3 ways retirees can manage inflation

Adjusting your retirement plan

Many financial advisors account for inflation when putting together retirement plans.

Including inflation in your retirement plan is a surefire way to make sure you are comfortable even as rates increase. Kiplinger recommends making adjustments in your plan for inflation spikes that will impact your short-term budget.

When making your plan, assume a long-term inflation rate. Spikes in inflation may be hard to predict, but they are usually are short-term. Long-term inflation rates tend to stay around 2%.

There are a few things you can do to manage your expenses during inflation spikes. You could defer payments that are affected by price hikes and use liquid savings rather than retirement to cover payments that you cannot defer. If you expect the hikes to continue, you can make adjustment to your financial plan.

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Social Security

Social security payments are adjusted annually with inflation. There is a huge financial incentive to wait until 70 to begin receiving payments. At that age, you can make the most out of your benefits. The longer you wait, the more your Social Security payment will be.

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