Understanding Inflation and Its Impact
Joel Johnson, CFP® discusses inflation and the impact it causes on this week’s segment of Better Money Atlanta.
How Inflation is Measured
The Consumer Price Index measures the change in price of goods and services in the economy.
This compares the cost of something one year ago with the cost of the same thing today. For instance, if the inflation rate is at 8%, an item that was $1.00 last year now costs $1.08.
The target rate of inflation is 2%, which can be manipulated by the Federal Reserve by adjusting interest rates.
How to Plan for Inflation
Retirees need to have a retirement income plan or projection that shows how much money they need in order to keep up with inflation. Answer these questions in your retirement plan:
- How much income do you want in retirement?
- How many raises will you need to give yourself?
- What interest rate or earning rate do you need?
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Case Study: What Should My Investment Portfolio Include?
As you approach retirement, your investment strategy must shift from aggressive growth to a focus on income generation, asset preservation, and moderate growth to outpace inflation. Consider th… -
How Can I Protect My Retirement Savings from Market Volatility?
We’ve been receiving a lot of questions lately about how to best protect your retirement savings against stock market volatility. It’s easy to let recent fluctuations in the market shake your conf… -
Avoiding the Retirement Tax Trap
Once you retire, understanding your tax implications becomes even more crucial. After all, taxes don’t disappear in retirement. In fact, as you begin withdrawing from your retirement savings, you … -
Podcast Episode 406: How to Plan for a 30-Year Retirement
Prefer to watch? Click here to watch and listen on YouTube. The retirement landscape has changed dramatically. Today’s retirees bear much more of the responsibility for securing their financial… -
What Should I Watch Out for When Reviewing My Retirement Tax Return?
Now that tax season is over and your return is filed, you may be wondering what you need to review in preparation for next year, especially if you’re approaching retirement. In this week’s Mone… -
Retiring In Uncertain Times
During times of economic uncertainty, it’s natural to feel overwhelmed. It seems like every day there’s a new update from the markets. But rather than reacting to the noise, focus on why you have … -
How Do Tariffs Affect the Stock Market?
If you’ve been tuned into the news lately, you’ve probably heard a lot about tariffs. The current administration’s latest economic push has introduced a wave of uncertainty in the market. But what… -
How Do I Get Out of Debt Fast?
Most people with debt want to get out of it quickly and efficiently. To do that, you first need a clear understanding of your financial situation. Second, you need a clear, actionable plan. In … -
Why Do I Need to Account for Inflation in Retirement?
Today’s question is: What is inflation and why is it important to account for in my retirement plan? Inflation is the rising cost of goods over time. Meaning, it will cost you more money next year… -
How Does a Tax Return Work?
As tax season concludes, it’s a good time to refresh your tax knowledge. In this week’s Money Wisdom Question Series, Ian Fergusson, RICP® discusses how filing your taxes works and why it’s essen…
