Getting Off Lightly

I'VE BEEN A WITNESS to inflation with every trip to our neighborhood H-E-B grocery store. As various articles have pointed out, inflation can disproportionately hurt retirees. Yet recently I stumbled on a piece that argued the reverse, at least for some of us. I think my wife and I fall into that lucky category, and I’m curious if other HumbleDollar readers feel the same.

We own our home free and clear, so there are no rent increases to worry about and no mortgage to pay. There isn’t much we can do about the cost of home repairs and maintenance. But we’re in good shape when it comes to property taxes, thanks to generous homestead and over-age-65 exemptions. For our comfortable 2,800-square-foot home on a one-acre lot in a nice neighborhood, we pay $2,619 a year in taxes, plus our annual homeowners’ association fees are just $195.

As empty nesters, we’re only buying for two people. That’s quite a contrast to earlier years, when we were raising four kids. Food, clothes, transportation, school supplies, health insurance, dental and orthodontics expenses all made for a hefty domestic overhead.

Later, there were high car expenses, including maintenance and insurance. The liability quote for a teenage male driver will really get your attention.

And the grand finale—college—was a whole different order of magnitude. We treasure our kids and wouldn’t have done anything differently. But for a long time, we didn’t have much discretionary income.

We’ve always been dog people, and have never been without one and usually more. Not long ago, we had four elderly rescues with a variety of medical conditions. The cost of their health care and medications was pretty staggering. You know it’s bad when you have your vet’s phone number memorized. While inflation has affected vet prices, we’re down to one canine companion, and our vet bills have plummeted.

Now that I’m retired, my 48-mile roundtrip daily commute is history. My gas and car maintenance expenses are at lifetime lows. Moreover, when we do need to fill ‘er up, we luck out. I’ve read that some folks out west have been paying $7 a gallon for gas. I recently filled up here in Texas for around $2.50 a gallon.

During my career, I was a member of that shrinking dinosaur class who had to put on a suit and tie every day. That meant clothing and dry-cleaning expenses, even if I did find a way to mitigate the former by buying clothes on eBay. That necessity, too, is now gone.

We live in central Texas. While we make constant use of the air-conditioning in summer, our typically mild winters—if you don’t count the Great Freeze of February 2021—mean modest heating bills. We are all electric at our house, so there are no heating oil costs, either.

I no longer pay for disability insurance, since I’m no longer working, or for term-life insurance, since our kids are grown and self-sufficient. Our savings are enough to provide for my wife should I die first.

When I turned age 65, I celebrated—not my birthday, but my Medicare eligibility. When my wife recently also became eligible, our happiness doubled. In 2021, we had been paying almost $900 a month for her health policy. In August of that year, we began instead paying $170 a month for her Medicare, $104 for her Medicare supplement and $7 for her Part D drug plan. That’s a total of just $281 a month.

Finally, in retirement, a greater portion of our expenses are discretionary. These are things we would’ve avoided during our high overhead years but which we indulge in now. If we ever needed to cut back, we could.

It’s not just the expense side that’s been favorable during our golden years. While we’ve lost my employment earnings, there have been some nice pluses on the income side.

The main one is Social Security. I still can’t quite believe this gift that shows up in my bank account every month like clockwork. The second Wednesday of the month seems a little like Christmas. The potent inflation fighter is the cost-of-living adjustment, with a recently announced 8.7% increase for 2023.

Icing the cake, my wife is about to start her Social Security, which will be a spousal benefit. She’s waiting till her full retirement age of 66 and four months to get the maximum. If I predecease her, she’ll enjoy maximum survivor benefits, too, since I waited until age 70 to claim.

Our cash is earning more interest these days. The same goes for other fixed-income products such as certificates of deposit and Treasury bills. While it’s true that interest rates aren’t rising as fast as inflation, the loftier yields still look pretty attractive compared to the anemic returns of the past few years. Our other investments, especially stocks, while depressed at the moment, should be an excellent source of inflation protection in the long run.

I realize inflation is still passed through to us in myriad ways, no doubt taking a toll. Still, as I look across our finances, I suspect my wife and I are getting off more lightly than most.

Andrew Forsythe retired in 2017 after almost four decades practicing criminal law in Austin, Texas, first as a prosecutor and then as a defense attorney. His wife Rosalinda and he, along with their dog, live outside Austin, at the edge of the Texas Hill Country. Their four kids are now grown, independent and successful. They're also blessed with five beautiful grandkids. Andrew loves dogs, and enjoys collecting pocketknives and flashlights. Check out his earlier articles.

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