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Protecting retirement income from inflation 2010-05-17 Even the most well-planned savings techniques can fall victim to inflation. Whether seniors have income invested in the stock market or earning interest in a savings account, negative market conditions, like inflation, may reduce the purchasing power of their hard-earned money, according to Market Watch. Seniors who choose to build retirement savings through investments should consider purchasing Treasury Inflation Protected Securities, which are government-backed bonds linked to inflation levels. In some cases, seniors may benefit from higher prices, according to Hobart Financial Group chief executive Chris Hobart. Retirees who purchase shares in companies that profit from higher prices, - such as oil and gas businesses, - may benefit, Hobart tells Market Watch. Seniors who don't actively participate in the market may also take advantage of inflation by remortgaging their homes, advises Boston University professor Laurence Kotlikoff. "It's generally a good idea to pay down a mortgage as soon as possible," Kotlikoff told Market Watch. "But a long-term mortgage can be a good hedge against inflation because the real value of repayments will decline," he said. The market decline following the subprime mortgage crisis endangered the retirement of millions. Instituting a few protective measures may help prevent another financial disaster in the future.  |
