Did you know that your retirement plan is always under threat from inflation? This is why it is not enough to have a retirement plan, you must take it a notch higher by ensuring your retirement savings are shielded from the risk of inflation.
Regardless of the economic dynamics of the country you reside in, your dream of a good life, trips to exotic places and having the adventures of a lifetime with family and friends can become unreachable if you do not deliberately safeguard your retirement plan from inflation.
While you cannot control the economic trajectory of your country and the world, you can largely determine the effect it has on you in retirement. To avoid regrets in old age, here are some strategies to protect your retirement years from inflation.
Invest in Fiscal Portfolios
Guard your savings against the diminishing currency value of inflation by investing in fiscal portfolios that rise with inflation. Some investment products may pace with inflation more than others - study them, and plug into them. Focus on the long-term outcome of such investment as opposed to the short term.
Some investment vehicles that fall under the categories of safe, medium, and aggressive levels of investment risk like treasury bills, bonds, dividend-paying stocks, and real estate could protect you against the adverse effect of inflation because their value rises with inflation.
Real estate is one investment that keeps pace with inflation, sometimes even outpace inflation. Buying your own home helps to avoid the recurrent rental fees and most importantly the increasing nature of the fee due to inflation.
Also, investing in real estate yields increasing returns that keep appreciating even during inflation. With this source of income, you can sustain and protect your purchasing power.
Real estate is one investment that keeps pace with inflation, sometimes even outpace inflation. Buying your own home helps to avoid the recurrent rental fees and most importantly the increasing nature of the fee due to inflation.
Work in Retirement
Another strategy to shield you from the effect of inflation is to keep working in retirement. It may not be active work, but something to take care of your basic needs is required. By working in retirement, you will be receiving salaries and benefits that keep rising with inflation. These extra years of working protect you financially from the full impact of inflation on your other investment portfolios.
Other brilliant and alternative ideas for protecting yourself from inflation include making yourself as self-sufficient as possible. Buy now durable household items you will need in the future, because their prices may likely increase later.
Avoid the culture of having to buy everything you need; cultivate a home garden, grow your food. If possible, raise livestock like chickens, rabbits, and the likes. This will insulate you against inflation.
Ensure that most of what you do, and where you go regularly or daily are within your community to avoid regular long-distance trips and the cost that comes with it. This helps to reduce your expenses and any potential rise in items like gas, car maintenance etc.
Avoid the culture of having to buy everything you need; cultivate a home garden, grow your food. If possible, raise livestock like chickens, rabbits, and the likes. This will insulate you against inflation.
And lastly, always seek professional advice. The importance of expert input cannot be overemphasized. The easiest way to avoid regret in old age starts with seeking professional counsel. At Oak Pensions, we understand this aspect of your life's critical need and so we have crafted a unique service to attend to this need; Retirement Pensions Advisory Service. Through this product, we offer retirement advisory services to our various customers. You can reach our dedicated team of professionals via our multiple channels; Telephone helplines, Written Enquiries, Website and Face Chats.
ABOUT THE AUTHOR:
Ernest Ademola Ehigie is a Copywriter, Content Developer, Author, Brand Consultant, and Communications Manager with over 5 years in marketing communications. He has written several articles, policy documents, press releases, radio and TV adverts for businesses and organizations. He's the author of the book, "Why You Must Lead" and currently works as a content manager for Detail and Avedia, a leading retail and media consulting firm.
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