Retirement Planning Takes The Back Burner Amid Rising Inflation Concerns, According to Danielle Browne

Even though the rate of inflation has moderated since its peak in mid-2022, a staggering 84% of respondents expressed concerns about the surge in inflation and its implications for their future income and savings. The survey, which exclusively targeted individuals with at least $100,000 in investable assets, reveals that many are grappling with the fear that they won’t be able to extend their careers long enough to offset the financial blow dealt by inflation.

To shed light on this issue from a legal perspective, Danielle Browne, estate planning attorney and owner of The Browne Firm, a multi-practice law firm in New York, commented, “The significant spike in inflation has left individuals facing challenging financial decisions. Many are turning to us for guidance on how to protect their estates and retirement plans in these uncertain times.”

The survey highlights that while inflation is perceived as the most significant investment risk, 77% of Americans are also concerned about the high levels of government debt potentially leading to cuts in Social Security benefits. Nearly half of the respondents identified benefit reductions as their primary retirement worry, with slightly over half expressing concerns about the financial challenges such cuts might pose.

Saving more to combat inflation appears to be a challenging option for many, as approximately two-thirds of those surveyed indicated that higher prices have made it “significantly” harder to save for retirement.

A majority of workers foresee the need to extend their working years beyond their initial plans, with 38% fearing they won’t be able to do so as long as they had hoped. On average, retired workers in the survey revealed they had left the workforce four years earlier than initially intended, retiring at the age of 61.

Current projections indicate that over 40% of Americans expect to lead frugal lives in retirement, while approximately 30% anticipate turning to friends and family to make ends meet. Additionally, about a third of respondents believe they may need to relocate to areas with a lower cost of living to sustain their retirement lifestyles.

In light of these challenges, The Browne Firm shares these five tips for inflation-proofing your estate and retirement plans.

The Browne Firm’s 5 Tips to Inflation-Proof Your Retirement Plans

1. Diversify Your Investments

Consider a diversified portfolio that includes assets less vulnerable to inflation, such as real estate or inflation-protected securities. Diversification is your shield against inflation’s erosive effects on your wealth. Real estate investments can provide a hedge because property values often rise with inflation.

Additionally, inflation-protected securities, like Treasury Inflation-Protected Securities (TIPS), are specifically designed to keep pace with inflation. These securities ensure that the purchasing power of your investments remains intact, making them a valuable addition to your portfolio.

2. Reevaluate Your Retirement Timeline

Be flexible with your retirement age and savings goals to adapt to changing economic conditions. In an inflation-prone environment, your retirement timeline may need adjustment.

Delaying retirement by a few years can give your savings more time to grow and provide a more substantial buffer against rising living costs. It’s essential to periodically reassess your retirement goals and make necessary changes to align with your financial situation and economic circumstances.

3. Consult a Legal Professional

Seek advice from professionals like Danielle Browne to create or update your estate plan to account for inflation-related challenges. An experienced legal professional can help you navigate the complexities of estate planning in an inflationary environment.

They can assist in creating a robust estate plan that considers factors like estate taxes, asset protection, and wealth preservation. Such a plan can ensure that your assets are distributed according to your wishes while minimizing the impact of inflation on their value.

4. Budget Wisely

Develop a sustainable budget that accounts for potential increases in living expenses due to inflation. Inflation can erode the purchasing power of your income, making it crucial to budget wisely. Start by tracking your expenses and identifying areas where you can cut back or optimize spending.

Consider creating an emergency fund to cover unexpected costs that may arise due to inflation. A well-thought-out budget can help you maintain financial stability in times of economic uncertainty.

5. Stay Informed

Stay up-to-date with economic trends and seek expert guidance to make informed financial decisions. Inflation rates and economic conditions can fluctuate, so staying informed is essential. Follow financial news, read reports from trusted sources, and consider seeking advice from financial advisors who can provide insights tailored to your specific situation.

Being well-informed empowers you to make informed investment choices, adjust your financial strategies, and protect your assets from the impacts of inflation.

These findings, released as part of Natixis’s 2023 Global Retirement Index, offer valuable insights into the evolving landscape of retirement planning in the face of inflation and economic challenges.

For more information about wealth management amidst economic uncertainty or to schedule a consultation with The Browne Firm in New York, visit their website at https://www.thebrownefirm.com/.