The older people on fixed-income pensions gets hurt by unanticipated inflation as there is an inverse relationship between interest rates and fixed-income pensions.
Explanation:
Inflation rate plays a significant role on the financial lives of old Americans with fixed-income pensions. Inflation occurs when unemployment rate decreases and prices of goods, real estate, and commodities creep higher.
According to 2010 research, Old citizens of America spends three times than a working adult and five times that of children, averagely $18,424 annually.
Healthcare, housing, travel, and supporting children also influence how much seniors spend. Unanticipated inflation affects the purchasing power.
