Protecting Your Retirement Account From Inflation

Retirement Planning Tip #166:

The challenge for retirees is to not run out of money while creating a stream of income that is predictable, sustainable and increasing to keep pace with or outpace inflation. Even at a low inflation rate of say 3%, you’d need to double your income in about 20 years just to maintain the same standard of living you have today.

Past performance is no guarantee of future results, but as of now, the equity markets have been the only place that have consistently delivered returns above inflation over long periods of time. That’s why it’s so important to maintain at least some portion of your money in the equity (stock) market. Of course when you have 40%-60% of your money in the stock market, you’ll be subject to market risks too.