Here’s How Many Boomers Say Inflation Is Their Top Concern This Election

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As the 2024 presidential election fast approaches, many Americans are debating how their votes will affect the economy. Like in other election years, economic issues are top of mind, and this year inflation is a particularly big concern.

A GOBankingRates survey found that 17% of those 65 and older said inflation is the top personal finance issue they find most important this year. By a slight margin, this age group was the most likely in the survey to see inflation as the top issue.

“Those that are 65 and older have had their highest earning years and their income is now winding down or is leveling off. Inflation will affect them more than younger people who might be able to get more raises and grow their incomes beyond inflation,” said Karla Dennis, CEO and founder of Karla Dennis And Associates Inc., an accounting, tax and small business services firm.

Similarly, another 33% of baby boomers feel that cost-of-living increases are most important. That’s not as high as some other age groups, but it still means that half of boomers see either cost-of-living increases or inflation as their top concern in 2024. Another 38% see changes to Social Security as most important. Yet these issues are often interconnected.

And when you add in the upcoming election to these circumstances, many people are on edge.

“Many are likely receiving Social Security benefits, and if that makes up a significant portion of their retirement income, their standard of living might be negatively impacted in an environment where inflation is high or increasing. The additional circumstance of this being an election year could add to the concerns of those 65-plus because with the outcome of the election, it could mean future legislation that might impact them negatively,” said Urban Adams, investment advisor at Dynamic Advisor Solutions. 

“Just the uncertainty alone could be concerning,” he added.

Adapting To High Inflation

Although inflation has come down from when it peaked past 9% in mid-2022, it has remained relatively high for longer than many expected, and the more it continues, the more that boomers will face challenges.

“True inflation is an income reduction to fixed-income retirees who have no way of making it up unless they get another job. It isn’t necessarily just because of an election year — it just happens to be occurring during an election year. Inflation will always be a concern to the retirees,” said Aaron Cirksena, founder and CEO, MDRN Capital.

That said, there are ways to adapt to high inflation so that boomers can stretch their money further.

Spending

As costs go up, perhaps more than what cost-of-living adjustments (COLA) to Social Security cover, boomers may need to reevaluate the expense side of the equation.

“Boomers have to be really mindful of their spending. Do not spend beyond their means using credit as a stopgap. They should focus on cash and carry. If you cannot afford it now chances are you won’t be able to pay it off later,” said Dennis.

Specifically, you may need to take a closer look at where your money goes so you know what you can cut back on and what’s within your budget. Consider cutting back on areas like travel, subscriptions for things like streaming services and other nonessentials like alcohol and eating out, suggested Cirksena. Also, “buy groceries in bulk.”

Investing

Baby boomers may also be able to adapt to high inflation by reevaluating their investments. Doing so could potentially offset rising prices, at least in part.

“Regardless of what happens with the election, one way that boomers could better manage inflation would be to review their investment portfolio allocation. While staying within their comfort level for short-term volatility, they may wish to review how well their portfolio might be expected to perform, relative to a potential long-term inflation rate,” said Adams.

“If the return they might reasonably expect from their portfolio long term is less than the long-term inflation expectation, they could see erosion in the spending power of their portfolio over time,” he explained.

Overcoming this risk might include steps like shifting more into assets like inflation-linked bonds. Some boomers might also be willing to up their equities allocation a bit in the hopes that higher inflation also boosts stock prices, such as by bolstering corporate profits.

Overall, inflation looks like it will be an important election issue for boomers this year, but it’s not the only concern on their minds. Other interconnected areas like Social Security are also likely to play a role this election. But even if the candidate you want doesn’t win, there are ways to try to tame inflation as it pertains to your own life, such as by buying less to offset higher prices or by adjusting your investments to mitigate higher inflation.

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