he biggest problem facing Here's the problem: when you
you when you plan your are talking about retirement, you
retirement fund or start are looking ahead a long time.
taking the money is inflation. Even if you are 50, it will be 15
You may have fallen for years before you retire, and by
government statistics that show that time almost everything you
inflation is low. Don't believe buy could cost twice as much as
it! The official figures now. You are probably expecting
understate inflation, probably by to live to 80 or more, and that
70-100%. In other words, if they is 30 or more years on from now
say inflation is 3%it is probably if you are 50. Think back to what
5%. Over 15-25 years, inflation things cost 30 years ago and you
at even 3% will have a serious will get a shock.
effect on your savings. So if you are saving for
What's worse is that a lot of the retirement, try to save double
things that put fun into your whatever seems a reasonable
life keep going up more than amount at today's prices. One way
inflation basically, anything to do this is to use a retirement
that involves labor, from calculator.
hairdressing, restaurants to golf But what should you do when
clubs. Also, we can expect the you retire? The normal thing is
price of gasoline to double over to buy an annuity which will pay
the next five years and it will you a guaranteed sum for the rest
go even higher than that in 10-20 of your life. This will be a
years time. This is not dependent constant amount each month, but
on inflation but on the falling your spending power will decline
reserves of oil under the ground. each year.
What oil is there is less Don't put all your money into
accessible, so it costs more to one annuity
bring to market.
