{"id":3898,"date":"2022-02-23T10:29:08","date_gmt":"2022-02-23T16:29:08","guid":{"rendered":"https:\/\/kramerwealth.com\/?p=3898"},"modified":"2024-01-24T09:49:07","modified_gmt":"2024-01-24T15:49:07","slug":"inflation-back-to-the-future","status":"publish","type":"post","link":"https:\/\/kramerwealth.com\/inflation-back-to-the-future\/","title":{"rendered":"Inflation: Back to the Future"},"content":{"rendered":"<p class=\"responsive-video-wrap clr\"><iframe title=\"Inflation - Back to the Future.mov\" src=\"https:\/\/player.vimeo.com\/video\/667859358?h=2a1aa8b3b9&amp;dnt=1&amp;app_id=122963\" width=\"1200\" height=\"675\" frameborder=\"0\" allow=\"autoplay; fullscreen; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>Inflation sometimes seems like one of those afflictions of an era long since passed into the<br \/>\nhistory books. While it\u2019s true that double-digit inflation has been absent for the last 30 years or<br \/>\nmore, you may remember the high inflation years of the 1970s. In 2021, the Consumer Price<br \/>\nIndex (CPI) rose by 6.8%, the highest point since 1982.<\/p>\n<p>Will the levels of U.S. public debt and loose monetary policy revive the inflation rates of the 70\u2019s<br \/>\nand early 80\u2019s? No one really knows. However one thing is certain\u2014even low inflation rates<br \/>\nover an extended period of time can impact your finances in retirement.<\/p>\n<p>A simple example will illustrate.<\/p>\n<p>An income of $50,000 today at an inflation rate of 3% would have a purchasing power of just<br \/>\nover $32,000 in year 15\u2014a 35% erosion. Said differently, to maintain the desired lifestyle that a<br \/>\n$50,000 income would provide requires $77,900 of income after 15 years of 3% inflation.<\/p>\n<p>Here\u2019s something else to consider. Retirees may feel the impact of inflation even more than<br \/>\nmost. Why might this be the case?<\/p>\n<p>Healthcare. Retirees may be subject to a higher rate of inflation than \u201cthe headline\u201d Consumer<br \/>\nPrice Index because retirees may expect to spend more on health costs than most Americans.<br \/>\nHealthcare inflation has been nearly double that of the CPI in recent years.<\/p>\n<p>Social Security. The CPI is the most frequently used statistic for measuring inflation. It is<br \/>\ntechnically the \u201cConsumer Price Index for All Urban Consumers\u201d (CPI-U). But the Social<br \/>\nSecurity Administration bases its cost of living adjustments on the \u201cConsumer Price Index for<\/p>\n<p>Urban Wage Earners and Clerical Workers\u201d (CPI-W). The CPI-W gives less weighting to<br \/>\nhousing and medical care, which are categories that seniors typically spend more on. This<br \/>\nmeans that the social security cost of living increase may not be keeping up with the actual cost<br \/>\nof living increases that many seniors face.<\/p>\n<p>Investment Allocation. Many retirees\u2019 investment portfolios tend to have more weighting in<br \/>\nconservative investments such as bonds, cash, and other fixed income. In the current time of<br \/>\nvery low interest rates, yields on these fixed income investments may not be enough to keep up<br \/>\nwith inflation.<\/p>\n<p>Inflation is a thief; it steals the purchasing power of your retirement savings. But, as with<br \/>\nyour other possessions, there are strategies that may help you from being \u201crobbed\u201d of your<br \/>\npurchasing power. Discuss with your financial advisor to see if your retirement plan and<br \/>\ninvestment strategy is positioned to help you guard against the impact of inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Inflation sometimes seems like one of those afflictions of an era long since passed into the history books. While it\u2019s true that double-digit inflation has been absent for the last 30 years or more, you may remember the high inflation years of the 1970s. In 2021, the Consumer Price Index (CPI) rose by 6.8%, the [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":3900,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"0","ocean_second_sidebar":"0","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"0","ocean_custom_header_template":"0","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"0","ocean_menu_typo_font_family":"0","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"0","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"off","ocean_gallery_id":[],"footnotes":""},"categories":[1],"tags":[34,40],"acf":[],"_links":{"self":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts\/3898"}],"collection":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/comments?post=3898"}],"version-history":[{"count":3,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts\/3898\/revisions"}],"predecessor-version":[{"id":3973,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts\/3898\/revisions\/3973"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/media\/3900"}],"wp:attachment":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/media?parent=3898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/categories?post=3898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/tags?post=3898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}