Here's Why Inflation Is Especially Bad for Seniors

Senior adult man grocery shopping


Cheapism is editorially independent. We may earn a commission if you buy through links on our site.
Senior adult man grocery shopping

Feeling Pinched

Inflation is hitting everyone hard these days. However, for one group, the price increases have been especially bad: seniors. Many seniors have poured years of their lives into work only to be strapped for cash in their golden years. Keep reading to find out why inflation is having a larger impact on them.

Sponsored: Retire in comfort without compromise

Are you one of 64% of Americans who thinks their retirement savings may not be enough? SmartAsset's free tool can match you with up to three fiduciary financial advisors in your area in five minutes to help answer that question.

See why 75 million people trust SmartAsset's tools and services each year to ensure they have enough money to retire comfortably.

Woman with face mask travelling in the tram during Covid-19 outbreak

Seniors Often Can’t Work

As people get older, tasks that were once simple become much more cumbersome or even exhausting. Many seniors can’t work because of health issues. According to a report by the Administration for Community Living in the U.S. Health and Human Services Department, in 2020 some 39% of Americans over age 65 had difficulty with mobility, 29% had trouble hearing (even with hearing aids), and 21% had difficulty with seeing (even with glasses). Obviously this makes work much more challenging if not impossible. 

Related: Reduce Your Health Care Costs With These Expert Tips for Seniors

Concentrated asian middle aged female businesswoman using portable computer
INFLATION word on calculator in idea for FED consider interest rate hike, world economics and inflation control, US dollar inflation
Khanchit Khirisutchalual/istockphoto

Increases in Social Security Payments Aren’t Cutting It

As the cost of goods skyrocket, seniors still aren’t seeing their Social Security checks increasing at the same rate, says Jerry Patterson, president of Fidelity Investments Life Insurance. “Even with this year’s 8.7% cost-of-living adjustment to Social Security, which is the largest in a generation, people are still feeling the impact of inflation in a big way.” 

For more smart senior-living stories, please sign up for our free newsletters.

Businessman analyzing crypto currency market graphs

The Stock Market Has Been Volatile

Another reason inflation is especially bad for seniors is the associated stock market volatility. Even with conservative investments, seniors are still riding the rollercoaster — only now, they don’t have a long time horizon to wait out large market dips. “Market volatility is chipping away at the nest eggs and purchasing power of many seniors creating further anxiety,” says Patterson. 

Related: How to Outsmart Inflation

Grandfather and grandson in garden

Inflation Reduces the Value of Seniors' Savings

Inflation can also affect the value of savings and assets seniors may have accumulated over their lifetime. As prices rise, the purchasing power of their savings is reduced, and any assets, such as real estate or stocks, may also lose their value, says Andrew Lokenauth, financial executive and founder of Fluent in Finance.

Elderly woman at the doctor's office

Seniors Spend a Large Portion of Their Income on Necessities

Seniors also tend to spend a higher proportion of their income on basic needs like housing, healthcare, and food, says Lokenauth. This makes cost-cutting difficult since there may be no “lavish” expenses to cut in the first place.

Senior woman in the supermarket checks her grocery receipt looking worried about rising costs - consumerism concept, rising prices, inflation

Many Seniors Worry They Won’t be Able to Afford Groceries

Paying For Senior Care, a website designed to help seniors understand their long-term care costs, completed a study in September 2022 with shocking results. Its survey of 1,000 seniors found that 4 in 10 were worried they wouldn’t be able to afford groceries in the future because of inflation.

A health visitor with tablet explaining a senior woman how to take pills.
Older man with prescription medications

Prescription Drug Costs Are Skyrocketing

Seniors are more likely to need prescriptions, and the cost for these is rising. AARP found that the price of prescriptions increased at twice the rate of inflation 2020.