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Series 5 3

Series 5 3

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Published by Jessica Clare

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Published by: Jessica Clare on Jun 12, 2013
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Discover Te Hidden Risk In Your Retirement Plan
CALCULATING THE IMPACT OF INFLATION
Many Retirees Will Outlive Teir Income... Will You Be One of Tem?
Brought to you by Gary L. Williams
CRD # 4699628
 
Inflation: The Silent Retirement Killer
Ination is oen times called the silent killer o otherwise healthy retirement plans It’s like a slow-growing cancer thatdrains your fnancial strength and depletes your purchasing powerWhen you see prices go up, ination is oen thecause Unortunately, many retirees realize too late that uture dollars have less value than current dollars For example,today you can buy a tube o toothpaste or about our dollars In fve years, that same tube o toothpaste may cost yousix dollars And in ten years, it could cost eight dollars
Greg McBride, senior nancial analyst at Bankrate.com said, "I infation averaged 5 percent, it would cut your buying power in hal in just ourteen years.In that scenario, a retiree living on $70,000/year today would actually need $140,000/year ourteen years rom now!Te bottom line:
I you’ve planned your retirement income based on what today’s dollars can buy, you will likely end up with signifcantly LESS money when you need it most – in your later retirement years
Consumer Price Index (CPI):
Measures ination at the retail level. The CPI, whichtracks the total cost of retail goods and services, is the one most often reported bythe media. It is published monthly by the US Bureau of Labor Statistics.
Producers Price Index (PPI):
Measures ination at the wholesale level, and thereforemay also predict future retail prices. However, wholesalers may not always pass the fullincrease along to retailers during a sluggish economy or when they think the increaseis temporary. Published monthly by the US Bureau of Labor Statistics.
Gross Domestic Product Defator (GDP Defator):
The broadest indicator. Itmeasures prices for all nished goods produced domestically, including those forgovernmental purchase, capital investments, and net exports. The GDP Deator isproduced by the US Department of Commerce.
Measures of Inflation
Many Retirees Will Outlive Teir Income
- Calculating the Impact o Infation
1
One of the most logical ways to understand ination is to measure the change in yourability to buy something common. The three most widely used measures of ination in theU.S. are:
 
I infation averaged vepercent, that would cut your buying power inhal in ourteen years.
Many Retirees Will Outlive Teir Income
- Calculating the Impact o Infation
2
George Bernard Shaw

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