Retirement Roadblocks: Same Money, Less Power

Same Money, Less Power: Seven Retirement Roadblocks Series

After many years of providing financial literacy resources and coaching, I’ve noted a few of the recurring mistakes that so many people make that put their finances in a risky place. Over the course of the next seven weeks, we’ll dive into the seven financial roadblocks that prevent or delay retirement. 

As we dive deeper into each one, you’ll learn just how avoiding these financial risks will help you build a solid foundation and improve your personal finances, all while preparing yourself for retirement. These seven roadblocks, or mistakes, can have a devastating effect on your standard of living during retirement. 

Not a lot of people are aware, but retirement length can be just as long as the years you’ve worked, so you have to be sure that your money is prepared and lasts for the remainder of your lifespan. So, what’s the first roadblock we face in retirement planning? Inflation.

Inflation is defined as the rising of goods and services. 

It means having the same amount of money, but as the years go by, that money holds less power. 

How do we maintain the power of our money? 

Step 1: Avoid the mistake of having less money, while the cost of living continues to rise annually. 

As you are no longer working in your retirement, your monthly income is very important. It needs to last the remainder of your life span--20, 25, or 30 years. Depending on the different streams of income that you may have, like social security, employment, real estate, etc, the payments you receive may not cover the cost of inflation. After all, your payments stay the same, while the cost of living rises. So, you have to determine how to supplement the income you are receiving to last the remaining 20-25 years of your lifespan.

For example, Social Security has a cost of living factor, so it will increase based on the country’s cost of living average. While your pension, 401k, etc. may remain the same, causing that money to lose power as the cost of living grows. Many times, retirees forget to take into account the cost of living going up. Other times, retirees misguide the number of years that they are going to live in retirement.

While saving for retirement, we must account for an income increase to keep up the pace of the goods and services going up.  We want to mitigate those issues of inflation as they come each year. 

Your retirement income is, for the most part, stable for the remainder of your life.  

Let us help you maintain the power of your money throughout your retirement years. Book a complimentary consultation today.