Archive for November, 2013

The Not-So-Hidden Cost of Inflation

Friday, November 8th, 2013

When Gladys retired from the phone company in 1997 at age 60, she was very happy with her $800-per-month pension and the $1,200 per month she was earning from certificates of deposit. Her monthly expenses were about $1,500, which left enough for an occasional trip.

Fifteen years later, Gladys is still collecting $800 per month from her pension, but only $900 a month in interest from her CDs. Her monthly living expenses now are $2,400, and she has been dipping into her principal to cover the difference. She’s justifiably anxious about outliving her money.