4 Things You Can Do About Rising Inflation
In June, the Consumer Price Index, which measures the change in the prices of a broad range of goods and services over time, rose 5.4% from a year earlier, marking the sharpest increase in inflation since 2008.1 Whether prices are rising at the gas pump or grocery store, inflation decreases your purchasing power, meaning you pay more money for the same things. While experts debate whether recent increases are a signal that we’re entering a period of sustained higher prices—or if inflation will be temporary—there are ways to help manage the impact on your purchasing power.
Why it’s different this time
It’s important to note that the price hikes we’re seeing now are different from those seen at the beginning of the pandemic, which were largely due to shortages and panic buying. In fact, a rise in inflation was expected this year as the economy picked up steam, business restrictions eased, and consumer demand surged. While ongoing supply chain disruptions and pent-up consumer demand may continue to drive prices upward in the coming months, the Federal Reserve (the Fed), which sets U.S. monetary policy, expects steep rises to be transitory and inflation to remain within its 2% target over the long term, into 2022 and 2023.2 However, there is no guarantee that the Fed will be successful in keeping inflation in check. Conditions could change based on direction of the COVID-19 pandemic, as well as other market, economic, and geopolitical factors. So what can you do to help protect your income from the eroding effects of inflation? Consider the following steps:
To learn more, call the office to schedule time to talk about ways to help protect your income in retirement.
Women Continue to Face Unique Challenges in Retirement
National Women’s Equality Day is celebrated on August 26 to commemorate the certification of the 19th Amendment in 1920, which guarantees women the right to vote. While women’s voices and votes continue to influence social, economic and public policy, as a group, women still face challenges when it comes to financial equality—especially where retirement is concerned.
According to the U.S. Bureau of Labor Statistics, women only earned 82.3% of what men earned in 2020.1 Lower earnings can have long-term consequences as women prepare for and enter retirement. In fact, the combination of lower lifetime earnings and longer average lifespans is a leading reason why women experience higher rates of poverty in retirement than men.2 Not only do many women start out with less—it also has to last longer. Yet, lower wages alone don’t tell the whole story. On average, women leave the workforce to care for children or relatives at a higher rate than men. That can reduce their Social Security benefits in retirement, which are based on earnings during their working years.3
In addition, the pandemic exacerbated many of these challenges. According to the National Women’s Law Center, more than 2.3 million women have left the workforce since February 2020, bringing their labor force participation rate down to levels not seen in more than three decades.
If you, or the women who are important to you, are concerned about having the income needed to meet important lifestyle goals in retirement, consider the following steps.
For those saving for retirement:
If you are in or nearing retirement:
If you have questions about your income in retirement, contact the office to schedule time to talk.
This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.
Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss.
These examples are hypothetical only, and do not represent the actual performance of any particular investments. Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and when sold or redeemed, you may receive more or less than originally invested.
Retire Wise | August 2021
August 31, 2021