{"id":16333,"date":"2024-01-03T09:23:10","date_gmt":"2024-01-03T15:23:10","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=16333"},"modified":"2024-01-03T09:23:10","modified_gmt":"2024-01-03T15:23:10","slug":"navigating-inflations-impact-on-retirement","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/navigating-inflations-impact-on-retirement","title":{"rendered":"Navigating Inflation’s Impact on Retirement"},"content":{"rendered":"

Inflation, often called the “silent thief of wealth”, can have significant implications for people in various stages of life\u2013especially those nearing retirement.<\/b><\/p>\n

The inflation report has recently been a hot topic, with the Consumer Price Index (CPI) revealing some noteworthy figures. In this blog, we’ll delve into what the latest inflation report means for retirees in Iowa and how they can adapt to these changing economic conditions. Here’s what you need to know.<\/span><\/p>\n

Understanding the CPI\"\"<\/b><\/h3>\n

The Consumer Price Index (CPI) is a crucial economic indicator that measures the average price change paid by urban consumers for a basket of goods and services over time. <\/span>The CPI increased by 0.1%, and on a year-over-year basis, it was up by 3.1%. <\/span><\/a>However, when we exclude the volatile food and energy prices, the core CPI showed an even more significant increase of 0.3% for the month and a whopping 4% increase over the past year.\u00a0<\/span><\/p>\n

The core CPI is a valuable metric for assessing the underlying trend in inflation because it excludes the often erratic fluctuations of food and energy prices. These two categories can experience significant short-term spikes due to weather events, geopolitical tensions, or supply chain disruptions. Consequently, excluding them provides a clearer picture of the broader inflationary trend. Let’s break down these numbers and their implications for retirees.<\/span><\/p>\n

\"\"Impact of Rising Prices<\/b><\/h3>\n

For retirees, these inflationary trends carry specific implications. Retirees often live on fixed incomes, relying on pensions, Social Security, or withdrawals from retirement accounts. Their purchasing power diminishes when prices rise, making it increasingly challenging to cover everyday expenses.<\/span><\/p>\n

The year-over-year CPI increase of 3.1% means<\/a> that, on average, the cost of the goods and services retirees typically consume has risen by that percentage. Even when we exclude food and energy prices, as the core CPI does, retirees still face a considerable 4% year-over-year cost increase. This suggests that inflation significantly affects housing and healthcare, often not included in the core CPI calculation. Consequently, retirees must account for these rising expenses in their retirement income planning.<\/span><\/p>\n

Having a Comprehensive Retirement Plan<\/b><\/h3>\n

Retirement planning <\/span><\/a>is one of the most important financial life events people need help with. Many variables are associated with planning and saving for retirement, and it can be overwhelming to plan for these later years in life. Factors like inflation can certainly affect the amount you save and invest. Given the rising inflation figures, retirees must proactively manage their finances effectively and help protect their retirement savings. Here are some strategies to consider:<\/span><\/p>\n