Tips to Safeguard Your Savings Against Inflation
Discover how inflation affects your retirement savings — and what you can do to protect it
The rise in inflation, or the increase in average costs of goods and services, is the highest recorded since 1982, pegged at 7% in 2021, according to the U.S. Bureau of Labor Statistics. It’s still surging. Most economists believe rising prices will get worse before they get better.
What can you do to protect your retirement?
Depending on your source of income during retirement, this may be a reason for concern. If you have a fixed pension, is it adjusted for inflation? Are your investments diversified? A prudent financial plan considers risk and inflation to include assets that will appreciate enough to compensate for rising prices and lower buying power. Stocks and real estate fall into this category. If you haven’t had this conversation with the professional you go to for financial advice, it might be a good time to do so.
Review your spending.
If you are concerned about inflation, and the potential erosion of your buying power, take the time to examine your spending habits. If you don’t have a budget, keep track of your expenses for a month or two to see where your money goes, then prioritize what’s most important to you.
How much will inflation affect you?
Most retirees rely on Social Security for at least a portion of their retirement income. Social Security does have a cost-of-living adjustment built in to help with inflation, though it may not be enough to cover rapidly escalating costs in certain areas. For example, the cost of health care, a significant expense for many retirees, often soars during periods of inflation: Medicare Part B premiums increased 14.5% this year.
Make smart choices to make the most of your money.
Think about ways to get more for your money — whether it’s altering your shopping habits, discontinuing subscriptions you no longer enjoy, minimizing food waste, or taking advantage of discounts or loyalty programs. When it’s time to renew or choose a new health plan, use Via Benefits’ Coverage Checkup to find the most cost-effective plan that meets your needs.
