Retirees Nemesis: Inflation

I had a newspaper delivery route when I was 10 years old delivering the “Long Island Press” – a now defunct newspaper. I had a sting ray bike with baseball cards in the spokes and because I delivered everyday without fail, the kickstand wore out. So as I pedaled, my pedal would constantly hit the kickstand. You could hear me coming halfway up the block. I would ride my bicycle around the neighborhood delivering the newspaper and on Fridays I would collect the week’s newspaper cost.

Tip the Newspaper BoyIn the early to mid 1970’s, the newspaper announced that they would be increasing the cost of the weekly delivery from 90 cents to 1 dollar. Several of my older customers would normally give me a dollar each week to include a 10 cent tip. However, I can still recall arriving at the first stop of this particular Friday – the home of a friendly elderly woman.

I can remember her pained expression as I approached the door. She stated that she knew that the newspaper had increased the price to one dollar for the week, but she would not be able to give me anything more than the $1.

She realized that there would not be a tip for me. She informed me, at the ripe old age of 11 or 12, that she was being crushed by the ever increasing cost of everything that they needed to purchase every day, every month and every year. She could not keep up with the inflation. This episode occurred several times that Friday afternoon.

I remember discussing it with my mom that night and stating that I never wanted to be in that position when I was older. My mom gave me the motherly advice of “study hard, so you can make a good living”. So, that I did.

Little girl with a newspaper boy's bicycle with the "Long Island Press" bag

My actual bike with the “Long Island Press” bag

Over time, I decided that I not only wanted to make sure that I never was in that situation, but I would also like to help other people avoid that predicament as well. Thus I went to Providence College as an undergraduate and Fordham University as a graduate student studying business. After a couple of jobs in banking and corporate finance, I launched my career in 1996 seeking to help people with their difficult financial situations.

The ultimate lesson that I learned is to help offset the issue of declining purchasing power one must address the issue early –  when still a pre-retiree. So like most financial issues, planning ahead and understanding the true risks are paramount to overcoming this purchasing power issue.  

This issue is a big concern for today’s retirees due to the fact that they will likely experience a retirement that will be longer than any other generation has ever had. The quiet damage done by the regularly increasing costs will become that much greater when facing a longer retirement. We hope this blog will help give you the push to begin the planning journey.

On behalf of your 85-year old self and all remaining paperboys everywhere, plan ahead for the need for lifestyle-sustaining income. 

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About Dan Crimmins

Dan Crimmins, co-founder of Crimmins Wealth Management, is a financial coach and fee only financial planner. Have a financial question? ASK DAN

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