Inflation-Proofing Your Retirement Fund
Introduction
One of the biggest concerns for many retirees is the erosion of their retirement savings due to inflation. Inflation refers to the sustained increase in the general price level of goods and services over time. As prices rise, the purchasing power of your retirement fund decreases, leaving you with less money to cover your expenses.
Understanding Inflation
Before we delve into strategies for inflation-proofing your retirement fund, it’s important to understand how inflation works. Inflation is influenced by several factors, including government policies, economic growth, and consumer spending habits. When the economy is growing, demand for goods and services increases, leading to higher prices. This results in a decrease in the value of your money over time.