Many people are concerned about inflation on a national and global level. On a personal level, inflation unquestionably affects how much your retirement dollars will be worth. Over time, it can seriously dwindle your nest egg, which is the opposite of the direction you’re trying to go in.

With that in mind, I wanted to offer some helpful guidance regarding inflation’s impact on your retirement. You can also take some steps to mitigate its impact, which I also wanted to share.

Inflation’s impact on retirement

• According to research, a 1% inflation rate over twenty years would eat up $34,406 of your Social Security benefits alone (LIMRA, 2016). If the inflation rate increases to 3%, the difference would be over $117,000.
• In 2018, the Centers for Medicare and Medicaid Services estimated that healthcare expenditures increased by 4.6% over the previous year. Over that same period, inflation averaged 2.4%. Translation? Even when inflation is low, you may be hit harder than others because the expenses that affect you most continue to rise.
• Healthcare isn’t the only thing that can drive up your expenses. Housing, travel, and supporting children and grandchildren also influence how much you spend and how fast your retirement savings deplete.

How to mitigate inflation’s effects

• Consider downsizing. Trading in a larger home for a smaller one, even if the mortgage is paid off, reduces your costs associated with property taxes, utilities, homeowners insurance, and maintenance.
• Expand your investments 1. Add investments to your portfolio that may increase in value as inflation rises, such as Real Estate Investment Trusts (REIT) or energy sector stocks.
• Balance with bonds 2. Balance stock investments with more conservative options, such as bonds.

Inflation can lessen your retirement savings, but it doesn’t have to affect your dreams for the golden years.

The information contained in this material is for general information only and are those of the author, and not a recommendation or solicitation to buy or sell investment products. This material was developed and produced by Levitate which is not affiliated with the named broker-dealer. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.

1 REITs and energy sector stocks are subject to various risks such as illiquidity and property devaluations based on adverse economic and real estate market conditions and may not be suitable for all investors. A prospectus that discloses all risks, fees and expenses may be obtained from your financial professional. Read the prospectus carefully before investing. This is not a solicitation or offering which can only be made in conjunction with a copy of the prospectus. 2 The return and principal value of bonds fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their origin.

Sincerely,

The Trademark Capital® Team

This material is intended for informational purposes only and should not be construed as legal, accounting, tax, investment, or other professional advice. Trademark Capital’s investment strategies are built using quantitative, proprietary algorithms that are designed to identify and react to changing market conditions. However, investors should be aware that no investment strategy or risk management technique can guarantee returns or eliminate risk in any given market environment. As with all investments, Trademark Capital Management’s investment strategies are subject to risk and may lose money. The investment strategies presented are not appropriate for every investor and individual clients should review with their financial advisors the terms and conditions and risk involved with specific products or services. Due to our active risk management, our managed portfolios may underperform during bull markets. Past performance is no guarantee of future results.