Inflation Finds its Way to Your Wallet Lake Point Advisory Group

There’s no doubt that people have been feeling the effects of inflation on their wallets. Everything from food to gas to home repair products seems to be increasing every day. Federal Reserve Chairman, Jerome Powell, is taking inflation very seriously, raising interest rates to combat the explosion of inflation. And although the moves have made an impact, the Federal Reserve noted that inflation is stickier than it had predicted.[1]

This is all to say that inflation may be here to stay. You might be thinking, “What can I do to mitigate the effects of inflation on my wallet?” While inflation is nearly impossible to avoid, there might be ways to minimize its effects.

What Items has Inflation Hit the Hardest?

As you may know, inflation has impacted oil and gas prices, food, rent, and travel the most. To put that in perspective, meats, poultry, fish, and eggs, saw a 14.2% increase year over year, and gas saw a 30.2% increase year over year, compounded by the Russian-Ukrainian conflict. In addition, airline fares increased 37.8% due to supply chain shortages and COVID-19 travel bans.[2] And now, inflation in rent prices is showing that people are looking for homes, pushing rents and real estate prices even higher.

These numbers may not have a great shock value now, but when your budget is covering less and less of your costs of living, the effects of inflation become all too real. Although you can’t run from inflation, isolating segments of your budget and spending less on these categories can surely mitigate the costs you face. However, it’s important to understand how your income sources in retirement may be affected by inflation as well.

Inflation Hits Retirees’ Wallets and Income Streams

For working people, inflation is a question of adjusting their budget to accommodate price increases and finding income, wages, or raises in the future that match inflation. Savings don’t usually have to be withdrawn and can be invested to potentially avoid the effects of inflation. But for retirees, your savings become your income, subjecting them to the rising costs of living. This means that not only is your budget tighter now, but your income for the future may not have accounted for the rising costs of living. Couple that with a bear market, and your retirement accounts could take a large hit, further compounding the problem.

Inflationary periods are difficult for retirees to get through, but it’s not impossible. There are financial tools and investment strategies out there that can protect against inflation or other risks you may be worried about. Talking to a financial professional is your first step toward protecting your retirement.

In calm markets, it can feel easy to see your retirement accounts meet your goals. But when the water gets choppy, it’s important to have a team of experts supporting you and your retirement to help you get through unexpected economic environments. If you’re thinking about retirement or have retired, Click HERE to sign up for a time to speak to us at LakePoint Advisory Group about your financial goals.

[1] https://www.nytimes.com/2022/07/06/business/fed-minutes-inflation-interest-rates.html
[2] https://www.forbes.com/advisor/personal-finance/inflation-40-year-high/


Lake Point Advisory Group is a tradename. All services provided by Lake Point Advisory Group investment professionals are provided in their individual capacities as investment adviser representatives of Mercer Global Advisors Inc. (“Mercer Advisors”), an SEC-registered investment adviser principally located in Denver, Colorado, with various branch offices throughout the United States doing business under different tradenames ,including Lake Point Advisory Group.

This material is provided for informational purposes and is not an offer to sell or a solicitation of an offer to buy an interest in any security or to engage in any investment strategy. Such an offer may only be made at the time a qualified offeree receives a confidential private offering memorandum or other appropriate disclosure. This report is intended as a summary; it does not purport to be complete. Information contained herein is believed to be accurate and/or derived from sources which we believe to be reliable; however we do not warrant the completeness or accuracy of such information. Opinions expressed herein do not necessarily reflect those of Lake Point or Mercer Advisors. You should not construe this presentation or any other communication received in connection with Lake Point as legal, accounting, tax, investment, or other advice. You should consult with your own counsel and advisors regarding such matters. Past performance is not necessarily indicative of future results. No representation is made that any investment will or is likely to achieve the same or similar results in the future. Investments cannot be made in an index. Alternative investments are subject to greater risks than those associated with traditional investments and are not suitable for all investors.