When Planning for Retirement – Don’t Forget About Inflation

Inflation gradually decreases the purchasing power of money, which means over time, the same amount of money will buy fewer goods and services. To illustrate this, let’s consider an average annual inflation rate of 3%, a common estimate used in retirement planning.

Starting with $600,000 here’s how inflation at 3% per year would erode its value over different periods:

• After 5 years, $600,000 would be worth about $520,374 in today’s dollars.
• After 10 years, its value would drop to approximately $448,170 in today’s dollars.
• After 20 years, the purchasing power of $600,000 would be about $331,848 in today’s dollars.
• After 30 years, as someone might experience in retirement, $600,000 would only have the purchasing power of about $245,916 in today’s dollars.

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To secure your future, you need investments that beat inflation. If your retirement savings don’t grow faster than inflation, you’ll risk running short, impacting how well you can live later on. It’s essential to choose investment options wisely to protect and enhance your nest egg.

Don’t Let Inflation Erode Your Future

Protect and grow your retirement savings by choosing investments that outpace inflation. Act now to ensure your financial stability and quality of life in retirement. Schedule a consultation to find the right investment strategy for you.