As a retiree, how can I maintain my income without losing purchasing power?
This is a dilemma confronting many retirees. Do you realize that, considering today's increasing life spans, you can spend more time being retired than you spent working? If we look at the Ibbotson chart and we see the different performance of stocks, bonds, and Treasury bills over 50 years, we realize that retirees who put their savings in bonds will lose a lot of their purchasing power and will not be able to keep up with inflation. So you need to anticipate not only income needs but also growth needs. That way, your portfolio will grow faster than the rate of inflation, and you will be able to maintain your purchasing power during retirement without being in danger of outliving your savings.
This is a dilemma confronting many retirees. Do you realize that, considering today's increasing life spans, you can spend more time being retired than you spent working? If we look at the Ibbotson chart and we see the different performance of stocks, bonds, and Treasury bills over 50 years, we realize that retirees who put their savings in bonds will lose a lot of their purchasing power and will not be able to keep up with inflation. So you need to anticipate not only income needs but also growth needs. That way, your portfolio will grow faster than the rate of inflation, and you will be able to maintain your purchasing power during retirement without being in danger of outliving your savings.
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