Inflation in Retirement

Inflation in your retirement years as that is a hot button topic right now as we’re seeing inflation at higher than historically average numbers. What impact is that going to have on you? You always hear about oh, I’m in retirement. I’m living on a fixed income. So that’s where inflation is going to play maybe an even bigger role for you in your planning. So you think about your Social Security income. There’s a cost of living adjustment as we saw that bump up significantly here this past year to try and help out with some of those rising costs. But what about you know if you maybe have a Pension. Is that a flat Pension where the number doesn’t change throughout your retirement or is it where they adjust with inflation? There’s other accounts out there. Perhaps you have some type of annuity with an insurance company that’s paying you some type of income. Again, are they paying you a level or fixed income throughout your retirement or is it one that has some type of increase built in where your payments are bumping up over time? So those are all different important areas to be thinking about, but also what is it that you’re spending money on in retirement and what’s the inflationary impact of that? Obviously you’re going to see food costs increasing. You’re seeing gas costs right now increasing. So what are those areas maybe within your budget where you find yourself spending the most money and really look at that to determine okay, how much is that area specifically going up from a cost perspective? The other area that I think of is your retirement phases. So you have those go-go years of retirement where you’re on the move and then it sort of goes to the slow-go years where okay, you’re still spending money, but maybe not as extensively as you were during say those go-go years. And then now it’s the no-go years of retirement where okay, you’re just not going to be out traveling as much as you before. Maybe spending more time at home and not spending as much. That’s something that over the past 17 years at Centennial Wealth Advisory that I’ve watch of clients where in those early years of retirement we strongly encourage you, go and enjoy it while your health is still strong and you’re able to enjoy those different retirement years knowing that usually it seems to be mid-70s or maybe into your late-70s where you just start to slow down a bit more, not doing quite as much. And then knowing that perhaps into your 80s and that may be different for some of you, but at that point you’re probably not going to be spending as much. So again, inflation is vital in your retirement plan. We encourage you to give us a call if you want to talk more about this.