Your nest egg may fall victim to inflation
Here’s the hard truth about everything that is currently happening: inflation is one of the biggest threats to your retirement funds. And while, thanks to the Federal Reserve, the United States hasn’t seen a huge inflation rise in the last two decades, we all know that nothing is secure. Inflation can always skyrocket in a matter of weeks, and experts have stated that 10% annual inflation can occur at any time.
With how the recent world events have shown their impact on our inflation spiking up and everything getting more expensive, this point is more relevant than ever. Inflation can end up ruining most retirees. We plan accordingly to how we save at a specific point in time, but inflation can end up racking prices so high that you could end up depleting your savings account sooner than expected.
This is why you should always make sure you diversify your portfolio when you can, which will make your investments inflation-sensitive, such as real estate and Treasury inflation-protected securities (TIPs), so you don’t end up losing money in the long run.
3 Responses
A lot of truths were spot on. Disappointed to see that there was no mention of Medicare Advantage Plans available from numerous major insurance companies that will pay a lot more than straight Original Medicare. Copay’s are modest and mostly all costs are fully paid when you hit the maximum out of pocket level. There is also the Gap coverage option. This is important info that should have been included.
My spouse and I waited until age 70 to start collecting social security which has made a big difference for our long term plans. The 8% increase per year for the four years after our age 66 regular retirement age gives us 32% more.
We have a moderate LTC plan which has a reasonable rate which will help IF we need it later in life.
This article does not address the federal taxes you will have to pay on those benefits based on ridiculous levels of income that have not been adjusted for years.