The Mental Fitness And Buying Power of Being Retired and on a Fixed Income

J. Harris

Photo by NeONBRAND on Unsplash

Do you think you are a victim of circumstance?

Most retirement income sources are fixed since you are not earning more and adding to your assets — other than the lucky few earning interest or other returns on investments.

  • Your Social Security payments may go up (or down) for cost of living adjustments, but once you start Social Security, your monthly payments are fixed.
  • Pensions are like Social Security and are also considered to be fixed income.
  • Lifetime annuities are fixed income and a great way to guarantee that you won’t run out of money in retirement. Source:

People are retiring earlier and living longer. Since 1950, the average retirement age has decreased by about five years and the average life expectancy has increased by more than a decade. Looking at the glass half full, this gives you another 15 years in retirement. Looking at the glass half empty, this gives you another 15 years in retirement.

Having those extra years to live and be with family is wonderful, but the cost of living will constantly be eroding your income.

Social Security

Social Security has a built-in annual cost of living adjustment, so most people assume that it will keep pace with inflation. Unfortunately, that may not be the case. Social Security adjustments are based on the Consumer Price Index or CPI. For decades, the Bureau of Labor Statistics (BLS) calculated the CPI in a fairly straightforward manner. They looked at a basket of goods, and determined how much it would cost. The following year they would price out that same basket of goods and the CPI would go up or down based on the new price.

In the 90's, some in government began to argue that inflation was overstated. They argued that as prices increased people would substitute less expensive alternatives, so the “basket of goods” should be adjusted each year.

If steak got too expensive, they assumed that consumers would substitute something cheaper like hamburger. So why not remove steak from the basket, put hamburger in and voila, inflation is under control.

Rather than implementing this “variable basket,” the Clinton administration implemented a different process that essentially achieved the same results. The BLS began to weight items in the basket differently. Basically, items that were increasing in price were given less weight than items that were decreasing in price.

Applying this to your Social Security check, you can see that the annual cost of living increase built into the program won’t necessarily help you to keep pace with inflation if it is based on the fuzzy math of the CPI.

A case in point: there were no cost of living adjustments in either 2010 or 2011, even though prices for things like food, fuel, and medical care undoubtedly increased over that period.

The best way to overcome this hurdle is to build your own inflation factor into your Social Security benefits. How do you do that?

The average person retires at 62 and takes a roughly 20 percent permanent reduction in benefits. Rather than following their lead, if you wait a few years you can retire on full benefits. Even better, retire a few years “late” and you can add as much as a third to your annual benefit (eight percent per year for those born after 1943 to a maximum age of 70). The annual cost of living adjustment will still be understated, but it will be based on a much higher benefit amount. Source:

This is well and good if you are looking to your future, but what about right now while you are in it.

The “cost of living” adjustment this year was an increase of $20.05. Wow! What difference does that make to anyone retired or not? Maybe I can now buy toilet paper, tooth paste, and detergent.

I can’t really blame anyone because I brought it on myself. When I was making around $60,000, left my job and now get $16,000 or so a year; it is quite a difference in affordability as well as mindset and the years just keep ticking away. (If anyone responds to this post and says I need to invest, I will scream.)

You don’t understand. I live check to check with some other government benefits. I never saved for retirement. I had two kids to raise, widowed, and had only death benefits for the children until their eighteenth birthday. I lost $12,000 in one year.

There was no life insurance policy or anything and my ex was buried in a pauper’s grave site. His entire family pretty much disowned him so he was an outlier or black sheep which didn’t help us in any way.

He was not a good provider and was a very selfish person so now my situation is partially the result. I can’t blame him for everything. Life is expensive when you have children. It still is as they still live with me at twenty-five.

Life Changes

Anyway, there have been a lot of changes for us in the last five years. My boys have worked everyday but they don’t have anything to show for it so they are disgruntled, in debt, and have put up many stops to their future. They both stopped working last September which has caused me to make major changes for us all.

One son has a girl friend that complains about his life and how he lives. He has closed himself off to a lot of people including me. Only her. No other friends. Too young to be this way.

The other is more open and sees all that is going on but is reluctant to move forward because his twin brother isn’t. He never takes the lead but in this he must as far as I am concerned. He still lets me hug him. That is really something to be thankful for.

Some family members tell me I shouldn’t write about such personal things and spread them around the world for people to read. I say I am being honest and forthright. I tell the truth. And if things ring true for someone and I could help them in some way then I am going to write about what happened to me.

Learning to adjust to financial constraints

Now we moved into a 55+ community and the rent has dropped tremendously. There are also many benefits here. They have a monthly newsletter so I need to research this place and find out where I stand and what I can take advantage of.

Just to get known a little better I have sent some poems and articles to the newsletter staff to post. They liked them and said they would. I have also joined the on-line Nextdoor group to be able to be in touch with new neighbors.

The owner is a good person and was willing to stand up for us when she didn’t know us. It is a “condo” community so there is an association that lays down rules for all to follow for both the buyer’s as well as the renter’s.

As of March 2020 all recreation at the center has been closed. Everyone is in lockdown. Masks, hand sanitizing, and social distancing has been set up so no one gets sick. But we do have the Fire Rescue crew coming blazing in the community on a regular basis. I can hear their big engine coming but they don't use their sirens. They are usually picking up sick people for various reasons. No one asks.


Since my entire Social Security check goes to rent we have to eat I applied for food assistance. They have obliged for the time being. The twins are able-bodied and need to get to work or there will be no food.

My daughter has helped a great deal since my sons have not been able to. She has been a great asset to us all. Last week my grand daughter had a baby so my daughter is caring for that little being. There are also some extenuating circumstances with that situation. She is now extending less help to me but that is okay. A new baby in the house takes all the time.

On our own

There is no one else that can help in any way so here we are, doing our best in a bad situation. Thank goodness the stress of paying high rent has been handled. I have also gotten help with payment of my electricity but only until March or so. We need to make some dough the best we can.

Just know there are ways of dealing with problems even if it is not the most conventional.

All of these statistics are sure to change since the coronavitus hit and put the world in a tailspin.

We don’t know what will happen next but for sure the social services will be hit hard as well because the economy will tank for a time.

The loans that are set aside for small businesses have to be paid back. The government will get back the money they gave out for the stimulus package to individuals in some way.

Why do you think some payments have gone through the site? Hmmmmm?

Jo Ann Harris is an author, parent, book devotee, writer, copywriter, and film fanatic. She is an autodidact who learns about everything and rows her own boat. She grew up and worked in Atlanta, Georgia and lived there sixty years. She writes articles about love, hope, personal life stories, advice and poems. She is a published author with an article published in Woman’s World magazine in October, 2017.

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I usually write about a lot of subject matter from my own personal life to animal behavior. Everything in between. I have been writing for over two years but have always been a writer and avid reader. I lived in Atlanta, GA for sixty years then moved to South Florida and it was a huge change for me. I write truth as I see it in hopes it will help others.

Plantation, FL

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