Between September 2018 and September 2019, the U.S. inflation rate averaged around 1.7%.
The Federal Reserve plans to keep the rate at around 2% for the foreseeable future, helping to maintain a market that is favorable to investors seeking to safeguard their investments’ value.
However, investors are also conscious that merely stowing away savings could result in returns that don’t actually keep up with inflation.
In order to maintain – or gain – purchasing power, here are four simple steps that investors can take to help their investments maintain their value.
1. Make the most of the match.
Many employers offer a workplace retirement plan in which they offer to match a certain percentage of the employee’s salary – commonly 6% – each year.
By taking full advantage of this plan, you can see an immediate 100% return on your investment. This kind of growth is incredibly helpful in protecting your retirement savings from inflation.
2. Contribute everything you can to your retirement accounts.
It goes without saying that investing as much as you can, when you can, is the key to ensuring that your retirement savings continue to grow.
Whether you contribute to a work-based retirement plan or an individual retirement account, contributing the maximum amount annually can help mitigate the impact of inflation on your savings later on.
3. Seek out alternative investments.
Instead of only seeking out only investments in stocks, consider investing in alternatives that help hedge against inflation, like real estate or gold.
Most self-directed IRAs and some company 401(k) plans allow investors to pursue these diverse options.
4. Invest in Treasury bonds.
Another alternative investment that can help protect your savings is Treasury Inflation-Protected Security, or TIPS. If inflation increases while you have invested in Treasury bonds, you can expect to receive a larger amount of interest than you might otherwise.
Are your retirement savings shielded in a way that can block a hit taken from any direction?
If you want to learn how you can grow your portfolio and protect your retirement, call this number: (888) 394-6116.
This article does not contain investment, tax, or financial advice. Please consult with a licensed professional for advice concerning your specific situation.