If you’re retired and living on a fixed income, any amount of inflation can eat away at your standard of living and undermine the financial foundation you’ve built for your retirement.
While Social Security beneficiaries received a 5.9% cost of living adjustment (COLA) in 2022, it was still no match for March 2022’s 8.5% year-over-year increase in consumer prices1 or the 14.5% increase in Medicare B premiums that kicked off the year.2
Clearly, older adults need new strategies and solutions to keep pace with inflation.
Of all the uses a reverse mortgage is suited for, helping older adults manage inflation is one to consider. A reverse mortgage loan could help replace lost purchasing power and restore balance to a budget or financial plan broadsided by a barrage of surging prices.
The strategic use of a reverse mortgage or line of credit could help you pay off higher-interest debt, preserve your investment portfolio, or delay taking Social Security, which adds about 8% to your benefit for each full year you wait until age 70.5
1 TED: The Economics Daily – Consumer prices up 8.5 percent for year ended March 2022.
2 CNBC – Medicare Part B premiums for 2022 jump by 14.5% from this year, far above the estimated rise in cost. https://www.cnbc.com/2021/11/12/medicare-standard-part-b-premiums-for-2022-jump-by-14point5percent-.html. Accessed on April 20, 2022.
3 U.S. Bureau of Labor Statistics – Mid-Atlantic Information Office. https://www.bls.gov/regions/mid-atlantic/data/averageretailfoodandenergyprices_usandmidwest_table.htm Accessed on April 20, 2022.
4 Bahney, Anna. CNN – Home prices hit another record high in March. 2022, https://www.cnn.com/2022/04/20/homes/us-existing-home-sales-march/index.html. Accessed on April 20, 2022.
5 Social Security – Delayed Retirement Credits. https://www.ssa.gov/benefits/retirement/planner/delayret.html Accessed April 20, 2022.