Inflation Finds its Way to Your Wallet

Inflation Finds its Way to Your Wallet Cornerstone Wealth Management

Inflation Finds its Way to Your Wallet Cornerstone Wealth Management

There’s no doubt that people have been feeling the effects of inflation on their wallets. Everything from food to gas to home repair products seems to be increasing every day. Federal Reserve Chairman, Jerome Powell, is taking inflation very seriously, raising interest rates to combat the explosion of inflation. And although the moves have made an impact, the Federal Reserve noted that inflation is stickier than it had predicted.[1]

This is all to say that inflation may be here to stay. You might be thinking, “What can I do to mitigate the effects of inflation on my wallet?” While inflation is nearly impossible to avoid, there might be ways to minimize its effects.

What Items has Inflation Hit the Hardest?

As you may know, inflation has impacted oil and gas prices, food, rent, and travel the most. To put that in perspective, meats, poultry, fish, and eggs, saw a 14.2% increase year over year, and gas saw a 30.2% increase year over year, compounded by the Russian-Ukrainian conflict. In addition, airline fares increased 37.8% due to supply chain shortages and COVID-19 travel bans.[2] And now, inflation in rent prices is showing that people are looking for homes, pushing rents and real estate prices even higher.

These numbers may not have a great shock value now, but when your budget is covering less and less of your costs of living, the effects of inflation become all too real. Although you can’t run from inflation, isolating segments of your budget and spending less on these categories can surely mitigate the costs you face. However, it’s important to understand how your income sources in retirement may be affected by inflation as well.

Inflation Hits Retirees’ Wallets and Income Streams

For working people, inflation is a question of adjusting their budget to accommodate price increases and finding income, wages, or raises in the future that match inflation. Savings don’t usually have to be withdrawn and can be invested to potentially avoid the effects of inflation. But for retirees, your savings become your income, subjecting them to the rising costs of living. This means that not only is your budget tighter now, but your income for the future may not have accounted for the rising costs of living. Couple that with a bear market, and your retirement accounts could take a large hit, further compounding the problem.

Inflationary periods are difficult for retirees to get through, but it’s not impossible. There are financial tools and investment strategies out there that can protect against inflation or other risks you may be worried about. Talking to a financial professional is your first step toward protecting your retirement.

In calm markets, it can feel easy to see your retirement accounts meet your goals. But when the water gets choppy, it’s important to have a team of experts supporting you and your retirement to help you get through unexpected economic environments. Click here to talk to us today about your retirement plan.

[1] https://www.nytimes.com/2022/07/06/business/fed-minutes-inflation-interest-rates.html
[2] https://www.forbes.com/advisor/personal-finance/inflation-40-year-high/


The article and opinions in this publication are for general information only and are not intended to provide specific advice or Recommendations for any individual. We suggest that you consult your accountant, tax, or legal advisor with regard to your Individual situation. This content was created by Lone Beacon.

Registered Representatives offer securities through Independent Financial Group, LLC (IFG), Member FINRA/SIPC. Investment Advisor Representatives offer Advisory services through Independent Financial Group, LLC (IFG), a Registered Investment Adviser. Cornerstone Wealth Management, Cornerstone Tax Advisory and IFG are unaffiliated entities.

Share This Post:
Cornerstone Wealth

SERVICES

Cornerstone Wealth

Schedule a Call

Ready to take control of your financial future? Schedule a call with Cornerstone Wealth Management today.

Join Our Mailing List

FINANCIAL INSIGHTS DELIVERED STRAIGHT TO YOUR INBOX

Birthdays Over 50 Worth Celebrating
READ OUR LATEST GUIDE

Birthdays Over 50 Worth Celebrating

Before you start planning for retirement, make sure you put these relevant dates in your calendar. Beginning at 50 years old, there are several birthdays that are essential to be aware of as they can influence your retirement timeline and overall financial plan.

The Fundamentals of Estate Planning
READ OUR LATEST GUIDE

The Fundamentals of Estate Planning

Estate planning can be an emotional process. After all, it’s difficult to think about things like who will raise your children, or which loved one will best manage your financial assets. Estate planning is necessary, however, because without a will, your estate may end up in court. This means it could be divvied up based on a judge’s ruling, rather than on your personal wishes.

Making the Transition to Retired Life
READ OUR LATEST GUIDE

Making the Transition to Retired Life

After all your years of hard work and disciplined saving, you’ve made it to retirement – congratulations! Now, the challenge becomes tackling common retirement transition concerns so that you can live out the ideal retirement you’ve dreamed of.

Addressing Market Volatility in Today's World
READ OUR LATEST GUIDE

Addressing Market Volatility in Today's World

Planning for retirement is never a “set it and forget it” task. There are unexpected disasters, market drops, and changing laws that could cause retirees to reevaluate their financial situation. Ultimately, there’s no way to predict everything that will cause market downturns. However, you can prepare yourself for one by having a solid financial strategy in place.

What to Consider in Your Charitable Giving Plan
READ OUR LATEST GUIDE

What to Consider in Your Charitable Giving Plan

Congratulations! You’ve decided to give to a charitable organization. Charitable giving is a wonderful way to help further causes you are passionate about and feel good while doing it.

The Importance of Designating Beneficiaries
READ OUR LATEST GUIDE

The Importance of Designating Beneficiaries

When life gets hectic and your to-do list seems endless, it can be easy to let financial planning details slip through the cracks. However, updates to your designated beneficiaries on 401(k) plans, IRA accounts, and other retirement assets is vitally important.

Managing Inflation in Retirement
READ OUR LATEST GUIDE

Managing Inflation in Retirement

You may have noticed that the things you buy regularly have become more costly, and you may be pondering if inflation will stay high. For individuals close to retirement or already retired, it is essential to take measures to protect themselves from the eroding effects of inflation.

Birthdays Over 50 Worth Celebrating
READ OUR LATEST GUIDE

Birthdays Over 50 Worth Celebrating

Before you start planning for retirement, make sure you put these relevant dates in your calendar. Beginning at 50 years old, there are several birthdays that are essential to be aware of as they can influence your retirement timeline and overall financial plan.

The Fundamentals of Estate Planning
READ OUR LATEST GUIDE

The Fundamentals of Estate Planning

Estate planning can be an emotional process. After all, it’s difficult to think about things like who will raise your children, or which loved one will best manage your financial assets. Estate planning is necessary, however, because without a will, your estate may end up in court. This means it could be divvied up based on a judge’s ruling, rather than on your personal wishes.

The Birth of a Grandchild
READ OUR LATEST GUIDE

The Birth of a Grandchild

Congratulations! The arrival of a grandchild is always an exciting time. Since many grandparents wish to assist in covering their grandchildren’s future financial needs, it’s also a good time to consider financial preparations for the future. If you hope to provide funds to your grandchildren, both 529 plans and trusts are beneficial options.

Cornerstone Wealth

WELCOME TO OUR NEW SITE

We've Made Some Big Changes

We’re delighted to introduce our new and improved online space tailored to elevate your online experience.

If you have any thoughts, questions, or if you’d like to schedule a consultation drop us a line. Your insights help us refine our services.

Making the Transition to Retired Life
READ OUR LATEST GUIDE

Making the Transition to Retired Life

After all your years of hard work and disciplined saving, you’ve made it to retirement – congratulations! Now, the challenge becomes tackling common retirement transition concerns so that you can live out the ideal retirement you’ve dreamed of.

Skip to content