If you save and invest for decades, you’d like to know you can retire without financial worries. Nonetheless, you still have to be aware of some threats to a comfortable retirement — and how to respond to them.
These threats include:
• Inflation – Inflation has been high recently, but even a mild inflation rate can seriously erode your purchasing power. In fact, with just a 3% inflation rate, your expenses could double in about 25 years — and your retirement could easily last that long. So, if you’re going to rely on your investment portfolio for a sizable part of your retirement income, you will need to own a reasonable number of growth-oriented investments, such as stocks or stock-based funds, whose potential returns can equal or exceed the inflation rate.
