Inflation-Fighting Retirement Strategies
Surviving a summit attempt on a world class mountain requires the use of every means available towards success, including proper clothing and gear, physical conditioning, mental preparation, technical training, route planning, team coordination, danger recognition, and, of course, sound and timely decision-making in every instance. Dwelling in such a hostile environment long enough to earn ‘the attempt’, and live to share the experience, is improbable for most ambitious climbers. An equally challenging adventure is the lengthy retirement in a high-inflation environment, a path fraught with perils maximizing the probability retirees will outlive their capital. We are slowly discovering the Fed’s recent rate hikes broke certain components of the economy while failing to fully subdue entrenched core inflation; let’s recognize and engage some inflation-fighting retirement strategies!
Assume a higher inflation rate in your planning. An impactful and lasting financial dynamic must factor into planning and investment decisions; get this issue on your financial radar.
Allocate retirement capital towards assets that appreciate, and produce competitive income streams in an inflationary environment (Prior Blog: HighInflationInvestments) Pricing power rules amidst high inflation.
Live frugally and maintain strict budgeting. Most American retirees spend more money in year one than the final working year. Living on a fixed income with high inflation is serious business; don’t let the above be you.
Optimize Social Security, which will impact the longevity and productivity of your retirement capital pool. Discover which Social Security option maximizes the probability of the greatest lifetime family financial benefit.
Diversify sources of income. Use your God-given talents, have fun, and be creative. Every dollar you earn is a dollar that can remain invested, or freely given to another in need. Be a conduit of financial blessing because of your personal fiscal discipline. Will God not bless this profoundly?
Manage health care costs prudently. Understand your health plan options, features, and costs, and comparison shop¹. Be your own primary health advocate with a solid regimen for nutrition, exercise, sun exposure, hydration, and sleep. Read daily to enhance your understanding of natural good health.
Any great mountaineer who does everything right can still in a flash be devoured by an avalanche, just as fixed income retirees in a fiscally reckless society can be left holding a currency with no meaning in God’s economy. I think this means we should strive for financial excellence but always hold it loosely, and to be thankful for what we have and generous with those in need.
God bless your efforts and Happy New Year! Shaun
“The point is this: whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to make all grace abound to you, so that having all sufficiency in all things at all times, you may abound in every good work.” ~2 Corinthians 9:6-8
1 Smart Asset, “How to Account for Inflation in Retirement Planning”, October 27, 2023
The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.
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There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
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