Eggs and Nest Eggs
My friends at AARP were the first to let me know that my monthly stipend from taxpayers by way of Uncle Sam will increase by 2.5% beginning in January. The retiree advocate gives some laughable context, “The 2025 cost-of-living adjustment (COLA) is the lowest since 2021, reflecting a continued cooling of inflation following a surge in consumer prices during the COVID-19 pandemic.”
Rob Williams, managing director of financial planning at Charles Schwab, told AARP, “Some may feel the increase for 2025 is low relative to the inflation they feel in their pocketbooks,” Williams says. “Still, it’s a welcome increase that builds on a 5.9 percent increase in payments in 2022, 8.7 percent in 2023 and 3.2 percent this year.”
This week’s CPI reading remained higher than the securities markets were hoping because of the price of an important source of protein for seniors, eggs. CNN reported, “Egg prices spiked by 28.1% in August from 12 months ago, easily the biggest increase out of any food item tracked by the Bureau of Labor Statistics.”
Birds are coming down with bird flu, leading to a shortage of birds and inturn eggs. The CDC says bird flu has impacted over 100 million birds since 2022.
“Think about how they are housed: small spaces with lots of chickens,” said Phil Lempert, a grocery industry analyst and editor of SuperMarketGuru.com.. “When one chicken gets bird flu, they’ve got to cull the entire flock. That’s the problem.”
The five biggest egg companies control between 36% and 40% of all egg-laying hens in the United States, according to a recent report by Farm Action, a group that fights corporate control of the food system. Farm Action believes Big Egg uses supply shocks like Bird Flu to keep egg prices high, forgetting that consumers can substitute with other proteins or simply abstain.
Referring to people on food assistance, Lampert said “Going from $2 per dozen eggs to $4 or $5 is a big jump on a tight budget. When prices are high, I worry this population may not be getting enough protein.”
Maybe a bigger issue for retirees comes under the AARP article subtitle “Funding Shortfall on the Horizon.” Social Security now has to tap into their trust funds to pay current benefits. “Social Security’s trustees project that the trust funds will run short by 2035 and the program will only be able to pay 83 percent of scheduled benefits, unless Congress acts to stabilize the system’s finances,” reports Andy Markowitz for AARP.
The key words being “unless Congress acts.” If and when Congress does act, it will be young workers who will feel the pain financially, with little hope of collecting the money they pay in. For current retirees with only social security as their nest egg, the price of eggs is not their biggest problem.
