Will inflation become big challenge for retired people after 10-20 years?

[Stepstowealth]

I think inflation is a big challenge when it's very high, and it hits vulnerable people more than other people because they're already struggling and inflation just exacerbates the problems. In my country, the elderly are a big social group, and also a very vulnerable one (with a higher poverty rate than average). So yeah, inflation is a challenge for them, and considering that the Pension Fund is getting smaller, it will be an even bigger challenge in 10–20 years, unless we figure out how to improve the overall economic situation and the pension situation specifically. But that all can be different in another country.

It might just be same situation for every country, it we were to start making comparison because inflation has to do with high prices and am very certain that the pension scheme will maintain a steady figure that is being paid regularly, so a matter of soliciting the pension agency would definitely be out of proportion, unless it is the government who acts to adjust salaries and pensions as the inflation in a country gains momentum.

[tsaroz]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

Inflation is crazy and saving on a bank means you are losing money on long run. It's not that you don't need to have a bank saving, it's required for emergency fund but never put money in bank as investment. Some years, FD might beat inflation but a normal saving account would never. So it's better to invest in various diversified sectors like crypto and stocks if you want a safer future. Don't keep you money idle but put them on income generating investments.

[ancafe]

I don't know where you guys live, but in exactly what country if you retire for example with $1000 per month at 65 your pension will be still $1000 even twenty years later, and it's not indexed by at least a bit under the inflation rate? I'm really curious in what system does this happens when it comes to a government pension like the EU model.

I never heard of a country where you get a fixed monthly pension and that value will stay like that till you die.

I live in Indonesia and the average person who retires from the government will find it very difficult to face life because the prices of goods continue to rise. The impact of inflation that I mean is because our currency continues to depreciate so that when the price of goods rises, pension money will not cover living needs and not to mention the costs of other needs such as children's education, health and so on. The money they earn from the retirement process will be as much as they earned while the price of goods continues to rise so that the value of the currency is no longer meaningful.

My parents are both government retirees and they are working hard to meet our family's living expenses. Because relying on pension money will not be enough to fulfill them, this is the reason that makes me say that if pension money is not used to develop other businesses it will make their lives much more difficult.

[knowngunman]

I use this calculator https://www.usinflationcalculator.com/

If you own $1.32 in 2014, now it's worth $1.
If you own $1.65 in 2004, now it's worth $1.

So imagine you own $50K in 2004, now it's worth around $30K, in 20 years your wealth decrease almost by half! exclude banks monthly fees, charge, etc etc.

If someone didn't dare to invest their money, they will broke in the future.

In this recent time and considering how informed the society has become, do people still save their money in the bank for a long time? I doubt it. This generation is well aware that inflation can erode the value of money over time and also know the importance of investment in order to maintain the purchasing power. I know the risk associated with investment but saving money is not completely safe either.

Investment is not just about making profits but to at least keep up with inflation. For over a long time now, stocks have historically outperform bank savings even when you consider inflation. The issue is that some people think investment is all about cryptocurrency but it is not.

[mamesso]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

The economic crisis is a big problem in the implementation of saving fiat money for the long term, such as preparing for retirement funds. Fiat money can cause loss of wealth because its value can be eroded by inflation. For example, if inflation is 7.5% in a year, then in the next decade the cost of living will increase and the value of the money you save will be much lower than when you first saved.

It should also be noted that fiat money will have a negative impact on output in the economy, besides that it is closely related to interest rate fluctuations which can change the balance of money in the economy. The interest rate can have an impact on reducing the value of fiat money in the future, causing the value of the money you save to decrease accordingly.

So, it is highly recommended that you invest the money allocated for retirement funds in assets such as buying real estate, land, gold and other non-fiat funds to save the value of assets from decreasing in value due to inflation. In conclusion, saving fiat money in the long term will have a negative impact from a macro and individual economic perspective.

[jrrsparkles]

I don't know where you guys live, but in exactly what country if you retire for example with $1000 per month at 65 your pension will be still $1000 even twenty years later, and it's not indexed by at least a bit under the inflation rate? I'm really curious in what system does this happens when it comes to a government pension like the EU model.

I never heard of a country where you get a fixed monthly pension and that value will stay like that till you die.

I live in Indonesia and the average person who retires from the government will find it very difficult to face life because the prices of goods continue to rise. The impact of inflation that I mean is because our currency continues to depreciate so that when the price of goods rises, pension money will not cover living needs and not to mention the costs of other needs such as children's education, health and so on. The money they earn from the retirement process will be as much as they earned while the price of goods continues to rise so that the value of the currency is no longer meaningful.

My parents are both government retirees and they are working hard to meet our family's living expenses. Because relying on pension money will not be enough to fulfill them, this is the reason that makes me say that if pension money is not used to develop other businesses it will make their lives much more difficult.

If someone is dependent on their pension scheme to live their life after their retirement then I am sure it will be a misery. One should start preparing for their retirement after 40 atleast or early as possible then invest then on different sectors from gold, real estate and possibly stocks and cryptos if possible or just go with the traditional ways that can ensure better future with their passive income via their investment portfolio.

[Mate2237]

You are only talking about retired people what about those who are not working? Those retired people were working so they are not having the feeling of poor or poverty in their service time but those who not not working were facing the challenges of the inflation from the outset. So they have taking inflation as part of their lives and whenever it comes they face it and over come the difficulty and move on.

Now that cryptocurrency has come let the workers in their active service time should invest in bitcoin so that before they will retired, they have saved enough to face the inflation in the society. Preparation is better than being idle.

[dezoel]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

This is a problem because where i worked and resigned about 12 years ago, some percentage of our salaries were removed and put into a pension fund to be claimed when we reach certain older years, anyways since then my country's currency has devalued like 1000% till date. I frankly don't know if the pension fund company is going to pay me when I'll be eligible to collect in the old rate when I stopped work or in this current devalued rate, because I believe that they'll pay based on percentage, and it'll be very unfair to use the present devalued rate. If pensioners  retirement benefits are not calculated based on the value of their currency in every year of their services, then it's a cheating on them, because if it's done on the present devalued currency, then they won't get everything that they deserves.

He didn't say it isn't. What your company is doing with some of your salary seems normal and is experienced in other companies too, though I don't think this was the reason on why your country's currency's value have declined but this issue is common as well and it was called as inflation.

Each country is suffering from it. Don't worry about your contribution, as you are going to get them when you retire but I think you can also make an early loans once you already paid enough. Their rates are going to be the same. We can only hope that the inflation goes down, so that we can properly enjoy the money that we worked hard for many years.

[stompix]

The money they earn from the retirement process will be as much as they earned while the price of goods continues to rise so that the value of the currency is no longer meaningful.

Again, I'm asking you, if somebody retires now at 65 and gets 500 000 IDR he will also get 500 000 in 2044?
Because the OECD says they are indexed with the prices:
https://www.oecd.org/els/public-pensions/PAG2023-country-profile-Indonesia.pdf

Or asking you the other way around, somebody that retired in 2000, does he get the same pension as he got then?
Has your parent's pension NEVER increased since they retired?
I'm willing to bet the answer is no!

[WatChe]

Now that cryptocurrency has come let the workers in their active service time should invest in bitcoin so that before they will retired, they have saved enough to face the inflation in the society. Preparation is better than being idle.

Bitcoin is a good option to invest in as you continue with your job. Just have some money spared for Bitcoin every week or month (DCA manner) and you are good to go. If you see price chart of Bitcoin then it's very much clear that price has gone up with time and likely this will continue to happen with time. The way inflation is going up it will kill all the monetary benefits that one will be getting on his retirement in near future. It's better to plan accordingly.

[aylabadia05]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

Fiat has not been able to provide proof that the currency we use every day will not be a problem for us in the future. Those of us who still work to earn money and with the income from our work fulfill all our needs already feel that the value of currency has now decreased compared to when we received money from our parents.

At that time, the nominal amount usually given was enough to buy a few groceries, but now the nominal amount is no longer enough to buy two items.

For our children in the future, they will also face big challenges when we may be old or in retirement. If we can't think from now on, their future will be very difficult. How to invest and teach them to invest in investments that will not lose value.

