Phantasm
Banned
Over time, inflation can drastically affect your retirement savings by eating away at the purchasing power of money. When inflation rises, there is an increased cost of living, and a decline in the value of your savings. Therefore, this implies that the amount you have saved for retirement might not buy as much as you had thought it would in future.
For instance, let’s assume that you have $100,000 saved up for retirement with inflation running at 3%. Within one year, this money will then be worth only $97,000 reflecting a 3% decrease in its purchasing power. Eventually ,this loss in purchasing power could significantly impact on how well off one feels during their retirement years.
In order to weather the effects of inflation on your nest egg ,it should be invested into instruments like real estate and precious metals such as gold and silver which tend to appreciate when inflations rates are high.
For instance, let’s assume that you have $100,000 saved up for retirement with inflation running at 3%. Within one year, this money will then be worth only $97,000 reflecting a 3% decrease in its purchasing power. Eventually ,this loss in purchasing power could significantly impact on how well off one feels during their retirement years.
In order to weather the effects of inflation on your nest egg ,it should be invested into instruments like real estate and precious metals such as gold and silver which tend to appreciate when inflations rates are high.
