Retirement Issue: Inflation

After hovering between 1% and 3% for most of the past couple of years, it rose substantially in recent times. And even moderately low rates of inflation could have harmful effects on your purchasing power in the coming years.

For instance, if we talk about $1,000 in today’s money, we’ll only be able to purchase about $553 in products 30 years from now if we go by a 2% annual inflation rate. With a 3% rate, that $1,000 will become $413 worth of products.

And if inflation goes up by up to 5% or 6%, the end result could be far more severe. For many retirees, more increased inflation is particularly challenging because they may be living on a fixed income and won’t be able to support rising costs.

Plus, many of the goods or services retirees most often use are already seeing a greater-than-average price inflation.