The cost of living in retirement is becoming more expensive and the fact remains that many Americans are not saving enough to retire at 65.
While long-term care costs, such as assisted living or skilled nursing, have been steadily increasing in price and will undoubtedly impact a retirement fund, there is another cost that will hit retirees harder. According to the Society Of Actuaries, the No. 1 threat to a person's retirement account is inflation. A study by the Society showed that inflation of just 2 percent a year can reduce a retirement fund's purchasing power by nearly 33 percent over 20 years.
In order to hedge against the impact of inflation, consumers should head to a financial institution and set up a plan for their retirement funds. One way to lessen the blow of inflation is to keep a portion of retirement savings in investments, as their returns tend to beat or keep pace with inflation.
In addition, it is important to start saving for retirement once you begin working full time, placing approximately 10 percent of each paycheck aside. It is also a good idea to increase the percentage you place in your retirement account as you get older and more importantly to budget in your personal spending money so you do not tap into retirement funds early.
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