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.
- Mastering the Mind: Techniques for Better Memory and Cognitive Function
- The Art of Productive Procrastination: How to Make the Most of Downtime
- Eating for Energy: Foods that Boost Your Stamina and Productivity
- How to enjoy and celebrate chilly, gloomy days
- Thriving in Your Golden Years: Strategies for Aging Gracefully and Vibrantly
- Best Dog Breeds that Suit Your Needs
- Reduce Stress: Develop Patience
- DIY Delights: Creative Projects for Seniors
- Coping with Seasonal Affective Disorder (SAD)
- Long-term Health Benefits of Physical Activity
- How to Trim Down Hidden Costs of Flying
- Best foods for hydration
- How to Experience Positive Aging (8 Tips)
- How to Improve Your Health: The 5 Main Aspects of Wellness
- How much should you actually have in savings?
- Are you underinsured for your circumstances?
- How to Build Sustainable Wealth
- How to Maintain Our Body
- Enhancing Resilience as We Age
- The Body After 60: Overcoming Barriers to Exercise
- The best herbs to grow for beginners
- Foods you had no idea you could freeze
- Is celebrating your 100th birthday no longer a dream?
- Medicare and Medicaid: Dual eligibility
- Summer Workouts for Your Dose of Vitamin D
- What’s Keeping You from Losing Weight?
- Music and Your Wellbeing
- Your NEW Social Security Statement
- How to Dispose of Unused Medications
- Smart Home Systems: Promoting a Comfortable Environment for Seniors
- Aging and Our Body’s Ability to Heal Itself
- Keeping Health Insurance After a Layoff
- Waking Up to the Impact of Insomnia
- How Life Insurance Benefits Women
- What experts say about raising the retirement age
- Coverage for healthcare treatment denied? Here's what you can do.
- Sharing the Road with Cyclists
- Buying Life Insurance for an Elderly Parent?
- Living Your Best Life After 60
- Buying Health Insurance: A Millennial’s Guide
- Self-Love Ideas for Valentine’s Day
- Life Without Clutter
- Set Yourself Up for Success with Your Fitness Routine
- Winter Hydration – Do I Need It?
- I’m 60+; Do I Need Life Insurance?
- Why Do I Keep Breaking My New Year's Resolutions?
- Closing Out the Year with a Smile!
- How to Enjoy a Long Layover
- 6 Cold Weather Safety Tips
- 10 Tips for Managing Cholesterol Levels
- How Much Life Insurance Do You Need Right Now?
- 3 Top Tips for Better Posture
- Building Bone Density for Seniors
- Living Outside Your Comfort Zone in Retirement
- 3 Top Habits that Lead to a Happy Life After Retirement
- Should You Insure Your Gifts?
- Everything You Need to Know When Retiring Under 65
- 7 Benefits of Slow Travel
- Utilizing Medicare Preventative Services
- The Harsh Reality of Credit Card Fees
- Keeping Your Health Insurance Affordable
- 7 Tips to Weather Challenging Periods in Your Life
- What is a Variable Annuity? 4 Key Details You Should Know
- 4 of the Best Ways to Stay Healthy this Summer
- How to Prevent Sun Damage to Your Eyes
- 3 Tips for Safer Grilling
- When the Sun is NOT Your Friend (What You Need to Know about Sun Exposure)
- Tips to Avoid Stress Eating
- Common Exercise Pains – How to Work Past Them and When to Call for Help
- Signs Your Identity Has Been Stolen (and what to do about it)
- How Does Inflation Affect Life Insurance?
- Know the Benefits of Walking
- Do Brain Food Supplements Really Work?
- Ways You Can Spend Less on Gas
- What Are Alternatives if LTC isn't Right for You?
- 4 Tips for a Less Stressful Summer
- Veteran and Medicare Benefits Work Together
- What are the Safest States From Natural Disasters?
- How to Choose an In-Home Care Provider for Your Loved One in 5 Steps
- 7 Myths About Your Back Pain
- How to Prepare for Retirement Considering Inflation
- 5 Foods that Will Help Keep Your Mind Healthy
- Don’t Throw Away Those Used Coffee Grounds
- I’m 50 Years Old. Should I Keep My Life Insurance?
- Are Personal Items Covered by My Auto Insurance Policy?
- How to Spot Government Imposters
- 5 Mistakes to Avoid When Buying a Life Insurance Policy
- Do I Really Need Condominium Insurance?
- Happiness Through Healthy Food
- 5 Step Checklist to Choosing a Health Insurance Plan
- The Cost of Home Ownership
- 5 Creative Spring Décor Ideas
- 10 Ways to Maintain Healthy Joints
- Death and Taxes (and Insurance?)