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M.A. Kluemke and Associates

Do you understand the impact of inflation?

Do you understand the impact of inflation?

Whether you’re saving for retirement, your children’s education, or for any other long-term goal you need to understand how inflation can impact your savings.

Inflation, in a nutshell, is the increase in the price of products over time. Inflation rates fluctuate. Sometimes inflation runs high and other times it’s hardly noticeable. The issue - when it comes to savings - is the impact of long-term inflation.

Over time inflation erodes the purchasing power of your income and wealth. Even as you save and invest, your accumulated wealth buys less and less over time. For those of us that have put off saving and investing we will be impacted all the more.

It’s important to diversify your portfolio; spending your assets across a variety of investments that respond differently to market conditions is one way to help manage inflation risk. However, diversification does not guarantee a profit or protect against a loss, but it is a method used to help manage investment risk.

If you plan to pursue higher returns, through your portfolio, you need to consider whether you have the financial and emotional ability to ride out the ups and downs. The longer you live, the more likely you’ll se the impact of inflation on your money. It is important that your money works hard for you and keeps up with inflation. You should take less risk with the money you’ll need soon and be willing to take more risk with assets that you don’t need for a while.

There are ways to help combat inflation. Just give us a call and we’ll walk you through strategies that suit you and your retirement goals. You can contact us at 217.679.1043 or email info@makluemke.com

By Mark Kluemke

Check the background of this financial professional on FINRA's BrokerCheck
Check the background of this financial professional on FINRA's BrokerCheck