Those Were the Days

1979 – Happy Days was a popular TV show, disco clothes were in, and a top tune was Y.M.C.A. by the Village People. My husband recently relived all these memories at his 35th high school reunion for the Class of ’79.  I got dragged along, but at least the classic rock and disco tunes were fun to listen to. 

What I found most interesting was the “How It Was” board someone had put together with prices from 1979:

  • 3 bedroom home: $62,900  (in Baltimore County, MD)
  • Average income:  $22,178
  • New Ford: $6,474
  • 1 gallon of gas:  $.86
  • Loaf of bread:  $.50
  • A gallon of milk:  $1.61
  • 1 pound of bacon:  $1.78

So how do these compare to prices today?  At first, I thought bacon hadn’t gone up much, until I realized I normally buy it as ½ a pound.  In fact, according to an LA Times article, the price of bacon has increased 41% in just the last decade, even when adjusted for inflation.  Here’s the updated figures for 2014:

Hold the bacon!  With the average income not even doubling, bacon’s not only bad for the waistline, it is apparently tough on the wallet so if you have a high school reunion coming up, lay off on the bacon.

For the class of ’79, retirement is about a decade away.  Since prices for food and gas have increased two to five times in the past 35 years since graduating but average pay hasn’t even doubled, Dave’s classmates need to consider how inflation will impact the cost of living over the next 35 years, taking them to the average life expectancy at 65 of 85 for men and 88 for women.  It is extremely important to have enough growth potential in a retirement account to offset the risk of inflation so whether you are invited to your 5 year or 50 year high school reunion this year, I invite you to take this Risk Tolerance and Asset Allocation worksheet and make sure your investments are properly allocated for growth so your retirement will be Happy Days.

 

 

 

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