Inflation was probably part of your retirement planning strategy. But you may not be ready for the level you’ve reached in recent years.
Thankfully, inflation appears to be on the decline. According to the U.S. Bureau of Labor Statistics, the inflation rate in September 2024 will be 2.4%, much different from the peak of 9.1% in June 2022.
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Nevertheless, you may still be recovering from rising costs and may need to tap into your savings to cover your expenses. Speaking of savings, interest income may not be as high as it once was due to the recent Fed rate cuts.
With this in mind, it might be time to find some new ways to manage your retirement nest egg. Keep reading for five ideas to help you preserve your money amidst inflation and plummeting interest rates.
Current trends:
It may sound obvious, but it’s easier said than done. Take a look at your spending habits and find relatively easy ways to spend less.
For example, if you eat out regularly, try to eat one or two extra meals a week. You can also check your credit card statement to see if you’re paying for subscription services you no longer use.
It may not seem like much, but just cutting small expenses here and there can add up. Even if you’re not trying to combat rising costs of living, it’s always a good idea to audit your spending regularly.
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If you can avoid it, now might not be the best time to make a big purchase. If you’re planning on buying a vacation home, boat, RV, or other big-ticket item, consider waiting a little.
Even if you can buy one, it might be better to wait until the economy recovers a bit more. You don’t want to spend the money, but an unexpected recession hits and you end up wishing you had left the money in your account.
If you haven’t diversified your portfolio lately, it might be time to do so. This allows you to ensure that your investment strategy reflects both your current financial situation and your retirement goals.
According to the Teachers Insurance and Annuity Association of America (TIAA), different investment types typically perform differently at the same time. Therefore, it is important to ensure that your portfolio allocation continues to work.
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According to TIAA, too many risky investments or too few conservative investments can have a negative impact on your nest egg. Therefore, it is a good idea to consult a financial advisor to ensure that your portfolio is appropriately balanced.
Whether you want to supplement your pocket money or rebuild your savings, a side hustle is an easy way to make some extra cash. Instead of coming out of retirement completely, you can choose a job that looks interesting and use your time to do it.
For example, pet sitters earn an average of $25 for a 30-minute visit, according to pet services software company Scout. Another idea: According to ZipRecruiter, tax preparers make an average of $18 an hour.
The great thing about side hustles is that there’s something for everyone. You can use the skills you’ve gained over decades of work, or you can choose a job that matches your passion or seems easy. Do whatever job suits you.
If you aren’t currently clipping out shopping sale coupons or looking for senior discounts, whether paper or digital, now is the time to do so. This is a quick and easy way to keep your hard earned money.
Even if inflation hits rock bottom and savings rates skyrocket, it’s wise to look for ways to save. There’s no need to pay full price if you can get the same thing at a discount.
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This article originally appeared on GOBankingRates.com: 5 Ways to Deal with Soaring Inflation and Plummeting Retirement Savings Rates
