Some people hate buying food. They think it is boring, a weekly drudgery they would rather avoid.

Not me. I think buying food is fun. I enjoyed doing it in 1960 as a college student. I enjoyed doing it in the 70s as a young father. And I enjoy it today, trying to figure out what to cook for empty nesters subject to invasion by teenage grandsons. The idea that a true cornucopia of food choices is simply waiting for the arrival of my cart gives me a big rush. There are days when I actually get giddy.    

In fact, I put the most recent supermarket receipt in my pocket only an hour ago, all of $90. That $90 bought fresh raspberries, blueberries, strawberries, limes and bananas. It bought two kinds of lettuce and some salad dressing (even though I usually make it myself). It also bought the made-on-the-spot guacamole that H.E.B. does so well, two prime New York strip steaks, some high quality Parmesan cheese, milk, two kinds of cereal, and a bunch of other things too long to list. Yes, more will be spent during the week, but it won’t be another $90. Quicken tells me we’ve averaged about $161 a week so far this year.

Food is one of the great bargains in America.

According to recent Department of Agriculture figures, a family of two over age 50 can be well-fed spending $158.40 a week for food at home. Pinch a bit and the USDA “moderate cost” plan gets it down to $131.60. Squeeze still more and the bill will shrink to $106.30 for the “low-cost” plan and $82.40 for the “thrifty” plan.

In spite of all that, it is becoming more and more difficult for retirees to afford to buy food from their savings. Actually, that’s a gigantic understatement. If you were trying to buy food from the interest paid on your savings accounts, you would have to be rich. Not top 1 percent rich, but pretty close.

This is not hyperbole. It is a fact, one that puts the absurdity of the Federal Reserve zero interest rate policy in harsh perspective.

How do we get from the supermarket to what they call ZIRP in the cake-eating Versailles known as the District of Columbia? Easy. Figure out how much you need to have on deposit in one of our coddled banks to earn enough interest to buy a week’s worth of groceries.

Here’s how you do it. The USDA “Low-cost” plan for a week of groceries was $106.30 in June. In the same month the Federal Reserve Bank of St. Louis figure for the yield on the average one-year bank CD was 0.19 percent. Divide the weekly plan cost by the yield figure and you get $55,947. That’s how much you would need in a one-year CD to buy one week’s worth of carefully chosen groceries. This makes no allowance for state and federal income taxes that you’d have to pay on interest income, so it’s conservative.

Now, multiply that $55,947 by the number of weeks in a year and you get… are you ready?


That’s how much you would need to have in CDs to eat for a year, providing you could keep your food costs in line with the low-cost food budget. You would have to nearly double that $2.9 million if your taste in food is closer to the $158.40 a week “liberal plan.”

While food is cheap in the absolute, it is nearly priceless when measured by what our savings earn, all because of a policy that has been supported in both Republican and Democratic administrations.

Back in 2001 the Low-cost food budget required $75.40 a week and a 1-year CD earned 5.13 percent. As a consequence, only $1,470 in savings would support a week of food. A nest egg of $76,440 would keep a retired couple fed all year round.

So just how high on the hog would you need to be to afford the USDA Low-cost food budget from your savings? Try this. If you compare the $2.9 million figure to my recent Wealth Scoreboard figures, you’ll see something amazing. Only about 5 percent of all people 50 and older have a net worth that high.

This is neither sane nor acceptable.

Want to read more on this issue? Here are links to earlier columns.

The Solvent Senior Chronicle