Public Enemy Number One:
Inflation!!
Inflation is a big problem. While you're working,
it doesn't seem like any
big deal because you are on an increasing income. You do get
raises, however infrequently.
When you are finally retired and on a fixed income, your buying
power will decrease. This
is nothing to wait and be surprised about! If Inflation grows at
its current rate your
assets in a passbook savings account or a certificate of deposit
are stagnating.
Monthly Inflation
Although Inflation has gone up and down it has always averaged
at least 3.5% per year
(a real average of 5.9%). This is a small number with Big
Impact. Just
think back to when a '67 Mustang cost $3,500. Have you seen that
Ford lately? Try $30,000.
Cumulative
Inflation
Some people tell me, "I'll have everything paid for when I retire."
With the average life expectancies growing, you need to prepare
for the long-term effects of inflation. In other words, don't outlive
your money! For more information on inflation and on how inflation
will affect your retirement or savings, visit BCI Data.
