For most retirees, this means choosing to claim Social Security at 70. Doing so entitles you to earn delayed retirement credits that raise the size of your monthly check. A larger benefit also comes with higher cost-of-living increases since your periodic raises are calculated as a percentage of your starting benefit.
- Maintaining the right asset mix
Investing too conservatively can make it much more difficult to ensure investments protect against rising inflation.
Unfortunately, far too many retirees shift too much of their portfolio to bonds and higher inflation reduces the real return bonds provide. If interest rates go up along with inflation, this can also send bond prices tumbling, further diminishing the returns this investment offers.
While retirees need to ensure they aren’t over-invested in stocks, a portfolio that’s too conservative can also be damaging to your financial prospects, especially when inflation is rapidly increasing. You should make sure you’re exposed to an appropriate level of risk by subtracting your age from 110 and investing that percentage of your portfolio in the market.
- Responding to rising prices
Finally, you’ll need to respond to rising prices by adjusting your lifestyle to make sure you aren’t spending your retirement nest egg too quickly. Living on a budget can help.