The first sentence really bothers me, the term "fixed income " is almost always inaccurate and only serves to stir emotions. As the article goes on to say, social security, which almost all retirees get, is not fixed, it is adjusted for inflation. And retirees who better provided for themselves by saving/ investing typically use some spending algorithm like the "4%" rule which adjusts for inflation. You average 6% or 7% returns, inflation averages 3%, your principal thus increases 3%, so the next year's 4% is bigger, adjusted for inflation. The term fixed income is an anachronism. Just used to stir emotions.
How much does high inflation really affect retirees?
The first sentence really bothers me, the term "fixed income " is almost always inaccurate and only serves to stir emotions. As the article goes on to say, social security, which almost all retirees get, is not fixed, it is adjusted for inflation. And retirees who better provided for themselves by saving/ investing typically use some spending algorithm like the "4%" rule which adjusts for inflation. You average 6% or 7% returns, inflation averages 3%, your principal thus increases 3%, so the next year's 4% is bigger, adjusted for inflation. The term fixed income is an anachronism. Just used to stir emotions.