Combating Inflation as You Work Toward Retirement
As inflation leaves its print on consumer markets across the country, it is also impacting how Americans plan for their retirement. An August Ameris Bank survey conducted by The Harris Poll found 50 percent of respondents admitted to needing to make changes to their retirement plans to account for inflation. The numbers are even higher for those ages 18-34 with 57 percent answering they need to adapt, with 61 percent of those ages 35-44 falling in the same category. Following the below five tips could help you stay on pace for retirement despite inflation.
Develop a Diverse Investment Strategy
Keeping all your finances in low-interest-bearing deposit accounts may put you behind when it comes to outpacing inflation. Consider placing larger assets into a more diverse investment strategy. Set up a meeting with your financial advisor to discover the amount you need to comfortably save and develop your strategy. One key to remember is once you put your plan in place, you need to stick with it for the long-term.
Hold Off on Social Security
Social security is one piece of a retirement portfolio that many Americans rely upon. Instead of applying for social security at your full retirement age of 65 to 67, consider waiting until you are 70. This will increase your benefits an extra 8 percent per year. Calculators are available online to show you what option is best for you and your retirement.
Adjust Your Spend Rate Now, Not Later
Many retirees cut down on expenses and indulgences once their retirement commences, but starting that process now will pay dividends later. By cutting back where you can and living more modestly, you will be able to invest that money instead. That capital will snowball and allow you to worry less about frugality into your golden years.
Start Planning Early
In the same Harris Poll survey mentioned above, 17 percent of those ages 18-34 said they were not sure if they needed to make changes to their retirement plan due to inflation, and 13 percent said they have no plans to retire at all. If you are in that age bracket, retirement may seem far off in the distance, but it is truly never too early to begin planning for retirement and putting money aside. In fact, the earlier you start, the more your savings will compound and leave you in better shape as you approach retirement.
Seek a Second Opinion
Ensuring you are prepared to retire and properly investing your savings can seem like a scary endeavor, but it doesn’t have to be. If you are still unsure after receiving professional guidance, it doesn’t hurt to seek a second opinion. The more information you can gather, the better off you’ll be.
Following these five tips will hopefully provide you a greater sense of financial peace of mind as you plan for your golden years.
Written by Dave Johnston, head of wealth management and trust
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Financial products made available or recommended by Ameris Bank that are not bank deposits are not insured by the FDIC; are not a deposit or other obligation of, or guaranteed by, Ameris Bank; and are subject to investment risks, including possible loss of the principal amount invested.