Soaring fuel prices driven by the West Asian war and the Strait of Hormuz blockade are straining retirees’ budgets.
Indian fuel is up by around Rs 7.50 per litre.
To avoid depletion of savings, retirees need to plan their monthly expenses and realign investments to beat inflation and protect their retirement corpus.
Rising Fuel Prices: What Should Retirees Do To Lower The Impact
The West Asian war and blockade of the Strait of Hormuz have caused the fuel prices to touch the sky across the globe. The Indian government has also increased fuel prices by Rs 7.50 per litre in consecutive moves. Retirees may feel financially squeezed if they do not adjust their lifestyle after the increase in fuel prices
Summary
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When you planned your retirement, you must have considered a certain level of inflation and ways to mitigate the related risks. However, the current scenario is not normal. The war in West Asia has caused a severe energy crisis; therefore, the fuel prices have increased by around Rs 7.50 per litre in India, and they may go up further in the coming months. An increase in oil prices impacts everything, such as food prices, electricity bills, the cost of services, etc.
Your retirement fund may start draining fast if you do not take proactive steps to overcome the impact of fuel price hikes. So, let’s check out some important steps that you can take to avoid financial distress in your retirement due to the fuel price hikes.
Plan Your Travel And Try Greater Use Of Public Transport
It’s important to plan your trips in advance so that you can try to arrange car pooling to save on fares. Instead of going to the market multiple times for different work, you can note down all the work and finish it in a single visit. You may switch to public transport for your regular trips. If you live in a senior living society, you can discuss with your society members to start a carpooling facility through the society’s common interaction app.
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Assess The Increase In Your Expenses And Its Impact On Your Retirement Corpus
It is better to assess the impact of the fuel price hike on your financials before you take measures to overcome its setback. Frequent travellers will be impacted immediately, while others will be impacted gradually as the price of the various commodities starts going up. A hike in fuel prices by 3 to 4 per cent may translate to a relatively higher increase in your regular expenses. You may track your month-on-month expenses to assess the rise in your expenditure, and accordingly, you can make gradual adjustments in your spending budget.
Save More By Cutting Discretionary Spending
It’s time to cut down on our discretionary spending, such as restaurants, clubbing, etc. Depending on your existing financial cushion, you may reduce the frequency of spending on discretionary items.
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Adjust Your Investment To Beat The Inflation
Inflation may inch upward as fuel prices go up, so you need to watch returns on your investments very closely. If the return on your investments is lower than the prevailing inflation rate, then you must consult your investment advisor and make necessary adjustments in your portfolio to generate a positive real rate of return.
You must not panic when you see prices going up around you. With the right planning and approach, you can ensure the safety of your retirement corpus and retirement goals.
The author is an independent financial journalist
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
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