Don’t Let the Cost of Inflation Threaten Your Retirement Dreams

In a long lost movie called “The Great Rupert,” a dancing squirrel finds one man’s horde of cash stashed away inside the wall of his duplex apartment and showers it, one bill at a time, through a hole in the ceiling upon Jimmy Durante, the occupant of the adjoining space. Durante, of course, is thrilled by his good fortune. His neighbor, on the other hand, loses his hard-earned nest egg, one wadded up bill at a time.

There’s No Good Fortune in Inflation!

Like a hidden rodent, inflation gnaws away at the substance of your retirement dreams until, bit by bit, the value of your own treasure -- your long-term security -- is depleted. Just think, a paltry annual inflation rate of 2% would have eroded the value of cash, stashed away in the year 2000 in some apartment wall or coffee can, by 34 cents on every dollar in today’s value. In effect, we’re being robbed...and yet we might as well be battling a squirrel for all the recourse we have. At whom can you point a finger and cry, “Thief! Thief!”?

You Have to Fight Back!

Within a much larger arsenal of weapons at our disposal as financial professionals, here are four basic rules to live by:

1. A Comprehensive Plan is Absolutely Essential.

Just as a wise man works with his CPA or his financial advisor to devise clear tax strategies, so you need to plan well to protect your retirement dreams against inflation. Very often, by carefully reviewing your financial choices with you, we can not only help you fight inflationary drag; we may also recharge your savings plan to build even more security and comfort.

2. Re-Check Your Investments.

Every single investment is either resistant or vulnerable to inflation. Are your investments secure? Just as you go to a doctor to check out the state of your physical health, you need to seek out a financial professional to secure your investments against the ravages of inflation. Let us help you in this regard.

3. Buy Your House.

Even as the housing market has taken a beating over the last decade, it still makes sense for retirees to own their own home. A fixed-rate mortgage will establish the amount of your monthly payment for decades.

4. Don’t Let Lifestyle Inflation Creep In.

“Lifestyle inflation” is marked by an increasing
cost of daily living, not so much because of the decreasing value of money as much as it is our appetite for better things, coupled with an ever growing range of options. Think! You used to just love your little cell-phone, but today you feel naked without a smart-phone. You place a high value on the camera, calendar service, GPS and a thousand other handy phone applications. Do you need all that? Now multiply that phenomenon by applying it to restaurants, kitchen equipment, home services, your car, etc., and you can see the result -- a constantly increasing cost of living without an increase in real value.

Please contact us for a free review of your financial portfolio and investments to make sure that you are protected against inflation and other financial threats.

Source: Ning, David. “Five Sensible Ways to Combat Inflation in Retirement” U.S. News & World Report / Yahoo! Finance. 11/28/12
Investment advice is offered by Horter Investment Management, LLC, a Registered Investment Adviser. Insurance and annuity products are sold separately through TWP Financial. Securities transactions for Horter Investment Management clients are placed through Pershing Advisor Solutions, Trust Company of America, Jefferson National Monument Advisor, Fidelity, Security Benefit Life, ED&F Man Capital Markets and Wells Fargo Bank, N.A.