wiseradvisor

Keep an Eye on Inflation

Keep an Eye on Inflation Inflation has been tame for so long that it's easy to ignore it when planning for retirement. However, even inflation of 2% or 3% a year, over a period of many years, can seriously erode the purchasing power of your funds. At 2.5% inflation, $1 today will be worth 78 cents in 10 years, 61 cents in 20 years, and 48 cents in 30 years. To combat the effects of inflation on your retirement income, consider these tips:
  • Consider investment alternatives likely to stay ahead of inflation
    Thus, a significant portion of your portfolio will probably be invested in stocks, which have typically earned returns in excess of inflation.

  • Invest in tax-advantaged retirement vehicles
    Look into 401(k) plans, individual retirement accounts, and other retirement vehicles. While each has different rules for taxing contributions and earnings, all provide some tax-free or tax-deferred benefits. Since you aren't paying income taxes on earnings throughout the years, that typically means you'll have a larger balance at retirement. Thus, you'll start out with a larger retirement base to help combat inflation.

  • Keep fixed expenses as low as possible
    If you aren't using a significant portion of your income to pay a mortgage, car payment, or credit card debt, you'll have more flexibility to deal with higher prices.

  • Make sure you have plans to deal with health-care costs
    While Medicare will help once you turn age 65, it still does not cover many health-care costs. Look into Medigap policies and prescription coverage to help with those non-covered expenditures.

  • Minimize withdrawals from your retirement assets
    To counter inflation, you need to withdraw larger and larger sums just to maintain the same purchasing power. To make sure you don't run out of funds late in life, keep withdrawals during the early years to a minimum.

Does Your Family Look Up To You For a Secure Financial Future?

Find the Right Financial Advisor for You
Free Initial Consultation. No Match Fees. No Obligation

WiserAdvisor has over 20 years experience in successfully matching interested investors to financial advisors and is a trusted source in this field. Matched Advisors are screened for experience, fee schedules, registered with FINRA and SEC and hold clean records

YOU MAY ALSO BE INTERESTED IN

I want to take charge.
HELP ME FIND MY ADVISOR
x

Many of you have expressed your concerns. We heard you.
Our vetted advisors nationwide are prepared to connect via phone and/or various virtual online tools. The safety and health of you and your loved ones is our top priority.
Start your advisor matching process now. Get some clarity on the forces driving the markets and the balance in your nest egg.

Information on our advisors:

      1. Licensing & disclosures with FINRA & SEC
      2. Advisor Compensation (Fee Only or Fee Based)
      3. FREE initial 1 on 1 consultation

Get a custom match (1-3 advisors) - No match fee

Completely Private and Confidential