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How do we protect our retirement from inflation?
Posted on 8/29/19 at 10:34 pm
Posted on 8/29/19 at 10:34 pm
My wife and I have been disciplined with maxing our 401ks and doing Backdoor Roth IRAs. Is there some sort of bond or anything that would protect against inflation? Real estate maybe? I’m nervous about the country’s growing debt.
Thanks in advance!
Thanks in advance!
This post was edited on 8/29/19 at 10:36 pm
8
Posted on 8/29/19 at 11:22 pm to AndyJ
quote:Well treasury inflated protected securities (TIPS) are specifically designed for inflation protection and are indexed to inflation.
My wife and I have been disciplined with maxing our 401ks and doing Backdoor Roth IRAs. Is there some sort of bond or anything that would protect against inflation? Real estate maybe? I’m nervous about the country’s growing debt.
Thanks in advance!
But at least at my age (33) and for my goals (retire decades from now with as much as possible), unless inflation somehow becomes the best return, then it seems that investments that maximize the return (usually stocks) are going to end up protecting against inflation anyways.
TIPS
This post was edited on 8/29/19 at 11:25 pm
Posted on 8/29/19 at 11:31 pm to AndyJ
How old are you? And whe do you plan to retire?
Posted on 8/30/19 at 5:54 am to AndyJ
Historically, the best protection against inflation has been common stocks.
Posted on 8/30/19 at 6:07 am to AndyJ
Equities are the best hedge to inflation. However, if you want a cash equivalent then TIPS.
Posted on 8/30/19 at 6:34 am to castorinho
I’m 40 and I’d like to retire at 60 (probably still do some part time work). Thanks for the input, y’all.
I think I’m 85/15 or so stocks/bonds. I have always heard you start to equalize that ratio as retirement looms, but I guess that would be bad in the setting of high inflation (if I am properly extrapolating what posters are telling me).
I think I’m 85/15 or so stocks/bonds. I have always heard you start to equalize that ratio as retirement looms, but I guess that would be bad in the setting of high inflation (if I am properly extrapolating what posters are telling me).
Posted on 8/30/19 at 7:10 am to AndyJ
quote:
I think I’m 85/15 or so stocks/bonds. I have always heard you start to equalize that ratio as retirement looms, but I guess that would be bad in the setting of high inflation (if I am properly extrapolating what posters are telling me).
Bonds are no longer the safe haven they used to be in the past. The classic 60/40 or 50/50 retirement is in question now.
Posted on 8/30/19 at 7:40 am to AndyJ
Another use that a decentralized cryptocurrency could fill.
Posted on 8/30/19 at 7:57 am to Douglas Quaid
quote:
Another use that a decentralized cryptocurrency could fill.
We are still a long ways away from this. Market manipulation is rampant right now in the sector.
Posted on 8/30/19 at 8:41 am to Shepherd88
quote:
Historically, the best protection against inflation has been common stocks.
especially those that pay dividends, Coca-Cola dividend is more reliable than a AAA bond
Posted on 8/30/19 at 9:01 am to OleWarSkuleAlum
(no message)
This post was edited on 12/21/21 at 1:16 pm
Posted on 8/30/19 at 9:44 am to AndyJ
Inflation isn't as big a deal as you think.
Let's say you own stock in Coca Cola.
Inflation goes up 10%, well they will raise their price 10% and your stock really has the same value in spending terms.
Now if your money is in the bank....that is when you should be worried.
Me personally, I am heavily invested in real estate as well as income producing businesses.
Let's say you own stock in Coca Cola.
Inflation goes up 10%, well they will raise their price 10% and your stock really has the same value in spending terms.
Now if your money is in the bank....that is when you should be worried.
Me personally, I am heavily invested in real estate as well as income producing businesses.
Posted on 8/30/19 at 10:28 am to AndyJ
Life insurance.
Rental real estate.
Debt elimination.
Rental real estate.
Debt elimination.
Posted on 8/30/19 at 12:36 pm to BestBanker
how much whole life insurance should he buy at 40 and which insurance company do you work for?
Posted on 8/30/19 at 1:31 pm to yatesdog38
quote:
how much whole life insurance should he buy at 40 and which insurance company do you work for?
Almost never should buy whole life. Only term.
Posted on 8/30/19 at 1:39 pm to OleWarSkuleAlum
I was calling out BestBanker's above post.
whole life should be against the law or they should make another licensing requirement.
whole life should be against the law or they should make another licensing requirement.
Posted on 8/30/19 at 1:47 pm to yatesdog38
quote:
how much whole life insurance should he buy at 40 and which insurance company do you work for?
You seem to know the answer, since you made a wondrous assumption. I don't work for an insurance company. Want to go for 3?
Posted on 8/30/19 at 1:49 pm to OleWarSkuleAlum
quote:
Almost never should buy whole life. Only term
Almost? What's that reason?
Posted on 8/30/19 at 1:50 pm to yatesdog38
quote:
whole life should be against the law
I bet your fun at parties!
Posted on 8/30/19 at 6:47 pm to AndyJ
Stay in equities, in a mix or index that is also consistent with your risk tolerance. Equities generally outperform all other investments and inflation over time. The only real risk with equities is a negative timing of your needing the money (retirement) with a particular downturn (bear market).
Blue chip dividend stocks with a rate of 3 to 4 percent can be a nice addition, especially if you are converting from a growth posture to an income posture.
Real estate would be a good hedge, but it also going to be associated with debt - leverage is really the only way to get a real return in real estate.
Blue chip dividend stocks with a rate of 3 to 4 percent can be a nice addition, especially if you are converting from a growth posture to an income posture.
Real estate would be a good hedge, but it also going to be associated with debt - leverage is really the only way to get a real return in real estate.
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