Retirement Nightmare: Falling Interest Rates, Rising Prices On Almost Everything.

Do you think our economy is booming? Do you think life is good? I don’t on both counts. Homelessness is on an all time rise. Long time, well-established businesses are closing daily. Yesterday, Barney’s, a century-old icon of America’s luxury men’s apparel, announced they were filing for Chapter 11 bankruptcy (click here). Sorry to be so pessimistic, but I just don’t see this great economy everyone is talking about.

The rich are still getting richer. And the poor just keep on getting poorer.

Barney’s is filing bankruptcy because they can’t afford to pay their rent anymore. Ditto for other large corporations such as Toys “R” Us, Radio Shack, Sports Authority as well as other clothing chains such as Gymboree, Charlotte Russe, The Limited and Sears. Thousands and thousands of people have lost their jobs? Where did they go? They may have gotten other jobs but I can assure you most of them are making less than what they were earning before.

Here in New York, we may have passed the $15 minimum hourly wage but because of this added increase many restaurants are closing (click here). The hourly rate rise has caused a mini-recession. Business owners are cutting hours. Almost no one can work overtime anymore. The cut in staff creates problems for the workers who remain. It’s a lose-lose situation. Restaurants were forced to raise their prices. A lowly hamburger will now set you back $12. In turn, many people have stopped going out to eat which has now caused double trouble to restaurant owners. Throw in the sky high rents of New York and is it any wonder that our homeless numbers have increased?

It used to be that the homeless were either bums, alcoholics or drug addicts. Not any more. Many homeless today have full time jobs. They just can not pay the ever increasing rents and housing costs. Not even on the so-called $15 an hour minimum wage. Just like those big corporations listed above, human beings are slowly going out of business.

This blog, however, is about retirement. What does Barney’s fate or the minimum wage have to do with us retirees? Plenty. The Feds have cut the interest rates (click here) and because of this new thing called ‘tariffs’ we retirees have been hit with a double whammy. We can’t earn much interest on our money anymore and we have to pay more for what we need with our slowly dwindling financial reserves. We retirees can cut all the corners we want, we can go without, we can live on less but eventually we have to pay the piper or wind up on the streets. It might get worse. We might have to ask our children or our family members for help. Or do what most every retiree I have met over the last three years do: side hustle for some extra monthly cash. That’s what DH and I do. Don’t shrug and say it’ll never happen to you. Sure it will. The odds just aren’t in a retiree’s favor anymore. It’s all a matter of time.

reluctant working retiree.jpg
The reluctant working retiree.

True Story: Lucinda, a widow, age 90, has lived in the basement of her daughter for the past 25 years. She owned a condo but sold it 25 years ago despite being advised against it. Her daughter is now 65 and would like to retire. So, her daughter sold her home and moved in with a girlfriend. Where does that leave Lucinda? She moved in to a trailer, down the road from her oldest granddaughter, at $1795 a month. Lucinda’s only income is a $2500-a-month social security check plus she is in credit card debt to the tune of $10,000.

How’d you like to be Lucinda? At 90 years old? Her condo is now worth almost a million dollars. If she had hung on to it. Owning real estate might be a liability but when it comes time to sell your own home, especially in retirement, that liability can become quite a life-saving asset! One of the first things I always recommend to retirees, is to always secure a place to live. Renting puts you at the mercy of greedy landlords. See above. Most people, as well as top brand named corporations go under financially when they don’t own the property they reside or work in.

The only good point to the falling interest rates is that borrowing money has now become cheaper and easier. It may be wise to buy a home with a 3.5% mortgage BUT no one’s income is guaranteed anymore. Even the slightest blimp to your income can send you ducking for cover.

new RV.jpg
The decline in borrowing interest rates worked out that it was cheaper for us to borrow money to ‘buy’ our new RV (@3.99%) than pay cash for it outright. Our investments remain earning interest making borrowing smart. Our monthly budget increased $87 ($77 for the loan, $10 on insurance). We cut our cable (finally) to balance out the new monthly budget.

Keep monitoring your budget. Make cuts if you have to. I still say that having a side hustling job may be the ONLY way to deal with our ever changing economy. I still don’t think it’s great. Every month is a new agitation. We need to be spry and flexible. We need to keep cutting, doing without or replacing what we want with something we need. DH and I cut our cable. Again. We don’t watch TV anymore. Especially the news. We’re always on the internet streaming something. DH like motor shows. I love YouTube. We never go to restaurants anymore. Almost all our entertainment needs are met by local freebies. We stay at trailer parks with no amenities when we RV now. KOA and Good Sam prices are out in orbit. Even National and State parks are cost prohibitive.  We cut our yearly travel time down to three months a year vs five months.

Our food budget will take yet another hit. We thought we were immune from rising food costs by shopping at Aldi. Wrong. Almost everything there has gone up too.

aldi prices.jpg
Last week strawberries @Aldi were $1.29. This week they went up 15.5% to $1.49.


Live well, my friend and prosper. Live well. And prosper.


  1. Excellent post. We are following almost all of the recommendations that you make. We feel very fortunate in that we both have pensions as well as social security, but are still living as frugally as we can so as not to deplete our other resources. But as you said it is getting harder. We did sell our home two years ago to fufill a long time dream of living near the beach. We are currently renting and it is true that there is an uncertainty with that and we’ve been lucky so far. But at some point we need to decide where we want to land and make a permanent plan. Again all excellent advice .


    • Hi Retired. Thanks for your confidence in me. Living frugally as possible is the best thing all of us can do. Good job! If you are at a beach in Florida, watch the housing costs. Florida might get a dip in prices and if it does, you may want to pounce on it ASAP.
      Thanks for your comment.

