Inflation has been called the silent killer of wealth. It’s rarely discussed and many retirement income strategies ignore it completely. But over time, the steady increase in the cost of living can have a profound negative effect on your standard of living in retirement.
How inflation destroys wealth
As this chart shows, even at a modest rate of inflation, your spending power could decline by nearly 40% over the next 20 years.No one knows what the future may hold for inflation, but we do know that the Federal Reserve aims to keep the rate between 1% and 3% per year, and it has reached double digits in the 1950s, 1970s and 1980s.
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