4 Ways Older Americans are Hurting Financially - HECMWorld.com Skip to content

4 Ways Older Americans are Hurting Financially


Which demographic group is hurt the most by the Federal Reserve’s series of interest rate hikes and inflation?

If you answered older Americans you would be correct. Here are four ways our older neighbors and friends are suffering in today’s economy.

#1 Purchasing a home

While older homebuyers are a smaller slice of the purchase market, many have a need or desire to either relocate or right-size during their retirement years. But there’s a catch thanks to the Federal Reserve’s measures attempting to lower inflation. Higher interest rates.

A single percentage point increase in home mortgage rates pushes out 16% of low-income borrowers according to a recent Federal Reserve Board working paper. Some homeowners over the age of 62 could possibly use a HECM for Purchase to close the gap. Nevertheless, the odds are most are either unable to get a reverse mortgage, or unfamiliar with the loan and consequently will be pushed to the sidelines due to a lack of affordability. 

Food inflation is especially devastating to older Americans who are on a fixed income.

However, more significant problems loom for today’s American retirees, most of which are related to daily living expenses. 

#2 Repairs

Most retirement planning is focused on meeting monthly expenses. But what about those unexpected lump-sum expenses such as replacing an aging HVAC system or purchasing a vehicle? MSN noted in a recent column that one trick economists recommend for housing costs is to budget 1% of your home’s total value for annual repairs and maintenance. For example, the owners of a $400,000 home should allocate $4,000 annually for potential unexpected purchases or repairs.

#3 Food
The U.S. Department of Agriculture’s 2023 forecast for food prices is stark. The agency predicts that food prices could be…


10% higher than they were in 2022. “Food prices are expected to grow more slowly in 2023 than in 2022 but still at above-historical average rates,” the USDA’s Food Price Outlook said in late March. Eating out will cost more as well with the USDA forecasting an 8.3% increase. While the rate of inflation has somewhat slowed, food prices continue to climb.

#4 Medicare

Workers who were fortunate enough to have health insurance benefits as part of their employment are likely going to have to foot the bill. The average Medicare premium for the standard part B is $164.90 a month, Part D runs about $49 a month, and typical supplement plans run about $155. For a single individual, health-related premiums can take $400 or more out of their monthly budget.

A lifeline

Money Magazine reports that since 2000 American seniors have lost 40 percent of their purchasing power, much of that in the last year. How in the world do older Americans cope? In several ways. Many choose to work longer while some are deciding to return to the workforce. Others are turning to the ‘gig economy’ taking jobs delivering food and other staples. Not surprising considering the uncertain economy and inflation. The tragedy is many older homeowners simply ignore or have misgivings about another potential solution that could allow them to enjoy their retirement without the burden of employment- a reverse mortgage.


Editor in Chief: HECMWorld.com
As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
Readers wishing to submit stories or interview requests can reach our team at: info@hecmworld.com.

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  1. I like all the things your company is doing in promoting and defining the benefits of reverse
    David blatt

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