Checklist – Managing Retirement Savings in Tough Times

Inflation Checklist: Tips to Manage Retirement Savings in Tough Times

How Inflation Affects Retirement Savings

The most immediate impact of inflation on retirement savings is that it erodes one's purchasing power. Over time, inflation reduces the value of money, meaning the dollar today will buy less in the future than it does now.

While inflation might seem like an abstract concept, it can have a real and tangible impact on one's retirement savings. Several practical strategies may help manage this risk as retirement savings are drawn down over time.

Inflation Checklist for Retirees

· Purchase inflation-indexed annuities - These annuities contain an inflation rider purchased at an additional cost and are designed to help protect investors from inflation. The annuity's indexed interest rate is adjusted based on changes in the inflation rate.

· Diversify the retirement savings portfolio - Investing in a mix of assets, especially those that tend to do well during inflationary periods, can help protect one's purchasing power.

· Keep a long-term growth component – Historically, stocks have outpaced inflation over long periods, though not in every period, and they carry greater short-term volatility. Past performance is not indicative of future results. A financial professional can help determine what mix is suitable for your situation.

· Use a flexible withdrawal strategy – Adjusting withdrawals each year based on inflation, market performance, and spending needs may help savings last longer than a fixed withdrawal amount.

· Consider a part-time job or side business - If you're healthy and able, working in retirement can provide more income to help keep up with rising costs.

· Factor in Social Security COLAs – Social Security benefits receive annual cost-of-living adjustments tied to inflation, making them an important source of inflation-adjusted income. Delaying Social Security increases the base benefit those adjustments apply to. Arizona does not tax Social Security benefits.

Inflation and Retirement FAQs

Do Social Security benefits keep up with inflation?

Social Security benefits receive an annual cost-of-living adjustment (COLA) based on the Consumer Price Index. However, rising Medicare premiums and costs that grow faster than the index can offset part of the increase.

What's the difference between TIPS and I bonds?

Both are U.S. Treasury securities designed to help with inflation. TIPS are marketable bonds whose principal adjusts with inflation, and their prices can change if sold before maturity. I bonds are savings bonds with an inflation-adjusted rate, limited annual purchase amounts, and early-redemption restrictions.

Understanding how inflation affects retirement savings and planning for it can help manage its impact on your retirement. The key is to plan for inflation now, so it doesn't derail your retirement income plan later.

Remember, it's always a good idea to speak with a financial professional when making important decisions about your retirement plan. They can help tailor a plan to your needs and circumstances to help you prepare for inflation and other financial challenges.

Is Your Retirement Plan Ready for Inflation?

Schedule a complimentary consultation with J. Martin Wealth Management at (480) 630-6177. Serving clients in Chandler, Gilbert, Maricopa, and Gold Canyon.

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Jeff Martin, CRPC®, is President of J. Martin Wealth Management, LLC and an Investment Adviser Representative of Tucker Asset Management LLC and a licensed insurance agent. As a fiduciary financial advisor, Jeff helps individuals and families in Chandler, Gilbert, Maricopa, and Gold Canyon with retirement, income, investment, and tax planning.

Schedule a complimentary consultation or call (480) 630-6177.

Disclosure: Opinions expressed reflect the author's views as of the date of publication and are subject to change without notice. This material is for informational and educational purposes only and is not a recommendation, an offer or solicitation to buy or sell any security, or personalized investment, tax, or legal advice. Strategies discussed may not be suitable for every investor; consult your own tax and legal professionals before acting. Investing involves risk, including possible loss of principal, and no strategy can guarantee a profit or prevent losses. Past performance is not indicative of future results. Information from third-party sources and linked websites is believed to be reliable but is not guaranteed. This content may not be reproduced without written permission from J. Martin Wealth Management.

Tax laws are complex and subject to change. Consult a qualified tax professional about your situation. TIPS and I bonds are backed by the U.S. government as to timely payment of principal and interest; TIPS sold before maturity may be worth more or less than their original cost. Annuities are long-term insurance contracts that may include surrender charges, fees, and limitations, and guarantees are based on the claims-paying ability of the issuing insurance company. Insurance and annuity products are offered separately from advisory services, and Jeff Martin is a licensed insurance agent and may receive commissions on their sale. J. Martin Wealth Management and Tucker Asset Management LLC are not affiliated with or endorsed by the Social Security Administration or any government agency.

Investment advisory services are offered through Tucker Asset Management LLC (CRD #174844), an SEC-registered investment adviser. J. Martin Wealth Management is independent of Tucker Asset Management LLC. Registration does not imply a certain level of skill or training. For more information, including Form ADV and Form CRS, visit adviserinfo.sec.gov/firm/summary/174844 or call (480) 630-6177.