An article in AOL Daily Finance explains why many retirees can’t keep up with inflation:
“Last fall, Social Security recipients got their first raise in their monthly benefit checks since 2009. Yet, if you’re like most people, watching the prices of the things you buy go up all the time makes the government’s inflation gauge seem out of touch.
But there’s a good reason why the government’s estimates don’t match up with your experience: They aren’t designed to.
Like any statistic, the Consumer Price Index, which measures inflation, is only as effective as the assumptions it makes — in this case, about what you spend money on. If you spend more on certain things than most people, then the CPI will do a terrible job of reflecting the prices you actually pay.”
Find out why and what you can do about it: