Combating Inflation’s Effect on Your Retirement Plan

No matter who you are or what stage of life you are in, you experience the effects of inflation.

But how can you combat these effects when you’re planning for, or are already in, retirement?

Planning for unprecedented times can be difficult when you don’t know where to go for help. That is why we always recommend professional advice from a wealth advisor who can apply your unique financial needs to their intricate financial strategies. Read on to hear some of the strategies we recommend for managing inflation’s impact on retirement!

Adjustments You Can Make to Manage Inflation

There are plenty of steps you can take to better manage the impact inflation has on your everyday life — and your retirement plan.

One of the steps mentioned in the episode 107 of Life Unlimited is doing your research on different investment options, including stocks, bonds, and Treasury Inflation-Protected Securities (TIPS). It is important to understand the pros and cons of each to know whether they are suited for your unique financial situation.

Another simple piece of advice to save a little extra money during times of high inflation:: 

  • Become aware of the expenses you pay each month. 
  • Is there a subscription you don’t need anymore? Is there a better option for cable tv in your location?

Working with a financial advisor allows you to hold yourself accountable for the financial progress you make. Not only can they help you implement financial plans into your everyday life, but they can also give you personal advice that fits your unique circumstance.

The Effects of Inflation on Your Retirement Plan

When factoring everyday expenses into your retirement plan, are you assuming that your expenses will remain the same as they are now — or have you adjusted for inflation?

Adjusting your retirement plan for inflation can be difficult, especially because inflation is unpredictable. 

Heller Wealth Management offers several strategies to combat the effects of inflation on your retirement and has several resources you can use to make your money grow alongside inflation such as stocks, hedge funds, and bonds.

Your daily expenses may not look the same as they do now as when you are in retirement, so it is important to plan for increased expenses in the future.

This does not necessarily mean you need to work harder, but you need to make your money work harder.

The Tax Bracket Creep

One of the concepts introduced in the episode 107 of Life Unlimited is the “tax bracket creep.” 

This is a factor most people forget to account for when creating a financial or retirement plan. To learn about this concept in full detail, you’ll want to listen to the full episode.

Strategies to Make Your Money Work for You

Anticipating the impact of inflation on your retirement doesn’t necessarily mean you need to work harder. It means you should become more educated around how the money you currently have should be used so that it can work harder for what you’ll need down the line.

Here are a few strategies we use:

  • Cash strategies – allocating the right amount of liquid cash to have in retirement
  • Bonds — and knowing what financial scenarios you should use them in
  • The stock market
  • Treasury Inflation-Protected Securities (TIPS)

To learn more about this topic, listen to episode 107 of the Life Unlimited Podcast or contact us via our contact page.