      Liked by 1 person

      • As a Florida resident, I suggest you investigate the cost of windstorm insurance before buying. It’s very expensive depending upon where you live, the type of property, if it is up to windstorm code, etc. I suggest you understand the deductibles, etc. before even house shopping. Good luck!!


      • Also, I should add, if you live in an HOA community, the insurance rates are lower and more reasonable. If you reside in a stand alone home, you are going to pay through the roof literally. No pun intended. Florida isn’t such an inexpensive place to live after all IMHO.
        Yes, good luck! Thanks Maggie May!

        Liked by 1 person

  2. You made some wise choices in your life and you both are healthly enough to do some side hustles. Those hustles help you to pay some nicer things in your life. All we need is a roof over our head, food, and health care. We are lucky some politicians put in Medicare.

    True prices are going up on strawberries, but it is getting near the end of the season for them. When we were little strawberries were only available during June. Now we can buy them out of season.

    Spending patterns change as we have money and we age. My parents were able to go out to eat in their old age, but they were careful what they spent. It is the same for us now. Food is food and more expensive food does not mean it is of a better quality.

    Summer is expensive with the AC usage, but food is cheaper for us. The tomatoes are ripening and we had our first bacon and tomato sandwiches with our own grown tomatoes last night. I stock up on bacon waiting for this. Chicken salad, tuna salad, and egg salad are wonderful and inexpensive for lunches or suppers. Nothing can beat a hamburger or a pork chop grilled. We have been indulging in ice cream this summer, but there have been so many sales. I can get a container for $2.50 or $3.00. Cucumbers are free from our son’s garden.

    Many people made unwise choices in their lives. Sometimes they did it for what they thought were good reasons, but they have to live with the consequences. Living in a trailer is better than nothing.

    I am sorry you had to cancel cable, but maybe you are using that money for something else. Youtube is wonderful. We have a firestick that we use all the time. We mostly watch news, ball games, and British mysteries. The firestick has introduced us to fine movies. It sounds like you are still get well entertained.

    Enjoy the summer weather. Soon it will be winter and those AC costs will change to heating costs.

    Liked by 1 person

    • Sue, I very watch TV anymore. I used to keep the cable to watch the news BUT we don’t watch the news anymore either. I can read online what is going on in the world. I don’t need to watch it. We still have Netflix but we may switch over to Disney when they come on line. We are in to streaming now. For only $2.99 I can watch a current movie on YouTube. We just saw The Mule. I got it through my iPhone and then sent it wirelessly to our Smart Flat screen TV. Worked like a charm.
      We cancelled cable to balance out the added increase in our new RV ownership.
      Hubs and I realized this morning we have to start watching every single penny now. Things are expensive. WE just got hit with what our wintertime heating costs are going to be. UGH!
      Thanks for your comment.

      Liked by 1 person

  3. Everyone I know who wants to be employed, is employed. This economy is strong. Part of a great economy is that the rich get richer. It is what it is. I’ve settled comfortably into middle class- enjoy the things my tax dollars have paid for and spend time with the family. If someone is making more, they did something to get it. That is the advantage of being in a capitalist society.
    You must be making above the interest rate that was just cut 1/4 of a percent to make more on your investments then the 3.99% you just borrowed.
    $2500 a month SS means that 90 year old made some good money at one time of her life. I will not be close to that amount if my husband passes. .At 90- $700 after housing is a very manageable amount. She probably doesn’t have a car and doesn’t pay property tax.I’d rather be in a trailer then a basement anyway! My aunt and uncle lived in a trailer near their children for many years. I plan on a granny pod….
    Strawberries are out of season in most places in the east- the costs rise for out of season fruit. Look for peaches!
    Think positive. That is the key to enjoying life!


    • Janette, I’m looking for peaches!
      The 90 year old was a nurse supervisor and her SS is combined with some remains of her deceased husbands SS. No she doesn’t have a car. never learned to drive. Her husband drove her everywhere. Now, her granddaughter does. And no property taxes due either.
      I like the idea of a granny pod. I’d love one for myself if my kids ever owned a home with property. Both of them are in condos. Oh well.
      I hope I a thinking positively. I just don’t like any change. I wish things could just stay still for a while.
      Thanks, as always for your comment.
      We switched our investments into bonds. Non-callable and at a guaranteed interest.
      We used to be middle class. Not any more. I consider us to be high-low income people now. If that makes any sense. We’re low income but on the higher end. What an oxymoron! LOL!


    • But is everyone employed at enough pay to cove their bills? Does everyone have affordable health insurance or even access to mostly unaffordable health insurance? There’s the economy, and then there is how people are trying to pay their bills and survive, and maybe just maybe have enough to enjoy the one or two of the good things in life. I don’t begrudge the rich getting a little richer if it was done ethical and honest. I do resent rich people making policies and decision that benefit them at the expense of regular people just trying to live their lives. I can think very positive for myself, and my immediate family, but I work in an area where I see real people, hard working people, hit by one issue and they end up living hand to mouth or worse while trying to get through the worst. Don’t mind me though-I’m in the throws of seeing a family deal with the absolute shit that can happen in life, and financially, I don’t know how they will survive.


      • Hi Sam. It’s true. I see it too. Salaries have not risen as much nor as fast as prices. The middle classes, in order to stay middle class, are heavily in to debt.
        Hope the family you are seeing going through the worst, makes it OK to the other side.
        God bless.
        Thank you for your comment.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.