Wealth Protection: Safeguard Against Inflation
Much like high blood pressure is the human body’s “silent killer”; it is equally true that inflation is just as stealthily deadly to your retirement savings and wealth protection efforts. If not dealt with over the long term, it will most assuredly sneak up and deliver a fatal financial blow. Indeed, if your nest egg is not earning enough to stay ahead of inflation and taxes, your retirement lifestyle is likely to get scrambled well ahead of its time.
Inflation is a direct increase in the prices of goods and services over time. Because of such increases the purchasing power of a consumer or business is adversely impacted, requiring they pay more for the same amount and quality of goods or services that they might have paid less for previously. A recent article in Fox Business titled, “Producer Prices Make Largest Increase in 5 Months”, states that producer prices rose more than expected in September, the biggest gain in 5 months, due to recent surging gasoline prices. Just think, in 1990, the average cost of a gallon of gas was $1.34 per gallon, and a loaf of bread was just 70 cents.
Whether retired or not, no one wants to be forced to alter their lifestyle- particularly one where the fruits of their lifetime labor are at stake: relaxation, travel, entertainment and other rewards of a life well-lived. When inflation starts to outpace a retirement portfolio, that comfortable lifestyle is at risk.
When it comes to investing for retirement, accounting for inflation is nothing short of critical to your success – and to maintaining your desired lifestyle along the way. This does not mean taking on an inappropriate amount of risk by chasing high returns and, in effect, gambling with your retirement savings or covering unforeseeable needs with insurance policies. It is about finding the appropriate blend of risk and return necessary to maintain short-term purchasing power in working toward your long-term goals. Remember when it comes to retirement savings and wealth protection, inflation can be like high blood pressure; you don’t see it, but it will kill you!
About Charles Massimo
Recognized as industry expert and guest speaker at national industry conferences, Charles Massimo is a published author and media subject expert on topics ranging from wealth/asset management to investment and financial planning for high net worth families.