Inflation Math for Today’s Retiree

Retirement brings excitement as well as many concerns. You may have heard the saying, “inflation hurts savers and benefits borrowers.”

The expression suggests that borrowers benefit from inflation because they pay back lenders with dollars worth less than when the money was initially borrowed. But for savers, your hard-earned dollars may lose buying power over time.

One popular way to show the “hurts savers” illustration is with retirement calculators. A fixed amount of money will lose buying power at a much faster rate if inflation averages 7% versus 1% over an extended period.

That’s one reason why we caution against using some online tools. You can plug in a set of numbers, and the results may take you by surprise. They often raise more questions than answers.

If you’re concerned about inflation, please reach out. We work with a team of professionals who watch the trends closely, and we can help put today’s inflation in a better perspective.

 

 

 

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2022 FMG Suite.