“Inflation is taxation without legislation.”
-Milton Friedman
What is inflation and why does it matter to retirees?
Let me share a story…
My dad would tell me what something cost “back in the day.” I remember newspapers were a nickel. There was a time when you could buy ocean front lots in Myrtle Beach for $100 and, if there was a house on the lot, they would give you the house!
That seemed so crazy to me, but one thing stuck out…. prices rise over time. That is inflation.
This is how inflation may affect your retirement:
- Your cost of living may go up faster than the income you plan to get in retirement. Make sure you update your retirement plan at least once a year. You may find you can increase withdrawals to match rising cost, or you may find you may have to make do with less.
- The value of your assets, such as your house, could be much more than you think. This could be helpful if you sell, but your next purchase could cost more than you planned.
Cash or fixed income could be particularly vulnerable to inflation. Low yields cannot match rising costs. Have cash and fixed income as buffers for emergencies and market volatility. Have other investments designed to rise over time.
Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. See below for representative index definitions. For illustrative purposes only. Note: Historical data unavailable for some asset classes. Rising core CPI periods, which do not include food or energy prices, defined as increases of about 1% or more.
If you have any questions about how inflation may affect you, email me at
Je****@Ri*********.com
or click here for a phone appointment.
On the lighter side, reading the book How God Makes Men, by Patrick Morley. Good book. Elliott started tennis season at Myrtle Beach High School.
Hope all is well with you and your family,
Jeremy
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Finger Financial Five – 5 points in 5 minutes or less – is intended to provide you with a weekly shot of useful financial information. My intention is to share principles, so you will have more clarity and peace and make better financial decisions.
Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.
This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
