• Question
  • WITH THE COST OF INFLATION IS THERE A WAY TO SURVIVE WE LIVE DAY TO DAY AND PUT WHAT LITTLE MONEY

    Asked by a 82 year old man from Aubrey, TX on 7/3/2012

    WHAT IS THE COST OF INFLATION, IS THERE A WAY TO SURVIVE? WE LIVE DAY TO DAY AND PUT WHAT LITTLE MONEY WE HAVE AT THE END OF THE MONTH INTO HARD SILVER/GOLD.

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  • Categories: Retirement Planning, Inflation and COLA

Answers

  • Editorial 

    Editorial 
    NewRetirement

    San Francisco, CA

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  • Inflation is a truly big threat to anyone living on a fixed income. As such, it is of particular concern to retirees.

    "Inflation is when sitting on your nest egg doesn’t give you anything to crow about." -Unknown Or, as Ronald Reagan said, "Inflation is as violent as a mugger, as frightening as an armed robber and deadly as as a hit man."

    When you have a fixed amount of money and prices rise, you can afford less.

    In the NewRetirement Calculator we calculate your retirement with both pessimistic and optimistic scenarios:
    https://www.newretirement.com/retirement-calculator/default.aspx

    -- Optimistic Inflation Scenario = 0.5% per year (based on the market forecast for inflation arrived at by comparing the 10 year TIPS to the 10 year nominal Treasury)
    -- Pessimistic Inflation Scenario = 3% per year (historical average over the last 20-30 years)

    We also calculate medical costs separately, we have those growing as high as five percent a year.

    This is in no way investment advice, but ways to protect yourself from inflation include:
    -- Purchasing a lifetime annuity with inflation protection. Depending on your age and the amount of money you have to invest, this may be the most secure way to guarantee your lifetime income. You can get instant annuity estimates and compare providers here:

    https://www.newretirement.com/annuity-marketplace.aspx

    -- Silver and gold have traditionally been good investments for inflationary periods. As a currency devalues, the worth of metals and other stable holdings remain the same. However, investments in these metals has exploded in popularity and it is unclear how they will trade in the future.

    -- Look for investments that pay higher interest than the inflation rate.


  • Login to rate this answer:   Answered on 7/7/2012
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.