The 4-step Bulletproof Inflation-protection Strategy for Retirement

(don’t forget to checkout the video of this blog too)

Inflation is a big concern for people heading into retirement 🫣

….and it should be‼️

Inflation can erode away your retirement income over time leaving you less money as you get older.

The good news is that there are ways to protect yourself from the negative effects of inflation.

Here is my 4-step Bulletproof Inflation-protection Strategy:

✅ Determine Your True Desired Income in the Early Years of Retirement

This is more important than many people realize….

You need to know exactly how much fixed income you’ll need in retirement.

You also need to have a good idea of what you WANT to be able to spend in retirement, or what I refer to as retirement lifestyle expenses.

Retirement lifestyle expenses are expenses beyond the fixed income required in retirement and often include things like: travel, gifting money to children, new cars, new hobbies, etc.

The early years of retirement (the first 10–15 years) are typically going to be your years of peak spending…

So if you have done proper Retirement Income Planning for the early years of retirement, as your spending decreases in the middle of retirement that provide a good hedge against the eroding effects of inflation.

✅ Give Yourself Adequate Exposure to the Market

Safety feels great going into retirement but you don’t want to be TOO SAFE with all of your money.

Having a segment of your wealth protected from market losses is very important, especially if it’s your retirement income, but you also need money in the market to fend off inflation.

The market is one of the best tools for long-term growth (it’s just not the most effective environment for generating the bulk of your retirement income).

So exposure to the growth-potential of the market is a very effective way to ensure that a portion of your retirement wealth is (hopefully) outpacing inflation during retirement.

✅ Minimize Taxes in Retirement

Be strategic with your various sources of retirement funds (here’s a blueprint for how to do just that).

This means creating an effective income withdrawal strategy that keeps your tax bill as low as possible (keeping more of your hard-earned savings in YOUR pocket).

Strategically managing your tax bill in retirement is a great way to increase your retirement income which can also allow additional funds to stay invested in the market for growth (giving you a much higher likelihood of growing your assets beyond the deteriorating effects of inflation over time).

While it’s often difficult to achieve a completely tax-free retirement, you can still minimize your tax bill as best as possible ensuring you are not giving away money unnecessarily.

✅ Don’t Take Retirement Income Too Early

Social Security Income, annuity income, and sometimes even pensions will continue to grow well into retirement.

These income sources are typically growing at an annual rate that is often a lot higher than inflation each year….

SO, LET THEM!

Having sources of income growing at a guaranteed rate that is outpacing inflation, is a very powerful strategy to ensure that your retirement savings last all the way through retirement and are adequate, especially in the later years of retirement.

Let’s chat 💬😎