Experts have long said that retirees should expect prices to rise by 3% each year. However, the current inflation rate is approaching 7% and could very well rise further. Ana Fajardo, a senior retirement specialist with Wealth Companies, has more than twenty years of experience in her field, and she offers advice that can help retirees manage or even build on their existing retirement funds in the way that best meets their needs.
First, Ana Fajardo notes, that retirees may want to reconsider signing up for Social Security benefits as soon as they become eligible to do so. While it is tempting to tap into this source of income as prices rise, individuals who wait until they turn 70 to start receiving payments receive 32% more money per month than those who signed up for payments at age 66. Unfortunately, experts note that inflation could last for the next few years as supply chain disruption, labor shortages, rising wages, and other factors are not challenges that are easily resolved.
Fajardo also urges retirees to consider investments in line with their long-term financial goals. An annuity can be ideal for those who need to be able to count on steady payments until they pass on. There are fixed, inflation-indexed, and variable annuities, each with its own advantages and disadvantages. On the other hand, those who want more control over their money but want to avoid taking risks with their portfolio should consider treasuries and/or safe stocks and bonds. Treasury bills can be ideal for those who are unable to make long-term investments as bills are told in terms ranging from four weeks to one year.
Investing in real estate should also be seriously considered, Ana Fajardo says, especially if an individual can afford to make a long-term investment. While the market is currently cooling in many parts of the United States, values are set to rise long-term. Demand for housing is outpacing supply and will continue to do so for the foreseeable future thanks to persistent supply chain and labor shortages affecting residential and commercial construction firms. There are a range of investment options in this field, including purchasing property and renting it out, flipping properties, and investing in a real estate investment trust (REIT).
Delaying Social Security payments and making wise investments are the best ways to protect retirement funds from the ravages of inflation. However, Ana Fajardo is quick to point out that a plan that works well for one person may not work for another. An individual’s financial standing, state of health, location, retirement plans, current assets and liabilities, and other factors will have a bearing on which financial plan works best. Working with a wealth management expert is always a wise idea when planning for the future, Fajardo notes, as an investor will assess one’s needs to create a personalized plan that will enable a person to enjoy his or her golden years to the full without worrying about financial problems.