Retirement | Medicare & a NFL Tea Party

It Could be Worse: There’s no denying the difficult effects of increased inflation on personal households in the United States. But among the headlines this week was the astounding inflation in Argentina. Argentina’s central bank raised its main interest rate to 69.5% as it tried to contain soaring inflation. The bank put up its 28-day benchmark rate by 9.5% percentage points, its second hike in as many weeks. “The rise in the policy rate will help reduce inflation expectations for the remainder of the year,” the bank said in a statement. The country’s inflation rate is forecasted to top 90% by the end of the year. Economic hard times to say the very least.

Retiring in a Downturn: No doubt about it, retiring in a downturn is challenging. It can be hard to remain optimistic that everything will work out in the end. It seems as though everything is at stake, and nothing is certain. And to some extent, that is true, perhaps, always true. Recently, T. Rowe Price peered into the past half-century to see how people who retired during different downturns fared, even during periods of high inflation. The good news: their portfolios performed well despite their experience with inflationary circumstances. The not-so-good news: there are, of course, zero guarantees. The study is based on the widely known ‘four percent’ rule of thumb. Retirees who withdrew four percent of their retirement portfolio balance in the first year and then adjusted that dollar amount for inflation each year thereafter were able to have a ‘paycheck’ that lasted thirty years.

Medicare and Drug Prices: The Inflation Reduction Act passed in the House. With it, we will see the reduction of drug prices for Medicare beneficiaries. The Act specifically targets lowering drug costs, capping the out-of-pocket cost at $2,000/year for enrollees in Medicare’s Part D drug program. It will also penalize drugmakers who raise Medicare drug prices higher than the inflation rate and ensure that seniors pay nothing for vaccines, some of which—like the shingles vaccine—are quite expensive. The legislation is written with the goal of reducing prescription drug costs for Americans covered by private insurance as well. Mandatory rebates for higher-than-inflation drug price hikes will start in October. Other benefits will take longer to kick in.

Business Briefing

• Stocks Rise: Markets rose early on Friday after a better-than-expected inflation reading, putting Wall Street on track to finish the week with gains. The Dow Jones Industrial Average and the S&P 500 were up 0.4 percent, with Nasdaq futures up 0.5 percent. (The Wall Street Journal, CNBC)
• China De-Listing: On Friday, several China state-owned companies delisted from the New York Stock Exchange. China Life Insurance, oil giant Sinopec and several other companies announced their plan to keep their listings in Hong Kong and mainland China markets but will apply to pull their American Depositary Shares from the NYSE. China and the United States have been negotiating to end a dispute over auditing rules that could get Chinese companies booted from American exchanges. (Reuters)
• Gas Prices: As you’re likely aware, the average U.S. price of a gallon of gas dipped below $4/gallon for the first time in five months, AAA reported on Thursday. By mid-June, gas prices were reaching $5.01 in some places but had been steadily dropping. Here’s to filling the tank for under $100! (USA Today)

NFL Tea Party: While we don’t promote being Green Bay Packers fans (E-A-G-L-E-S!), this moment is pretty incredible. During training camp, Packers players had an imaginary tea party with one of their smallest fans, Aria Rubens. Check out the special moment here.