Could Inflation Delay Your Retirement?

Could Inflation Delay Your Retirement?

Life is about change. Whether on a personal level or due to external factors, we are consistently subject to change. The past few years have been particularly notable in their ever-changing nature. This week's newsletter features resources to help you navigate and take advantage of the change that is out of your control.

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How Businesses Can Prepare for a Recession

By Zoe Certified Advisor:? Thomas (Tom) Kotick, CPA, CFP?

As a business owner, you likely tend to your business the way you would a fiddle-leaf fig. You may dedicate ample time, attention, and resources to your effort as it is among your most important financial assets. With due reason, starting a business is the way many Americans create meaningful personal wealth.

Here are five steps a business owner can take to prepare for and survive a recession:

  1. Plant the Seed: Create a Personal Financial Plan
  2. Hydrate Your Plan: Prepare Your Balance Sheet?
  3. Don’t Leave It In the Shade: Arrange Access to Capital?
  4. Check the Soil: Focus on the Business?Foundations
  5. Prioritize Fertilizers: Take Advantage of Financial Opportunities

Predicting a recession is mostly an unrewarding exercise. Preparing your business to succeed during those tough times is a whole other story.?

Read: Preparing Your Business For A Tough Economy

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Take Advantage of the Housing Price Drop

By Zoe Certified Advisor:? Daniel Messeca, CFP?

For much of the past twelve months, the combination of rock bottom rates and low inventory led to stiff competition for homes.

Despite several interest rate hikes, housing prices have largely continued their upward trajectory. Now, interest rates are at their highest point since the Great Recession.?

While there are external changes you can’t control, there are times when it makes sense to take change into your own hands!?If you are in the market for a new home, now could be a good time to evaluate the evolving housing climate.

Let’s take a moment to explore several factors that will impact your decision.

Read: How Should You Respond & Take Advantage of The Housing Price Drop?

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Is Inflation Delaying Your Retirement?

By Zoe Certified Advisor:? Henry Hoang, CFP?

Inflation has become a serious concern worldwide, as many feel diminished purchasing power and skyrocketing costs of day-to-day necessities. The resulting uncertainty is an?enemy for investments and retirement. Thus, it is unsurprising that many of those retiring soon are worried about delaying their retirement due to inflation.

3 Tips to Ensure You Can Retire on Time Without Running Out of Money

The Secret Ingredient: Preparation?

Whether retiring now or in the near future, are you prepared? There are various approaches to determining if you are prepared for retirement. Some may use a rule of thumb of a 3% to 4% withdrawal rate from their investment portfolio.

Create your Income Plan in Advance

Going into retirement blindly without a prepared income plan is a recipe for disaster. You must know which accounts you plan to draw money from each year. If you have multiple IRA or 401k accounts laying around, consolidating your accounts may help you organize and simplify your retirement planning.

Manage Sequence of Returns Risk

One of the greatest risks to your retirement portfolio is being unprepared for a bear market in your early retirement years. A sequence of risks on returns for your retirement nest egg is retiring into a down market where you withdraw money from a depreciating portfolio.

Read: No Crystal Ball, No Retirement Problems

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Could Inflation Lead To A Recession?

By the Zoe Financial Team

Whether your grocery store of choice is Wholefoods or Erewhon, perhaps you’ve noticed an uptick in prices. This year,?inflation hit the highest rate (8.6%) since 1981. Without the need for an economics course, you know there is a tight relationship between inflation/deflation and the likelihood of a recession.?Why? Because price variations affect demand, leading to imbalances in goods, which results in a slowing of economic activity.?

Naturally, with rising energy, housing, and food costs, there’s ample speculation around inflationary pressure and its repercussions. Of course, this raises concerns about how this will affect you and your wealth.?Here are a couple of questions we can help you answer:

  • What Is Inflation (and Deflation)?
  • How Are Prices of Consumer Goods and Services Evaluated?
  • What is a Recession?
  • What Is The Economic Outlook Telling Us Now?

If you’re worried about how this economic context may impact your wallet, the best thing to do is not panic!?

Read: How To Act Upon These Economic Pressures

??Ask Andres, Zoe's Founder & CEO

I am planning to retire in 5 years. Should I now be concerned about my retirement?

Andres: “1/4 of Americans are delaying their retirement due to inflation. This topic of inflation can be deceiving in the sense that, depending on where you get your news, you might be thinking: ‘there is no way to bring this down,’ others are saying ‘hey we do have some control through interest rates,’ and some say ‘this is going to pass quickly.’ It is important to realize which areas of inflation are transitory and which ones are not.”?Listen to the full conversation.

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