Personal Wealth Management / Retirement
Retirement Investing Mistake: Forgetting to Plan for Inflation
Retirement is meant to be a time to pursue all the activities you dreamed of during your working years. However, financial concerns burden many retirees and transform this potentially exciting time into one of worry and uncertainty.
Fisher Investments has helped thousands of individuals and families plan for comfortable retirements and better financial futures.
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Title screen appears, âCommon Retirement Investment Mistakesâ underneath it a subtitle âMistake #4: Ignoring Inflation |
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A woman appears on the screen with a TV screen next to her, the woman is wearing a Navy Suit, she is identified as Jessica Smith, Client Services Vice President. |
Jessica Smith: It's easy to forget about inflation, but doing so can be costly. Recently, inflation in the US. Has been quite low, averaging only about 3% per year. But even at this relatively low rate, inflation can have an insidious effect over a long retirement. |
On the screen TV next to Jessica, a hand appears with a wallet in it, this wallet appears to have money inside, but the money keeps flying away from the wallet. |
Jessica Smith: You can think of inflation as an unavoidable cost, eating into your purchasing power each and every year. |
On the TV screen a bunch of Goods appears to have their prices increase such as cars, cameras, food, bikes and many more |
Jessica Smith: Inflation means the expenses you have today will likely cost more in the future. Typically, inflation is measured by evaluating the cost of many consumer goods and services food, cars, gas, education, housing, healthcare and seeing how the overall prices change over time. While the historical rate of inflation in the US. Has been right around 3%, some categories, such as healthcare and education, have experienced much more dramatic increases. |
On the TV screen next to Jessica, a chart appears, the chart is titled âthe impact of inflationâ the chart assumes an annual inflation rate of 3%. |
Jessica Smith: What would 3% annual inflation do to your purchasing power over time? You can see that after just ten years, what used to cost you $50,000 will now cost nearly $67,000. That's a whopping 34% increase. And over a long retirement, the impacts of inflation can be much greater. Most long-term investors want to maintain or increase purchasing power over time. To do that, you'll need to factor inflation into your financial planning. And you'll need growth to match or outpace the rate of inflation. |
In the TV screen next to Jessica, a title appears "Seven Common Retirement Investing Mistakesâ Underneath it seven points that are:
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Jessica Smith: Thanks for watching. You can check out our other six common retirement investing mistakes to learn more about what to avoid as you plan for your financial future. |
A white screen appears, with the title "Fisher Investmentsâ underneath it is the YouTube Subscribe Button. |
Jessica Smith: If you enjoyed this video, you can click the subscribe button and ring the bell to be notified when we publish new content. Thanks for watching. |
A series of disclosures appears on the screen âInvesting in Securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice or a reflection of the performance of Fisher Investments or its clients. Nothing herein is intended to be a recommendation or a forecast of market conditions. Rather it is intended to illustrate a point. Current and future markets may differ significantly from those illustrated here. Not all past forecasts were, nor future forecasts may be, as accurate as those predicted herein.â |
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