This week, I’m talking about why inflation matters in retirement.

Today, I’m talking about bulwarks against inflation. What can you invest in that will help safeguard your retirement from the harmful effects of inflation?

• I’ll just start off with the most obvious and well-known protection against inflation - gold and other precious metals. But gold’s ability to protect you against higher inflation is limited, because owning too much gold comes with it’s own set of problems.
• A better protector against inflation is your stock portfolio. Yes, just by maintaining a meaningful % of stocks in your portfolio, you can protect yourself against inflation, since stock market returns outpace inflation by a wide margin over time.
• TIPS or Treasury Inflation-Protected Securities are US Govt bonds that have an inflation protection component to them.
• Real estate is another way to protect against higher inflation, especially if you own income-producing rental properties, because you’ll likely be able to increase rent in an inflationary environment, which will lessen the blow of inflation on your bottom line.

Lastly, the prospect of higher inflation in retirement should prompt you to get aggressive in paying down your debt, so you’re not stuck with a mortgage, car payments, etc. when the cost of groceries and other necessities go up. The more flexibility you have with your spending in retirement, the less inflation will be a problem for you in retirement.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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