Authored by Emel Akan via The Epoch Times (emphasis ours),
Monica Lomax, a 59-year-old resident of Elkridge, Maryland, has been feeling the pinch of rising costs.
She’s had to tighten her budget, especially for groceries and clothing. Now, her shopping trips are primarily for essentials, a necessary adjustment in her life to manage the financial squeeze.
“I was thinking about purchasing or downsizing into another home. But because the interest rates are still high, I’ve put that off,” she told The Epoch Times.
Many Americans like Ms. Lomax are putting off major life plans due to high inflation. Moving to a new home, buying new furniture, or booking a vacation now seem like distant dreams.
While some cling to the hope that things will eventually go back to normal, others fear that high inflation is here to stay.
Susan Garland, 47, from Elkridge, Maryland, believes inflation remains one of the top issues facing the country.
“We are definitely feeling it. We’re a two-person family. Our grocery bill is now over $100 a week,” she told The Epoch Times.
For more than 10 years, the Garlands’ grocery bills used to be roughly $70 per week—before high inflation hit, she noted. She and her husband have had to cut back on spending on everything, from vacations to eating out.
Her husband, plumber Michael Garland, 53, says homeowners are also reducing their spending on services, which has a direct impact on his income.
“If they can’t afford services, they won’t call me, which affects my job,” he said.
The annual inflation rate has significantly dropped from its peak of 9.1 percent in June 2022 to 3.4 percent in April this year. However, it’s still above the Federal Reserve’s 2 percent target rate. Some economists are cautioning that high inflation might be the new normal and are advising Americans to brace themselves for this reality.
Dipping Into Retirement
Adding to the financial woes, an increasing number of Americans are being forced to tap into their 401(k) savings early to cover emergencies and basic expenses.
Internal data from investment firm The Vanguard Group revealed that 3.6 percent of its participants made a “hardship withdrawal” last year, up from 2.8 percent in 2022.
This issue is particularly serious for retirees, as they face the risk of depleting their savings.
“While we are generally very frugal, it appears our efforts are not enough,” KT Hundsen from Minneapolis told The Epoch Times.
“I have noticed that my husband has cashed out several times, either bonds or stocks, in $10,000 amounts, to be able to pay our usual bills,” she said.
She and her husband are finding ways to reduce expenses by trimming their budget on clothing and furnishings, while also growing more plants and flowers from seeds in their garden.
“We eat out once or twice a month with the grandkids, but instead of dinner, we go for breakfast, which is less costly,” she said.
Retirees rely on a fixed income from their pension plans or Social Security checks, and inflation is gradually depleting their investments and emergency reserves. In a recent report, Boston College projects that middle-income retirees will see a 14.2 percent decline in their financial wealth between 2021 and 2025 due to inflation.
Dennis O’Connor, an 84-year-old retiree from Temecula, Calif., says it’s harder for retirees to adjust their spending to cope with inflation.
“Personally, like most seniors, we have had to adjust not only our current spending but also our spending for a very unpredictable future,” Mr. O’Connor told The Epoch Times.
Read more here…
Tyler Durden
Tue, 05/21/2024 – 06:30
