For Aging Americans, Rising Prices Will Take an Even Bigger Toll

Worried about inflation? It may be an even bigger danger than most of us realize.

That's because the American population is aging. The Baby Boomer generation is heading into retirement. And inflation for older Americans is considerably higher than it is for the rest of the population.

This is an underappreciated topic. There isn't much research on it. People usually talk about the average inflation figure, the Consumer Price Index.

But common sense, as well as official statistics, tells the story.

Look, first, at the products where inflation in recent times has been lowest, such as high-tech gear, and clothes.

In both areas, prices are actually falling, and have been for years. Last year's computers are on sale. Even the hottest product in recent memory, the iPhone, has had its price slashed. Through January, reports the Bureau of Labor Statistics, information-technology prices fell around 6.2% on average, and

WASHINGTON (AP) -- The economy has weakened since the start of this year as shoppers turned even more cautious given the severe housing slump and painful credit crunch.

Manufacturers and other businesses, meanwhile, had to cope with skyrocketing prices for energy and other raw materials. The businesses' ability to pass along higher prices to their customers was mixed, according to the Federal Reserve's new snapshot of nationwide economic conditions released Wednesday. Oil hit jumped to a record of $104.52 a barrel.

Many economists fear that the country is teetering on the edge of a recession or is in one already.

"Economic growth has slowed since the beginning of the year," the Fed reported. Two-thirds of the Fed's 12 regions "cited softening or weakening in the pace of business activity, while the others referred to subdued, slow or modest growth," the Fed said.

The report suggested that persisting problems in the housing market and harder-to-get credit are affecting the behavior of individuals and businesses alike -- making them think twice about spending and investing.

Wall Street investors took the news in stride. The Dow Jones industrials gained 41.19 points.

Lying in a hammock or perfecting the old golf game for 20 years might seem the ideal retirement to baby boomers at 3 p.m. on a hectic Wednesday, but it will likely lose its luster after a few years.

Unlike their parents, baby boomers have plenty of healthy years ahead of them once they reach 65, thanks to modern medicine. Add to that the shortage of skilled employees in the workforce, and baby boomers have the option of working through what was once considered the traditional retirement years.

Since trudging to the office until age 85 sounds horrific, the question is: What will an enjoyable and fulfilling retirement look like? In her new book, Retire Retirement: Career Strategies for the Boomer Generation, Tamara Erickson explores boomers' options and offers guidance for achieving them.

Ideally, the workplace will be flexible and boomers will work on a project basis as opposed to five days a week from 9 to 5. Or it will be a time when they can explore a second or even third career. But the key is to start planning now.

"Most people have not gotten their head around the idea of the next 20 to 30 years," says Erickson. "When you ask most people what they're going to do when they retire, most people are lucky if they can

WASHINGTON (AP) -- Battling a dangerous wave of home foreclosures, Federal Reserve Chairman Ben Bernanke called Tuesday for additional relief and urged lenders to help distressed owners by lowering the amount of their loans.

"This situation calls for a vigorous response," Bernanke said in a speech to a banking group meeting in Orlando, Fla.

Even with some relief efforts under way by industry and government, foreclosures and late payments on home mortgages are likely to rise "for a while longer," Bernanke warned.

Rising foreclosures threaten to worsen the problems in the housing market and for the national economy, which many fear is on the verge of a recession or in one already.

"Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole," Bernanke said. "Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done," the Fed chief said.

One of the suggestions Bernanke made was for mortgage and other financial companies to reduce the amount of the loan to provide relief to a struggling owner. "Principal reductions that restore some equity

SINGAPORE (AP) -- Oil prices held steady Tuesday in Asia after blasting overnight to a new record near US$104 a barrel and then falling back.

Oil futures -- propelled by the weak U.S. dollar -- climbed past US$103.76 a barrel Monday on the New York Mercantile Exchange, breaking what many analysts consider to be the true record high for oil after the US$38 per barrel price from 1980 is adjusted for inflation.

"Every other day, we've got a new record," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "It's due to the phenomenon of investors getting into commodities, the hard assets, to find a safer haven and a hedge against inflation."

On Tuesday, light, sweet crude for April delivery rose 19 cents to US$102.64 a barrel in Asian electronic trading by midafternoon in Singapore. The contract hit US$103.95 a barrel Monday before retreating to settle at US$102.45, up 61 cents from the end of last week.

Oil's most recent run into record territory has been driven by the greenback's slump against other world currencies.

"This surge in oil futures is primarily driven by the U.S. dollar's movements," Shum said. "The U.S. dollar (Monday) reached a record low against the euro in the entire history of the euro, and that has caused oil

There’s no magic number for how much income to live on in retirement. But Money Magazine’s Walter Updegrave offers simple steps to forming a personal strategy.

Question: I'm looking to retire in the near future and want to know how an "everyday" investor like me can develop a good strategy for taking income from my savings. Any advice? --Nate, Carbondale, Illinois

Answer: This is the single biggest issue facing soon-to-be retirees like yourself. How do you make that transition from building a nest egg for retirement to cracking that nest egg for everyday living expenses - and do it in a way that doesn't deplete your savings too soon?

I'm sure I'm not revealing any secret when I say that there's no single correct answer to this question. The strategy you develop should be tailored as much as possible to your specific circumstances - how much income you need, how long you think you will need it, the amount of savings and other resources at your disposal and how much risk you're willing to take that you could outlive those resources.

So I can't give you a customized plan. But if you follow these three steps - and then monitor your progress throughout retirement - you should be able to develop a retirement income strategy that works for you.

1. Estimate how much income you'll need: Relying on a rule of thumb like assuming you'll need 70%

Despite all the pain the U.S. dollar has endured in recent days, the greenback may still have further to fall before seeing any sort of relief, according to currency experts.

Driving much of the dollar's decline this week were tepid remarks about the U.S. economy by Federal Reserve Chairman Ben Bernanke, who hinted that the central bank would cut interest rates once again at the Fed's March meeting.

Those comments, combined with a number of troubling signs about the strength of the U.S. economy, helped send the dollar tumbling to multi-year lows against a host of currencies including the Swiss franc, the Malaysian ringgit and Japanese yen.

"It all points towards a weaker U.S. economy and currency traders don't want to be exposed to that kind of risk," said Gareth Sylvester, senior currency strategist and self-described "dollar bear" at HFIX Plc in San Francisco.

But perhaps the most notable move of the week was the dollar hitting successive all-time lows against the euro, breaking the key psychological barrier of $1.50 for the first time since the 15-nation currency was launched in 1999.

Currency experts, however, argue that the dollar will remain under pressure at least through the next