[JunaidAzizi]

After retirement, a person's salary becomes half and the everyday expenses become higher and he can not fulfill it. These people experience a lot of hurdles in their lives as they are already older and do have not much energy to do another job. So in this case a person who saves money before retirement and makes a good investment spends a good life. Saving money can make it less because of the devaluation with time so they need to invest it in a thing that can increase the value day to day like Bitcoin, gold, or starting a real state work. They are work that does not decrease its value perhaps they increase it every year. So this is a secure investment that can help you in the last days of your life and is better than to store your investment in fait.

[kotajikikox]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

If inflation has become so bad then saving is of no use anymore.

Retirees should instead go look for other assets that would not devalue their money compared to if they just put it in the bank for savings. Unfortunately in time of inflation, everything else goes up which might affect the cost of living of these retirees.

[TEBTC]

Inflation surely will be a big problem to retired people who have no retirement benefits because everyday that passes inflation rate is increasing and the value of the currency is being reducing so if proper planning is not taken inflation is a big problem in the future to retired people

[el kaka22]

Well, this sort of depends on what their money is in. Just because people retire, doesn't mean that they get all their saved money in cash form, it is still in investment. Meaning, they do start to eat from it, so it is going to go down, but if they saved enough, and put it in a good enough thing, their money will actually go up every month even though they will withdraw money from it.

Imagine putting a million dollars into bitcoin today, even if you start to spend it, you are not going to finish it in 10 or 20 years, and most probably, the money will be even more by the time you pass away. This is why I believe that if they saved enough and if they invest smartly then we are not going to end up seeing anything major changing at all.

[Strongkored]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

Not only a problem for those who have retired but almost in all people who do not want to invest as soon as possible, thinking by work will be able to meet all needs including desires forever, even though they can lose jobs or if they continue to work, inflation will make all needs increase in price and slowly become it is difficult even just to meet the main needs because salary increases are not comparable to the increase in food and others.
This problem will increase in the future specifically for poor and developing countries, and also for people who do not want to invest, because only investments can help us to defeat inflation.

[moneystery]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

and because it is important for retirees to prepare themselves as best as possible to face economic difficulties. when they work, they should be able to set aside some of their money for investment and savings. and then after they receive the compensation money (in my country this is usually received before retirement) they can use it to build a business, whether it's an MSME or reinvest in the market if they don't want the hassle of running a business. In this way, retirees can fight inflation in their country.

[EarnOnVictor]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

I like your first statement that acknowledges the plague of inflation on the retirees, there is nothing good about inflation, except for those who are using the advantage to make more money. Inflation affects everybody no matter what they do, especially times they are no more earning so much from the government or their old employees (depending on the country). In this sense, they would feel it much to the point that they wish they had done things differently when they were young. Even if these people plan for their retirement very well, inflation will devalue the money they saved in decades, which is very bad.

You can imagine in my country, if I view this roughly on average, the retirees who had saved for more than 30 years would have their money devalued by more than 1000 now. This is pathetic and speaks of a country that never plans for its future. Going forward, of course, it would be worse because I have not seen anything rising in price in my country that reverses itself anymore.

[Wexnident]

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

I mean if we just based it on the past then yea. It's also painfully obvious due to how much the older generations keep on emphasizing how "when I was your age I already had a house and a car" type of talk which almost always happened with family gatherings in the past. Ofc this assumes that the money they receive from outside sources isn't protected from inflation, e.g. just sitting in their bank with no purpose whatsoever. 

There's definitely going to be people who's going to  let their money be affected unknowingly though since there's probably at least 2-3 out of 10 people that wouldn't know how inflation works in the first place.

[topbitcoin]

Inflation will present its own challenges, and it is possible that for those who rely on pension funds to meet their needs, with prices of basic commodities continuing to increase, they will have difficulty making ends meet. Unless they have other income, such as having an investment or business that can be relied on and generate profits.

But it's not too late, at his advanced age and with all the limitations that exist, perhaps at that age it will be quite difficult for him to earn money, especially if he has to work relying on physical strength. Regardless of the amount of pension funds he receives, and all the needs that must be met. In situations like this, living frugally and being willing to set aside a little money to start investing is the solution. because at least by investing, he will have a small advantage to face challenges in the future. Even though there is a child, who might be able to rely on it, I think being able to have our own income is much better, rather than depending on other people for our lives, even if it is our own children.