Inflation and Your Retirement

Even if your retirement is years away, it’s important to understand how inflation can affect your retirement savings. You probably know that inflation can depreciate your savings over time. But, how seriously do you consider the impact of a decrease in the purchasing power of your money on your future plans? At 3% inflation, $100 today will be worth only $67.30 in 20 years, which is a loss of one-third of its value. At 35 years, this amount would be further reduced to just $34.44. Therefore, in order to outpace inflation, your long-term retirement strategies must account for a decrease in the purchasing power of the dollar over time.

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