Inflation? Yeah, we learned about it in Economics class, but did any of us really think we’d be dealing with it in our lifetimes? Or think it would last this long?
Ever heard of the Great Inflation? The Great Inflation occurred between 1965–1982 and was the defining macroeconomic period of the second half of the twentieth century.
Wait. What? 17 years?!!! Here is some perspective:
- The Federal Reserve began to rethink economic policy due to this long period of inflation.
- These new policies helped lower inflation and stabilize the economy.
But with 2022 inflation rates, we need the appropriate know-how to stay ahead and keep our retirement and lifestyle goals on track.
Through June of 2022 according to the Bureau of Labor Statistics, inflation rate is 9.1%. So, assuming we may be dealing with this for a number of months or years, let’s start with some lifestyle changes to help stay ahead.
- Decrease spending on non-essential products and services.
- Reduce driving time given the massive increase in fuel costs.
- Ask for a merit increase in pay at your current job or look for other options?
Beyond these “non-investment” adjustments, there are also saving and investment vehicles that can be leveraged to combat high inflation and keep us on track.
- I Bonds - I bonds are at an annual percentage yield interest rate above 9% as of July 1, 2022.
- TIPS - Treasury Inflation-Protected Securities, or TIPS, change in value with inflation.
- Gold - Gold can be a hedge against inflation.
I Bonds, TIPS, and Gold are not FDIC insured.
Make sure to seek counsel from your financial advisor or institution for specific strategies to optimize your financial health, especially during uncertain times.