{"id":301949,"date":"2021-07-18T01:32:00","date_gmt":"2021-07-17T22:32:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/retirement-hacks-planning-for-retirement-you-should-also-plan-for-inflation\/"},"modified":"2021-07-18T01:32:00","modified_gmt":"2021-07-17T22:32:00","slug":"retirement-hacks-planning-for-retirement-you-should-also-plan-for-inflation","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/retirement-hacks-planning-for-retirement-you-should-also-plan-for-inflation\/","title":{"rendered":"#Retirement Hacks: Planning for retirement? You should also plan for inflation"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a39d5374ed2a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a39d5374ed2a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/retirement-hacks-planning-for-retirement-you-should-also-plan-for-inflation\/#Some_investors_may_want_to_be_more_attentive_to_the_risks_of_inflation_than_others\" >Some investors may want to be more attentive to the risks of inflation than others<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/retirement-hacks-planning-for-retirement-you-should-also-plan-for-inflation\/#Alessandra_Malito\" >Alessandra Malito<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Retirement Hacks: Planning for retirement? You should also plan for inflation<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Some_investors_may_want_to_be_more_attentive_to_the_risks_of_inflation_than_others\"><\/span>\n  Some investors may want to be more attentive to the risks of inflation than others<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000337944\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000337944\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Whether retirement is two years away, 10 years away or three decades away, inflation will affect how you save and spend your money in the future \u2014 that\u2019s why you should factor it into your calculations if you can.\u00a0<\/p>\n<p> <strong>Retirement Tip of the Week: Choose your investments and your savings vehicles wisely when putting money away for retirement, not only for potential returns but so that those assets are working for you and against the loss of purchasing power.\u00a0<\/strong><\/p>\n<div class=\"paywall\">\n       In June, the cost of living saw its largest spike since 2008, which means the purchasing power of the dollar toward various goods has dwindled. Used cars accounted for more than one-third of the rise, but the cost of food, clothing and plane tickets also sharply climbed, according to the Bureau of Labor Statistics.\u00a0<\/p>\n<p>Read: What inflation means for your retirement<\/p>\n<p>Inflation affects everyone differently, said Brian Schmehil, a certified financial planner and director of wealth management for The Mather Group. \u201cEach household has their own specific inflation risk since it will depend on their budget and the type of assets they own,\u201d he said. \u201cHouseholds wanting to purchase a second home later in life, spend a higher percentage of their budget on healthcare or have smaller <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security benefits, may have a higher inflation risk to their retirement plan than others that do not.\u201d\u00a0<\/p>\n<p>Keep in mind, there\u2019s also no certainty regarding inflation and what it will be like in the future. \u201cThe bond market makes active predictions on what inflation will be like in five, 10, 20 years,\u201d MarketWatch columnist Brett Arends said during a recent <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bigmarker.com\/barrons-events\/July-14-MarketWatch-The-Meaning-of-Money\" class=\"icon none\">Barron\u2019s Live even<\/a>t. \u201cThese are the best forecasts of inflation that we have, and they\u2019re much more important I would argue than one month\u2019s reading or three month\u2019s reading.\u201d The inflation spikes the government is currently seeing could be a direct response to the temporary shortages as a result of the pandemic, he said.<\/p>\n<p><strong>See:<\/strong> How to invest in a Roth IRA like \u2014 and unlike \u2014 PayPal co-founder Peter Thiel<\/p>\n<p>One of the best defenses against inflation: A well-diversified portfolio, said Sergio Garcia, a certified financial planner at BFS Advisory Group. Cash savings is best for short-term expenses and emergencies, but the younger the investor, the more focused she should be on equities and growth in an investment portfolio, he said.\u00a0<\/p>\n<p>Younger investors, with a decades-long horizon until retirement, do not have to worry as much about inflation right now as their older counterparts, said Seth Mullikin, a certified financial planner and founder of Lattice Financial. \u201cFirst, younger investors are still earning money and will likely see their income rise with inflation,\u201d he said. \u201cSecond, young people tend to have a higher allocation to stocks than retirees, which will perform better than a fixed-income portfolio.\u201d Instead, younger investors should focus on maintaining a healthy savings rate that will allow them to meet their goals, he said.\u00a0<\/p>\n<p>But conservative investors \u2014 those who may be afraid of putting too much of their portfolios in stocks and other equities regardless their age \u2014 should take note from the advice given to younger investors, Mullikin noted.\u00a0\u201cStocks tend to keep up with inflation over time, so even conservative investors should hold some stocks,\u201d he said.\u00a0<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Older investors closer to retirement are typically advised to reduce the risk in their portfolios by gradually shifting to more fixed-income assets, like bonds, because they have a shorter period of time until they retire (and they\u2019ll need their money to be there for them sooner).\u00a0<\/p>\n<p>Still, they should be diligent when considering their investment choices. \u201cIn environments with rising rates, it is important for those investors to consider the allocation within the fixed income portion of their portfolio and possibly reduce duration in bonds, and in some cases, reduce exposure to fixed income in favor of equities,\u201d Garcia said. To ensure they meet their cash flow needs, near-retirees and retirees should keep \u201cadequate\u201d cash on hand in an account they can easily access. This allows their investments to be protected against long-term inflation, he said.\u00a0<\/p>\n<p><strong>Have a question about your own retirement concerns? Check out MarketWatch\u2019s column <\/strong><strong>\u201cHelp Me Retire\u201d\u00a0<\/strong><\/p>\n<p>Treasury Inflation-Protected Securities, also known as TIPS, is one investment option that helps offset inflation, Mullikin said. Deferring Social Security can also beat inflation, Schmehil said. \u201cThis will help combat inflation since a larger share of your expenses will now be covered by a government program that has a COLA (cost-of-living adjustment).\u201d\u00a0<\/p>\n<p>Another hedge against inflation is homeownership. \u201cBuying a home with a fixed-rate mortgage will \u2018lock in\u2019 the majority of your housing costs, and you will build equity,\u201d Mullikin said. \u201cThis is because the principal and interest portion of your mortgage will remain the same throughout the term of the mortgage.\u201d<\/p>\n<p>Homeownership \u2014 although expensive and for many Americans, unaffordable or un<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ealing \u2014 as a means of inflation protection only works if the owners intend to stay in their houses for the next decade or so, said John Scherer, a certified financial planner and founder of Trinity Financial Planning. But those who have bought in recent years may benefit most of all if so, since mortgage rates have been relatively low. \u201cWith inflation, the price of food, cloth and fuel all go higher, while the cost of housing (not including taxes and insurance of course) stay fixed,\u201d he said.<\/p>\n<p><strong>Want more actionable tips for your retirement savings journey? Read MarketWatch\u2019s <\/strong><strong>\u201cRetirement Hacks\u201d<\/strong><strong> column<\/strong><\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Alessandra Malito\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Alessandra_Malito\"><\/span>Alessandra Malito<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7528-18EA4AFA84FD%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Retirement Hacks: Planning for retirement? You should also plan for inflation&#8221; Some investors may want to be more attentive to the risks of inflation than others Whether retirement is two years away, 10 years away or three decades away, inflation will affect how you save and spend your money in the future \u2014 that\u2019s why&#8230;<\/p>\n","protected":false},"author":1,"featured_media":301950,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-301949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/301949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=301949"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/301949\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/301950"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=301949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=301949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=301949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}