Have you developed a strategy to manage the biggest financial risks you could face in retirement? If so, you may have an emergency fund to cover unexpected costs, a strategy to minimize market risk, and possibly a plan to cover health care and long-term care costs. Maybe you even have a tax management plan.
There’s one risk, though, that many retirees overlook. It’s inflation, which is the regular, gradual increase in the price of goods and services. Inflation is a natural part of the economy. It’s driven by a broad range of factors including labor and material costs, interest rates, and overall economic conditions.
Do you have a retirement savings gap? While you may be feeling some stress about your retirement outlook, you certainly aren’t alone. According to Gallup’s 2017 study of financial concerns, more than half of all Americans are worried about their ability to pay for retirement.1
If you’re behind on your retirement planning, the simple solution is usually to save more money. Conventional wisdom is to increase your contributions to your 401(k) or IRA. However, that may not be possible. After all, there’s only so much money you can put away for the future. You still have to cover current bills and expenses.