{"id":11696,"date":"2022-05-19T09:41:00","date_gmt":"2022-05-19T09:41:00","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=11696"},"modified":"2022-05-18T14:42:15","modified_gmt":"2022-05-18T14:42:15","slug":"retirees-concerned-about-inflations-impact-on-portfolio","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/retirees-concerned-about-inflations-impact-on-portfolio\/","title":{"rendered":"Retirees Concerned About Inflation&#8217;s Impact on Portfolio"},"content":{"rendered":"\n<p><em>Lindsay T. from Farmington, NM asks: <\/em>Hello Mitch, I\u2019m sure you hear from a lot of people about inflation concerns. I\u2019m retired and have my nest egg and social security to live off of, so if prices for food and gas and other goods keep going up, I\u2019m worried I could be in real trouble. Do you think this problem will get better soon?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing and I empathize with your concerns. You\u2019re not alone in being worried \u2013 a recent poll I saw found that 9 in 10 Americans are concerned about inflation, and 6 in 10 are \u201cvery concerned.\u201d At the end of last year, less than 50% of Americans were worried.<sup>1<\/sup><\/p>\n\n\n\n<p>The inflation problem persisted in April \u2013 the consumer price index registered at 8.3%, which marked a decline from the 8.5% print in May but still reflects inflation that\u2019s running too hot. To be fair, high inflation readings are being pulled up by outliers like-new car prices and airfares that are rising quickly, but consumers are still feeling it in everyday life, particularly with higher gas prices.<sup>2<\/sup><\/p>\n\n\n\n<p>I feel confident that the inflation rate will come down in the second half of the year, perhaps even by half. My look at inflation-linked bonds and derivatives shows that the market is predicting about 3.5% inflation by 2024, and the 10-year U.S. Treasury \u2013 which is generally a good proxy for the market\u2019s expectations for inflation \u2013 is still hovering around 3%.<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong><u><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_05_19_2022&amp;content=inflation_guide\">Here Are 4 Ways to Protect Your Retirement from Rising Inflation<\/a><\/sup><\/u><\/strong><\/p>\n\n\n\n<p>Are you feeling worried about high inflation and its impact on your investments and retirement?<\/p>\n\n\n\n<p>It\u2019s no secret that inflation is rising, and one group that it\u2019s affecting heavily is retirees. Rising inflation can be very costly for the economy, but what can investors, especially those nearing retirement, do to keep their investments afloat?<\/p>\n\n\n\n<p>Instead of panicking, take a look at steps that could help reduce the sting of inflation. To help, we\u2019re offering our exclusive guide, <strong><em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_05_19_2022&amp;content=inflation_guide\">4 Ways to Protect Your Retirement from Rising Inflation<sup>3<\/sup><\/a><\/em><\/strong><em>. <\/em>You will get insight on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Asset allocations that outperform inflation<\/li><li>Spending categories where prices are rising the most<\/li><li>Getting the most from Social Security benefits<\/li><li><strong><em>Plus, many more ideas to protect yourself and your assets against inflation<\/em><\/strong><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today!<\/p>\n\n\n\n<p>The rationale behind inflation improving is that the supply disruptions that caused inflation in the first place appear to be getting better. The long lines of container ships awaiting entry to California\u2019s ports have dwindled, and freight rates have declined substantially. Factories in Asia are also operating at a higher capacity than they were six months ago, which should help.<\/p>\n\n\n\n<p>The one wildcard for 2022 inflation is China, in my view. There is a good deal of uncertainty over how far China will go in pursuing its zero-Covid policy. China is responsible for nearly one-third of global manufacturing output, and recent lockdowns in manufacturing hubs like Jilin province and major cities like Shenzhen and Shanghai have shuttered factories and stores and resulted in a drastic decline in exports. China\u2019s exports rose 3.9% in April year-over-year, a sharp fall from the 14.7% growth rate posted a month earlier.<\/p>\n\n\n\n<p>At the same time, about 75% of China\u2019s largest 100 cities by GDP have loosened or removed restrictions, so there has been a neutralizing effect. If China can resume operating at full capacity sooner than later, the supply chain problem should not contribute much more to inflation \u2013 a good thing.<\/p>\n\n\n\n<p>The final factor that may help inflation later in this year and 2023 is the U.S. consumer shifting spending from goods to services. There was too much demand for goods that were in short supply, and it drove up prices. Spending more on services should allow the economy time to replenish inventories and resolve supply chain issues. In short, hang in there and perhaps consider altering your spending habits in the near term. I think the inflation issue will get better in the next year.<\/p>\n\n\n\n<p>Overall, if you\u2019re worried about the impact of inflation on your portfolio, remember to not panic! Inflation may be rising, but there are steps you can take to prevent it from affecting your long-term investments!<\/p>\n\n\n\n<p>Even during difficult times when emotions are running high, we recommend taking a look at steps that could help reduce the sting of inflation. To help, we\u2019re offering our exclusive guide, <strong><em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_05_19_2022&amp;content=inflation_guide\">4 Ways to Protect Your Retirement from Rising Inflation<sup>4<\/sup><\/a><\/em><\/strong><em>. <\/em>You will get insight on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Asset allocations that outperform inflation<\/li><li>Spending categories where prices are rising the most<\/li><li>Getting the most from Social Security benefits<\/li><li><strong><em>Plus, many more ideas to protect yourself and your assets against inflation<\/em><\/strong><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mitch offers advice\u2014and some reassurance\u2014to those who are worried that inflation&#8217;s impact on retirement savings.  <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-11696","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=11696"}],"version-history":[{"count":4,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11696\/revisions"}],"predecessor-version":[{"id":11700,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11696\/revisions\/11700"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=11696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=11696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=11696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}