Baby Boomers, Inflation, and Retirement
“Boomer Got the Vax?”
What the Viral TikTok Teaches Us About Retirement & Inflation
You might recognize this phrase from the viral TikTok by the account @oldgays, which features friends Jessay, Mick, Robert, and Bill enjoying the golden years of retirement in Palm Springs. They’re stumped by this question until they realize it means “Baby Boomers got the (COVID-19) vaccine.” The ensuing back-and-forth—like all their videos—is charming, hilarious, and delightfully chaotic.
As we celebrate the LGBTQ+ community this month and reflect on the 1969 Stonewall Uprising in NYC that inspires today’s Pride Parades, we also recognize that many of those early Pride participants are now approaching their 70s.
Today, there are more than 39 million seniors (65+) in the U.S., and about 2.4 million identify as LGBTQ+. These Baby Boomers—like the beloved stars of @oldgays—represent more than 20% of the population and are quickly approaching or already in retirement.
With that in mind—and our recent discussion about inflation in this month’s NEST Edge webinar—we took a look at how inflation affects retirement planning.
An Overview of Inflation
Inflation is the increase in prices for goods and services. For example, if inflation is at 10%, a candy bar that costs $1.00 today will cost $1.10 next year.
In the U.S., inflation reached a high of 23.70% in June 1920 and a low of -15.80% in June 1921. The Federal Reserve currently aims to keep inflation at around 2% annually. However, this year, the Bureau of Labor Statistics (BLS) reported inflation at 4.2%—the highest since 2008.
We’ll leave it to you to decide whether the Fed's data is apolitical, but if they used the same method from the 1980s, inflation this year could be closer to 11%.
How Does Inflation Affect Retirement?
Inflation decreases your money’s purchasing power over time. At a 3% inflation rate, $100 today would only be worth $67.30 in 20 years.
Meanwhile, healthcare, insurance, and long-term care costs are all rising. That’s partly because of increased demand for providers and facilities as more Baby Boomers enter retirement. To make things more complex, long-term care insurance is becoming harder to navigate, with insurers seeking approval to raise prices for existing policyholders.
A financial advisor can help you plan for retirement costs—including caregiving—based on your health, living expenses, and lifestyle goals. They’ll guide you in generating enough cash flow through high-yield investments, reallocating assets, or other custom strategies.
Gloria and Dan can run personalized projections that factor in inflation, taxes, long-term care, and other retirement realities—so you can worry less about your future and focus more on enjoying it (and yes, racking up those TikTok likes).
DISCLAIMER: We are here to inform you with real, non-biased financial planning education. This content is for educational purposes only and should not be considered investment or financial planning advice. For help with your unique goals, contact us at info@nestfinancial.net.