An important part of the transition into senior citizenry is learning to lament being on a “fixed income” as though it’s a cross between indentured servitude and guaranteed poverty.
Growing up, I heard “fixed income” often, especially from my paternal grandparents – he being a retired employee of the Pennsylvania Railroad and she having been a stay-at-home wife.
But the whole “fixed income” label is meaningless without context, sort of like Obama’s hope and change. One can hope for vile things, which isn’t a positive for society. As for change, going from rich to poor, healthy to unhealthy, employed to unemployed all are changes, but are they really desirable?
We got a lot of change under Obama and little of it was beneficial.
In reality, most working people can be said to be on fixed incomes. With the exception of those on commissions or other incentives, they don’t have the option of giving themselves a raise, short of getting a second job. More on that later.
A person collecting a pension of $500,000 a year could be said to be on a fixed income. Should they be whining as if it meant they were poor? Not really; at least not in my neighborhood.
Even with the typical much lower retirement payments, the fixed income tag doesn’t begin to factor in that things such as Social Security and some pensions aren’t really fixed at all, including as they do the opportunity for annual Cost of Living Adjustments (COLAs). My Social Security annual payment since I retired has witnessed COLA increases totaling 23.5 percent and the increase in my direct deposit due to those has been greater than that figure because each successive percentage increase comes on a larger base.
My pensions, pathetically small as they are cumulatively, do not have COLAs. Since they are such chump change, it really doesn’t matter.
Another aspect of Social Security, often glossed over by the fixed-income crowd, is that the government retirement plan never was designed to fund retirement in total. The preferred metaphor is a three-legged stool of Social Security, pensions and individual savings as being the financial support for retirement.
When I decided newspapers were in general decline and no longer enjoyable places to work, I began cramming 20 percent or more of my annual pay into my 401(k) to facilitate early retirement. That was my combination savings/pension to add to the Social Security of me and my wife.
This, and a pathetically small buyout offer from Tribune-Review Publishing (a half year’s salary and a full year of subsidized medical care), allowed me to retire in March 2009 at the relatively young age of 53 years and change.
Note, at that age I didn’t qualify for Social Security or pensions and we were in the years before the Affordable Care Act so my medical insurance cost me and my wife more than $1,500 a month once that year of subsidized care expired. Also any withdrawals from my retirement savings came with a 10 percent penalty, plus taxes.
I do not recall whining about being on fixed income, or eating dog food to save money. I did work some part-time or seasonal jobs, including one that required me to get a health insurance license and provide support to customers from various out-of-state providers such as Blue Cross of South Carolina.
It can be done. I know, because I did it. This makes me a tad less than sympathetic to those who automatically equate the so-called “fixed income” with poverty.
My costs for food, utilities, energy are going up, just as yours are. The admittedly small premiums I pay for the Medicare prescription drug plans for my wife and me doubled in 2024.
This inflationary trend is, in part, the legacy of politicians of both parties spending first and wondering how to pay for it all later. It’s a legacy of a Federal Reserve enabling such things with excess money creation and near-zero interest rates that it kept in place for too long to facilitate fiscal overspending by the government and the populace.
Regardless of all that, my point is if you are retired, or looking to retire, and failed to save for that event, shame on you. Don’t bemoan so-called “fixed income” for your plight.
Sam Ross Jr's site 