Welcome to a new week and a new theme here on the One Minute Retirement Tip! 

This week’s theme is why inflation matters in retirement. Right now, inflation is very low and has been for many years. As time goes on and we go longer and longer without meaningful inflation, Americans become less and less concerned, I think. I rarely have a client who asks me what we should be doing to protect them from inflation, because over the last 20 years, it just hasn’t been something that any of us have had to worry about. In fact, with the Great Recession of 2008-2009, we had the opposite problem - worries about deflation. 

But as I’ll go into depth on this week, inflation can be a big big problem, especially in retirement. If you are unlucky enough to retire during an inflationary time period like the 1970s or 1980s, high inflation is such a problem that it can completely alter your lifestyle in retirement, or worse, cause you to run out of money, just to keep pace with inflation. 

Inflation is problematic anytime, because your dollars don’t go as far as they used to. But when you’re working, wages are usually rising to keep up with inflation. That’s not the case when you’re retired. 

The problem comes in when your income and your net worth doesn’t grow in lockstep with the inevitable price increases due to inflation. 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. 

So this week, I’ll talk about why inflation matters for retirement, what kind of investments will help safeguard your assets and your income in an inflationary environment, and what investments you should avoid. I’ll also talk about why I think higher inflation is on the horizon and why the time to prepare for higher inflation is now.

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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