YOUR MONEY MINUTE — We all feel it— the rising prices at the grocery store, the gas pump, even your morning coffee run. But one of the most overlooked ways inflation shows up is how it can quietly chip away at your retirement.
Think of inflation like a slow leak in your financial future. Even at a modest 3% annual inflation rate, the cost of living could double in about 24 years. That means if you retire at 65, by the time you're in your late 80s, the same lifestyle could cost twice as much. And that's a big problem when you're relying on a fixed income.
Then there's healthcare— one of the biggest expenses in retirement— and it's rising even faster than everything else. So, how do you keep from falling behind?
Here are two steps to help you stay ahead:
1. Keep your investments working for you.
As retirement approaches, a lot of people get overly cautious with their money. And while it's wise to reduce risk, being too conservative can hurt you int he long run. Your money still need to grow— even in retirement— just to keep up with inflation.
2. Take advantage of an HSA if you have one.
Health Savings Accounts are on of the most powerful, tax-advantaged tools out there. You can invest the money, let it grow tax-free, and then use it later for qualified medical expenses— without paying taxes on withdrawals. It's a triple win.
Inflation isn't just a headline. It;s real. It's personal. But with the right strategies, you can protect your future and keep building the retirement you've worked so hard for.
For more ways to protect your retirement and make smart money moves, catch the Your Money Minute segments every week on WMAR.
