self-professed old car buff, has put off restoring the couple of cars he has sitting in his barn.

“When you don’t know what the future holds, you postpone and hesitate,” he said. “My feelings go out to those who are not as fortunate.” 

He remembers what it was like to be living on a fixed income, being raised in a family that lived on government benefits because his father was 100% disabled. During his career, he made sure to take advantage of the 401k plan offered when he worked at Learjet for 35 years and also  invested on his own.

Martinez thought she was being wise too in setting aside money for retirement during her 30 years teaching at Howard University in Washington, D.C. as a mass communications professor. She retired and returned to Wichita in 2006 to help take care of her parents and other ailing relatives. 

She ended up spending all that money on helping her parents.

“It was a lot — home and car repairs. They were always behind on their meds,” Martinez said.

Her only source of income now is her Social Security benefits. Her mother’s primary source of money is Social Security as well, with a small pension from her time working in aviation.

To do any of the travel associated with work she’s doing on behalf of the African American Council of Elders — Wichita/Sedgwick County, such as getting historical Black Kansas settlements recognized or establishing a partnership with a tribe in Ghana, she relies solely on donations from individuals and other organizations.

She recently diverted the $50 a month her niece was giving her to help with her medications to purchase a life insurance policy instead. She uses prescription discount programs when she can.

Going back into the workforce isn’t an option for them, said Martinez and Lichlyter.

Finding respite or relief to help with her mother’s care has been frustrating and inconsistent, Martinez said. She said she’s been told by those in the home health care industry that they are having a hard time finding reliable workers. Another factor that thwarts workers is that her mother’s home health would be covered by Medicare, which pays a much lower fee than patients on private insurance, she’s been told.

Lichlyter spent nearly 20 years trying to qualify for disability benefits as a result of the seven years he spent in the Army in the 1970s. He then worked 23 years in the state’s disabled veterans outreach program, helping vets transition to private sector and getting them the benefits and resources they needed, before he left that job in 2001. He received Social Security disability benefits since then until he reached full retirement age, when the Social Security Administration converts those benefits into retirement benefits.

Tips to help survive inflation

The No. 1 tip most financial advisers give for facing rising living costs is to re-evaluate one’s budget. Write down your current expenses and see where you may be able to save money.

“Rising consumer costs are prompting people to re-evaluate their discretionary spending on items such as subscriptions (magazines, streaming services, etc.), travel and leisure,” said Gaylyn McGregor, a wealth adviser with Mariner Wealth Advisors in Wichita.

Personal finance guru Suze Orman, in a recent tele-town hall for AARP, said people who are contributing to retirement plans should continue to do so, since their money buys more shares when the market is down. 

One way to help with expenses is to consolidate trips or carpool with neighbors, friends or family members when going shopping. Buy generic food brands, look for sale items and buy cheaper cuts of meat. 

Another tip for those who haven’t reached full retirement age is to work longer. While Americans can start claiming Social Security benefits at age 62, the payout will be reduced compared to getting 100% if one waits until full retirement age.