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Inflation is an inevitable reality, and seniors living on fixed incomes struggle disproportionately when it occurs. When a dollar buys less than it previously did, older Americans’ financial matters become complicated. Here’s how to help elderly parents manage finances when inflation hits.
What is inflation?
A comfortable life means having the ability to buy essential products, like food, fuel, and utilities, such as electricity and transportation. It also means being able to afford necessary services, such as medical care, as well as entertainment and labor.
When inflation occurs, the dollar loses value. Prices rise, and currency has less buying power; essentially, the same dollar buys fewer products and services. Older Americans’ general cost of living can be impacted significantly when they lose their purchasing power as a result of inflation.
How is inflation affecting seniors?
The United States is currently experiencing the highest rate of inflation (at 8.5 percent in March 2022) since December 1981. Energy prices, particularly gasoline and fuel oil, have soared 32 percent, as the Russia-Ukraine war pushes crude oil prices higher.
Food prices have also risen 8.8 percent. Inflation has caused wholesale poultry products to increase in price by 9 to 12 percent this year. Fresh fruits and vegetables will cost 5 to 6 percent more. Baked goods and desserts will be an extra 3 to 4 percent costlier.
In addition to soaring fuel and food prices, seniors are feeling the pinch by paying higher costs for home heating and prescription drugs. Even the cost of the standard Medicare Part B premium increased by 14.5 percent for 2022, which comes to $170.10 monthly.
Inflation is expected to persist due to the Russian invasion of Ukraine as well as continued supply chain issues, all of which spike a demand for goods and thereby cause price hikes nationally. Older Americans living off an already low fixed income feel the financial blow exponentially.
Seniors who receive Social Security have benefited from a boost: a 5.9 percent cost-of-living adjustment for 2022. The average retiree benefit is now $1656.30 per month. However, these increases are being outpaced by inflation. For many seniors, this meager $20k is their largest source of yearly income.
How can adult children help parents during inflationary times?
1. Make Lifestyle Adjustments
Flexibility is key to navigating inflation. Retirees, especially, can take advantage of having a more flexible schedule than other age groups. When airline prices soar, older adults can choose to delay a vacation until next year. Similarly, higher gas prices may convince seniors to scale back on driving.
When shopping for food, adult children may suggest elderly parents purchase more chicken instead of higher-priced red meats. Rather than heading to the grocery store for fresh produce, seniors may opt to buy more affordable products at the local farmer’s market.
2. Delay Claiming Social Security
Adult children are encouraged to discuss with their elderly parents when they will claim Social Security. Delaying claiming Social Security will buy more Social Security income and protect seniors’ income from inflation. Up to age 70, seniors can significantly increase their benefits for each year they wait to retire.
3. Take Tax Credits
Families that help elderly parents file taxes can take advantage of multiple tax credits. Seniors aged 65 and over are eligible for the Earned Income Tax Credit (EITC) if they earned less than $57,414 during the 2021 tax year and have less than $10k in investment income.
Another tax credit the IRS offers to reduce seniors’ tax burden is the credit for the elderly or disabled. Seniors aged 65 and older or those on permanent and total disability who have a taxable disability income can receive a credit ranging from $3750 to $7500, depending on filing status.
Deductions can also lower the tax bill, especially for older adults who have high medical expenses. Seniors are advised to itemize their deductions rather than take the standard deduction, thereby reducing the medical and dental expenses that exceed 7.5 percent of their AGI.
4. Apply for Nutrition Assistance Programs
Seniors may be eligible for nutrition assistance programs, which help when food prices skyrocket. The Supplemental Nutrition Assistance Program (SNAP) offers a maximum of $250 monthly per single household to help people buy food. Seniors over 65 may qualify for special SNAP deduction allowances.
A helpful program run by the USDA is the Seniors Farmers’ Market Nutrition Program. Low-income seniors are eligible and given access to locally grown fruits, vegetables, honey, and herbs. Aging adults can pick up their fresh produce from senior centers and housing.
Dealing with inflation can be done with support from family members and Assisting Hands Home Care professionals who are knowledgeable about elder care resources and experienced in providing senior services. We are a leader in senior care and can help your elderly loved one through inflationary times.
Our nonmedical home health care services are comprehensive, from reliable transportation to help with daily routines. Caregivers drive your loved one to farmers’ markets to shop for fresh produce or to the senior center for grocery pickups and recreational activities. We take seniors to doctors’ offices, too.
Professional caregivers also assist seniors with personal hygiene tasks, like bathing, toileting, grooming and dressing. If your aging loved one is on medications, we give timely medication reminders to ensure medication compliance. Meal preparation and help with eating are also included.
Assisting Hands Home Care providers are excellent companions to the seniors we compassionately serve. Feelings of social isolation and loneliness are alleviated in the older adults who receive our care. Our companionship services include conversations, games, and pursuing enjoyable hobbies.
While inflation can be a financial challenge, seniors who choose Assisting Hands Home Care can be assured of a higher quality of life. If your loved one lives in Glen Ellyn, Warrenville, Naperville, Westmont, Woodridge, Lisle, Wheaton, IL, or surrounding communities, choose our home care agency for the best in elder care. Call us at (630) 634-9316 for an in-home consult.
Sources:
https://www.forbes.com/advisor/personal-finance/inflation-financial-assistance-seniors/
https://www.investopedia.com/terms/i/inflation.asp
https://tradingeconomics.com/united-states/inflation-cpi
https://www.cnbc.com/2022/03/22/how-retirees-can-navigate-higher-prices-due-to-inflation.html
