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Inflation is cooling across the board, but not for seniors
Inflation may be low for the first time in years, but try telling that to seniors and retirees.
US consumer prices fell in June for the first time since the early months of the pandemic. Consumer prices fell 0.1% on a monthly basis, bringing the annual inflation rate to 3% from 3.3% in May, according to the Bureau of Labor Statistics’ latest Consumer Price Index report.
Yet prices for things like shelter, electricity, hospitals, and outpatient medical services—major expenses for millions of seniors—continue to outpace the overall rate of inflation.
“Prices are going down, but the things seniors are spending on are going up,” Mary Johnson, a Social Security and Medicare policy analyst, told Yahoo Finance. “That’s clearly causing pain.”
Read more: Consumers enjoy a break as inflation continues to cool
Hot summers and high energy bills combine with health concerns
This summer’s record heat means record-high electric bills for many people, Johnson said, which could be a heavy burden for retirees and others on fixed incomes.
Electricity costs are up 4.4% from last year. Meanwhile, more than 138 million Americans were under heat alerts this week, and reports of heat-related deaths are rising. In Santa Clara County, California, there were 14 deaths being investigated as heat-related — eight of the victims were over 65 years old.
“The amount of electricity will be a big change in bills for seniors because they are not used to using so much electricity just to keep cool and stay alive,” she said.
For seniors with health problems, medical care costs are also rising. Inpatient care increased 4.5 percent over the past year, while outpatient care increased 7 percent.
Home health services increased 11.4% — nearly three times faster than overall inflation.
“People just don’t have enough saved up for assisted living, so home health care is something that people have to turn to when they’re hospitalized and need care to get back on their feet,” Johnson said. Home health nurses typically have contracts where they come in for a specific amount of time during the day, and many have a four-hour minimum.
“These costs can be very high,” she added.
The cost of home care rose 11.4 percent year over year — nearly three times faster than overall inflation. (Getty Creative) (sturti via Getty Images)
Not all food costs are falling
Older and disabled adults may be having a harder time getting enough protein in their diets, with the price of meat and eggs continuing to outpace overall food inflation.
While food prices rose just 2.2 percent, many of the most commonly consumed proteins that older adults rely on rose much more. Pork chops, for example, rose 7.4 percent from last year, and the price of a dozen eggs rose 10.2 percent.
The story continues
The price of meat and eggs continues to outpace overall food inflation. (Getty Creative) (LordHenriVoton via Getty Images)
Housing takes up to 50% of budgets
The rent and owner-equivalent rent (OER) index each increased 0.3% on a monthly basis, the smallest increases in those indexes since August 2021. Owner-equivalent rent is the hypothetical rent a homeowner would pay for the same property. It increased 5.4% year over year.
While housing inflation has eased from its peak of 8.2% in March last year, many seniors feel any increase acutely, as housing costs take up about 50% of their budgets.
“And you don’t just have housing, but you also have property taxes and utility bills, as well as homeowners insurance and renters insurance,” Johnson added.
Bottom line: “Although overall inflation is declining,” she said, “the standard of living for many older families is not improving, it is declining.”
Kerry Hannon is a senior columnist for Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including “In Control at 50+: How to Succeed in the New World of Work” and “You’re never too old to get rich.” Follow her on X @kerryhannon.
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