Author: Charlie Eissa

Retirement savings are the backbone of any successful and peaceful retirement, so it is vital retirees stay up to date on any economic processes that may affect them.

There are many options for retirees to be proactive about protecting their savings from rising income inflation, such as delaying filing for social security, adding I-bonds to their portfolios and avoiding holding too much cash at once. With the forecasted recession in the future, those set to retire should do all they can to educate themselves on their options.

In this article, Charlie Eissa will explain income inflation, how it can affect retirement savings and what can be done to lessen the damage.

How Income Inflation Affects Retirement Savings

Situations such as an increase in the money supply of an economy, an increase of demand for services, goods, and materials (such as due to supply-chain issues), rising wages, etc. all have caused increasing inflation in the US. Economists predict that a recession is looming with the rate at which inflation is rising.

Income inflation can affect retirement savings in numerous negative ways, some being by diminishing their purchasing power. This lessens how often they can afford lifestyle expenses which are paid for by different investments they have made through investment portfolio distributions.

Protecting Retirement Savings from Income Inflation

Since high rates of inflation can so greatly affect a retiree’s affordability for basic needs such as healthcare and groceries, they may need to draw from their retirement savings more frequently than they first anticipated. Luckily, there are a few things retirees can do to protect their savings from income inflation.

Delay Filing for Social Security

The first thing retirees should consider when attempting to better protect their money from income inflation is to delay filing for social security. This is because there are penalties that accompany drawing upon social security before certain ages. For example, those who retire as early as 62 risk losing 30% of their benefits.

Invest In Some I-Bonds

I-bonds are a way for investors to park their cash somewhere it can grow at a fixed annual rate. This gives retirees a good opportunity to put their money in a place where it will not be affected by the nearly guaranteed future recession and the rising inflation before it. The annualized rate in October 2022 was 9.62%, a great investment for anyone looking to protect their savings.

Refrain From Holding Too Much Cash

Simply put, holding onto too much cash at once can significantly lower return on assets. With lower return on assets during retirement, this will also increase the amount of out-of-pocket cash needed to finance their lifestyle.

The more cash that retirees invest into different accounts, the more they can ensure that they increase their return on assets. Doing this will help to maximize the amount of profits they gain from investing in stocks while simultaneously utilizing their cash in a way that in turn earns them more cash.

Summary

Although inflation and a forecasted recession are likely to cripple many financially, retirees can not only survive in these environments if they prepare accordingly.

By refraining from drawing upon their social security for as long as possible, investing in fixed-rate I-bonds and refraining from holding onto too much cash, retirees can ensure their savings stay as safe as possible

There are quite a few variables to consider when striving to retire successfully, so prioritizing smart and efficiently is the biggest key.

Factors such as planning and preparation, maintaining good mental and physical health, having a purpose after retirement, being flexible and adaptive, and relationships and social interaction all play large roles in successfully retiring.

In this article, Charlie Eissa will explain each factor to consider for retiring successfully and how to nourish each area of retirement to accomplish this goal.

Planning And Preparing for Retirement

To retire successfully, planning and preparing is a must! It is recommended that those interested in retiring without a hitch, plan and begin retirement preparations such as saving money and sticking to a budget, knowing what will be needed during retirement and planning for those needs financially.

Additional ways to prepare for retirement include:

• Set up a will and advance directive
• Follow retirement and personal finance blogs
• For the tech savvy, download money-saving apps
• Think about possible retirement employment to keep busy
• Pay off as much debt as possible as quickly as possible
• Utilize a 401(K)
• Identify and plan for retirement dates
• Start planning and preparing for retirement as soon as possible
• Begin investing aggressively
• Setup automatic investment bank transfers to avoid delays in investing and reduce spending

Maintaining Good Mental and Physical Health

One can only enjoy a successful retirement if they’re healthy. It is of great importance that those wanting to enjoy their retirement put a big priority on maintaining their physical health with exercise and refraining from harmful substances and inflammatory diets. Retirees should also get regular physical examinations from their doctor, take vitamins, and stay hydrated.

Additionally, they should care for their mental health by seeking therapy when needed, doing things they enjoy as well as solitary activities such as journaling, knitting, meditating, yoga, cleaning, painting, drawing and more. It is also important to follow-up with people regularly and receive social interaction.

Being Flexible and Adapting to Change

To successfully retire, those who are seeking their best life should take heed to remain adaptable and flexible. As life can be turbulent, retirees must be prepared to face unexpected and possibly even devastating circumstances and still remain steadfast. Some good advice to those retiring might be to “expect the unexpected”.

Those preparing to retire should embrace learning and always seek new ways to get information. They should also take risks frequently and push themselves out of their comfort zones. This not only helps to boost self-confidence, but also helps the brain itself become more adaptable and comfortable with risk-taking and the unknown.

Relationships And Social Interaction

When retiring many people witness a decline in the number of people in their social support network, as it removes them from the workplace and distances them from their past coworkers, and friends. This calls for a need to pay special attention to one’s social life, being sure to continue to reach out to friends, family, and even old coworkers. Be sure to make time for the important people in life.

Other things retirees can do to enhance the social aspect of their retirement is to involve themselves in social activities such as online meetups, exercise classes, sports, chess and reading clubs, eating, hunting, fishing, and wood crafting, and so on. Being active in a social hobby guarantees retirees stay socially healthy and happy.

Studies have shown that good, quality relationships are an important factor to living a long, healthy life. Additionally, studies have shown that those who have satisfying relationships have fewer health problems and are at less risk of depression and cognitive decline. Therefore, it’s worth getting out there and calling up old friends, even more so during retirement.

Summary

Successfully retiring involves a multitude of factors, but prioritizing is key. By focusing on important areas of retirement such as planning and preparing, maintaining good mental and physical health, being flexible and adaptable to change and continuing to foster and nurture social relationships, retirees can guarantee themselves a successful retirement.