How to Prepare for Retirement Considering Inflation
Inflation can quickly wither away one’s hard-earned savings. Every generation has witnessed inflation at some level, from the late ’70s to today. Inflation is when the cost of goods and services increases while the value of our dollar decreases. Simply put, inflation makes things more expensive!
Most retirees plan on having a fixed income when they reach their Golden Years. And although Social Security does have an inflationary component to it, rarely will it keep up when inflation runs rampant.
So how do you prepare? Here are four ways to plan for your retirement and reduce the impact of inflation.
#1 Save More
This seems obvious, but when goods and services are cheap, preparing for inflation moves to the back burner. The best time to begin saving was yesterday; the second-best time is today. But you must save enough money on a regular basis to build up a comfortable nest egg. Many financial advisors suggest saving at least 15% of your income for retirement. However, this is only a guideline. Schedule time today to review your retirement goals. With goals in hand, you can back into exactly how much you must save monthly.
#2 Invest Smartly
If you have more than ten years until retirement, consider investing in an S&P 500 index fund. Why just the S&P? Well, a new study shows that 80% of fund managers fail to do better. If professional investors are falling behind, you likely will too. As you get closer to retirement, seek advice from a fiduciary who will begin reducing your risk to conserve capital.
#3 Eliminate Debt
There is good debt, and there is bad debt. Good debt is obligations secured by an asset that produces more than the cost to carry (the interest rate). The most common forms of good debt include home mortgages and business loans. On the other hand, bad debt is like an anchor dragging down your savings goals. Therefore, loans on vehicles, boats, RVs, or any other depreciating asset need to be cleared as soon as possible, along with any unsecured debt like credit cards.
#4 Shop Smart
Watch how and where you spend your money by maintaining a household budget. Simple expenditures like eating out and clothing can quickly add up. A good tip is if you are thinking of buying something, wait 24 hours. You will often realize you don’t want the item as much as you thought. In addition to keeping tabs on spending, look for ways to save on things you buy regularly. This can include using credit card points (as long as you pay them off every month) for plane tickets, coupons for groceries, and shopping at discount stores instead of fancy retailers.
Featured Blogs
- Fueling Your Mind with Brain-Boosting Foods
- 5 Simple Ways to Boost Your Immune System (and 1 unusual way)
- Embracing Our Roles: Renewing Our Commitment to Sustainable Living
- Tips for a Stress-Free Tax Season Experience
- Spring fitness ideas
- Inspirational women who make the world a better place
- Creating a Positive Start to Your Day
- Spring Forward: Adjusting Your Routine for Daylight Saving Time
- Gratitude - Key to a Positive Mindset
- Adopting a Holistic Wellness Approach to a Healthier You
- 3 Common Sense Things People Should Know
- Exploring Superfoods: Nutrient-Packed Ingredients for a Healthy Diet
- Unraveling the Mystery of the Extra Day
- Digital Detox: A Healthy You in a Hyperconnected World
- Financial Fitness in 2024: Budgeting and Saving Tips
- Three Joyful Habits for a Healthier You in 2024
- New Year's Resolutions: Staying Committed Year Round
- The Magic of Christmas Traditions
- Staying Healthy During the Winter Months!
- How to be a Time Management Whiz During this Busy Season
- Self-care tips for December
- Five Health “Hacks” For Happy Holidays
- Turning 65? Looking at Medicare?
- Turning 65? What You Need to Know about Signing up for Medicare
- The Smart Home: What is that?
- Important definitions to help you understand your life Insurance
- Why an Insurance Agent Makes a Difference When Buying an Insurance Plan
- Preparing For an Emergency
- Davis Insurance Fresh New Look!
- Why Do I Pay Medicare Part B
- Don’t Let Insurance Coverage Gaps Put You at Financial Risk
- It’s February And That Means It’s American Heart Month
- Starting a New Business? Don’t Forget Your Insurance
- How to Stay on Track with Healthy Goals for 2017
- Insurance and Financial Planning Resolution for 2017!
- Wishing You a Happy Holiday Season
- End of the Year Financial To-Do List
- Modest Increases for 2017 Medicare Parts A & B Premiums and Deductibles
- Open Enrollment For Health Insurance is Here!
- Eat Well, Sleep Enough and Move to Stay Healthy
- Four things to know about Medicare Open Enrollment
- Pick a Plan, then Find The Right Doctor