SHOP
Log in
Don't have an account?
Sign Up Here →
Forgot Password?

How to Combat Inflation for Early Retirement

March 24, 2012

    How to Combat Inflation for Early Retirement

    by John Bearss, Retirement Specialist

    This week I will explore Roadblock Number 5 according to Larry Barrett’s article in the Financial Planning Magazine entitled the 7 Roadblocks to Early Retirement.

    Roadblock #5 – Underestimating the Effects of Inflation

    Inflation is the biggest risk to any retirement savings plan, and woe to any retiree who underestimates its effects. Inflation is the increase in the money supply, which results in a sustained increase in the price of goods and services over time. Most experts agree that retirees need to assume an annual inflation rate of 3-4%, but a good retirement plan should account for periods of high inflation as well.

    If the annual rate of inflation is 3% but your salary rises 5% each year, that’s ok. But if you’re retired and on a fixed income, you need to make sure that your investments earn more than the rate of inflation. Otherwise, you’re at risk of running out of money because goods and services will cost more than you’re earning.  This is where an annuity can be of great value because an annuity is the only investment that can guarantee an income stream as long as you are alive even if you live long enough that your asset is depleted.

    So don’t let inflation sneak up on you.  As with any good financial plan, make sure you have prepared and know how to combat inflation. 

    Thank you for joining me this week for your Retirement Minute.

    Interested in more strategies that will help you with early retirement? Contact Retirement Specialist John Bearss by email: lifetime@donet.com

    Roadblock #1 – Not Saving Enough, Early Enough (Listen to Roadblock #1)

    Roadblock #2 – Ignoring Free Money (Listen to Roadblock #2)

    Roadblock #3 – Failing to Diversify (Listen to Roadblock #3)

    Roadblock #4 – Starting to Plan Too Late (Listen to Roadblock #4)

    Subscribe
    Notify of
    guest
    0 Comments
    Inline Feedbacks
    View all comments

    Please help us spread the word about FollowtheMoney.com on Facebook, Twitter,
    and any other social media outlets.

    Silver & Gold

    Call 800-247-2812 now for the best prices on gold and silver coins and receive Free Shipping and Insurance when you mention Follow the Money.

    Weekly Newsletter

    Stay in the loop!
    Sign up today to receive our
    weekly e-newsletter.