Inflation is unlikely to cover these costs for pensioners, the report says.

High gas prices at stations in Garden Grove, California on Monday, March 7, 2022.

Jeff Gritchen | MediaNews Group | Getty Images

Inflation continues to rise amid the Russian-Ukrainian conflict and ongoing supply chain problems. But some retirees may not feel the brunt of rising costs, financial experts say.

Annual inflation rose 7.9% in February to a new 40-year high, the US Department of Labor said, covering everyday expenses like energy, food, housing and more.

However, according to JP Morgan, spending changes during the golden years of people’s lives, reducing the impact of some rising spending. 2022 Retirement Guide.

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“It goes beyond the headlines,” said Catherine Roy, chief pension strategist at JP Morgan, explaining how the shopping basket of retirees can change over time.

While gasoline prices have risen about 24% over the past month, older households tend to spend less on transportation than families aged 35 to 44, according to the AAA, making them less vulnerable, the report says.

And some retirees may be able to buy less gas by combining trips or sharing rides, says certified financial planner Katherine Valega, wealth consultant at Green Bee Advisory in the Greater Boston area.

“I don’t think we need to panic,” Valega added, explaining how price changes could be a chance to rethink budgets and long-term plans.

While JP Morgan suggests using a separate line item for healthcare cost growth at a 6% growth rate, other spending categories may only increase by 1.5-2% per year, Roy said.

Excluding health care, retirees tend to spend less in real terms before age 80 on other categories, she said.

These conclusions are consistent with Smart Asset Analysis shows declines in pension spending in 11 of the 14 major categories identified in the US Bureau of Labor Statistics survey of consumer spending.

While the rising cost of healthcare is a concern, it’s not enough to make up for cuts in retiree spending on housing, food and transportation, Anthony Watson, founder and president of Thrive Retirement Specialists in Dearborn, Michigan, told CFP.

“For most people, these other expenses decrease over time,” he said.

For most people, these other costs decrease over time.

Anthony Watson

Founder and President of Thrive Retirement Specialists

Of course, rising spending can now be hardest on the lowest-income households, which tend to experience higher rates of inflation. working paper from the National Bureau of Economic Research.

However, a JP Morgan report argues that it is important for retirees to have a long-term perspective when it comes to inflation.

“It’s just a point in time, and the average is important,” Watson said.

“Yes, we have high inflation right now,” Roy added. “But we are out of a historically low period for a very long time.”

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