These are definitely uncertain times. I work 20.7miles from my home and my car gets around 20-22 mpg and I paid $3.79 per gallon of gasoline this morning. It costs me nearly $8.00 to commute to and fro. You may have noticed people moving faster these days, it’s not because they are more in shape…it’s actually a result of their wallets being lighter. Inflation is now in full effect.
From gas to food, everything is more expensive. Food inflation is growing at the fastest rate since 1990. Since I enjoy purchasing things in bulk, I buy my eggs at Costco, but even there the prices have risen quickly. So far, egg prices have increased 40% and milk prices have increased 26%. You aren't even immune if you are vegan, corn and soybeans are prices are also on the rise.
It is simply the perfect storm for many retirees. Falling home prices and a volatile stock market has not only shaken their confidence, it has shaken their retirement portfolios.
Is this a doomsday prediction? Hardly.
There will be booms and busts in both housing and the stock market. The thing not to do is “suffer in silence.” It makes little sense to worry and spread fear when there are simple things that you could be doing right now. In these times of flux, take it as the opportunity to review your budget, create the savings plan that you have been “planning” to do. When you get your stimulus check, put it towards your rainy day fund and put it in a high interest savings account. If you have been putting off starting a retirement account for yourself, do it now. You can contribute for calendar year 2007 to your Roth IRA until April 15. Imagine never having to pay taxes again on that money ever again. The government is giving you a golden opportunity, take it.
If you can learn to budget in these difficult times, you will be well prepared when things turn around. Until that stimulus check comes in, I hear that the Mcdonald’s Dollar Menu is looking mighty good.
Wishing you wealth in all it's greatest forms.
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