In 2021, inflation increased by 7%—its highest point since 1982 (Bureau of Labor Statistics). So $1 at the beginning of last year was worth around $0.93 at the end.
While inflation is an important consideration, it’s just one of several risks you need to manage in retirement. Protecting yourself in retirement consists of:
- Creating an income plan that factors in inflation over the course of many years.
- Adjusting for inflation spikes that may affect your short-term budget.
While it’s not time to panic, you shouldn’t ignore it, either.
Here are a few steps to consider to help protect your savings.
Save where you can. Even modest steps can add up. Being flexible about your travel or where you live can also help.
Continue investing. Consider keeping some of your savings in stocks for long-term growth.
Pay off debt. Eliminating debt should be a top priority in retirement.
Consider working. Every dollar you earn in retirement is a dollar you don’t have to withdraw. Go part-time or explore a second career as a buffer. It may be an interesting opportunity you hadn’t considered.
If this has you feeling a bit anxious, keep this in mind: Having WRS as a public school employee is a great advantage for you, along with Social Security’s built-in cost of living increases and your personal retirement savings.
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