This week I’m talking about inflation - are we in for higher inflation in the coming years? And if so, what does that mean for you and your retirement? 

So far this week, I’ve laid the groundwork by helping you understand the intersection of our rising national debt and the increasing likelihood for higher inflation as our debt gets bigger and bigger. 

Today, I’m turning to a more personal topic as it relates to inflation to help you connect the dots between the national debt, inflation, and why that matters for you.

So what’s so bad about inflation, anyway? As inflation goes higher, that means every dollar to your name is now worth less and you need more and more dollars just to stay even and be able to purchase the things you were used to paying less for. 

You can see the impact of inflation by looking at how much things used to cost compared to how much they cost today. In January 1988, a loaf of white bread cost approximately 59¢. In January of 2013, that same loaf of bread cost $1.42. So in the twenty-five year period, the bread increased 83¢ or 140%.

Because that happened slowly over time, you probably aren’t angry about the rising price of bread over the last 25 years, but your income and net worth would have had to also grow by 140% over that same time in order for that loaf of bread to not feel more expensive to you. 

The problem comes in when your income and your net worth doesn’t grow in lockstep with the inevitable price increases due to inflation. That’s why it’s such a massive mistake to put all of your cash in a safe, or under your mattress or bury it in the backyard. If your money isn’t growing at least at the pace of inflation, then you are losing because the value of what every dollar can buy is dropping over time. 

That’s it for today, but before you go...If you haven’t already left a review for the One Minute Retirement Tip, please consider leaving an honest review in Amazon or iTunes. I read them all, so feel free to leave any feedback or topic suggestions there too. 

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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