What do statistics say about Americans?

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Yes, Americans are living longer than ever before. That means you need to plan for a long life, and potentially a long retirement and likely deal with all the challenges of aging. At the most personal level, it’s about your health and quality of life. It’s also all about your purchasing power and the damaging impact of inflation on that ability to support your needs and quality of care.

“Inflation,” according to Crossing Wall Street‘s Eddy Elfenbein, “is a tax on capital and it slowly eats away at your portfolio. Even a low rate of inflation—say, 3 percent per year—compounds to 50 percent in less than 14 years.” Thus, inflation causes a gradual decrease in your power because a fixed amount of assets buys less. China is now the biggest car market in the world. In 2009 for the  first time auto sales in China surged past the United States. This statistic means more than bragging rights. It indicates the pressures that China and the other growing countries worldwide will put on key resources such as water, food, oil, and steel, and the lists go on. The budget deficit along with escalating demand for resources both from a growing world population and from developing countries will have an impact. That’s why fixed investments such as cash, treasury bonds, and fixed annuities may not keep up in an inflationary environment. It comes down to this: Inflation must be taken into account in financial planning.

 

Are you ready to create a plan for living the life you’ve always dreamed about?  Contact us today to schedule your complimentary discovery meeting. 

Your Guide to Financial Independence

Rick Epple, CFP(r)