What Does Inflation Mean for Your Retirement Plan?
Americans got some welcome news last week that inflation slowed in July, but the growth in consumer prices was still nearly triple the historical average. Inflation plays a major role in retirement planning, and we're not out of the woods quite yet. Luckily, an informed approach can calm some investors' fears and provide a roadmap for navigating a challenging economic environment.
Wall Street cheered news that July's Consumer Price Index report indicated that inflation was lower than expected and slowing down. That's obviously good news for many consumers -- especially retirees on fixed budgets -- but it's just as important for investors. There's hope that the economy is normalizing, which means that the Fed's aggressive rate hikes are working. Importantly, it means that the Fed might not have to continue extreme monetary tightening, which reduces the likelihood of a recession.
Before we all take a victory lap, it's important to recognize that July's inflation figure was still 8.5%, with food costs up nearly 11%. Even if there's progress and a light at the end of the tunnel, this issue isn't going away overnight. Now's not the time to drop the ball in retirement planning.
Source Fool.com
