Make sure any retirement plan accounts for inflation

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Steve Rohde is a financial adviser with Ameriprise Financial Services Inc. Courtesy photo
FALLBROOK – Today it’s common for Americans to spend two, three or even four decades in retirement. This extended period means people have ample time to relax and achieve a bucket list of dreams; however, the flip side is that retirees need to ensure they have enough savings to last through their lifetime. One complicating factor is that inflation is a fact of life, and it can result in meaningfully higher expenses over time. Living costs increase even with modest inflation. By historical standards, the impact of inflation on Americans’ expenses has been relatively low, rising less than 3% annually over the last quarter century. Yet, even modest inflation adds up. A 3% annual increase means living costs would double in less than 25 years. Consider this example: a retired couple
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