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Article | 20 January 2022 | Retirement
Inflation – A real-world lesson in purchasing power
Economic recovery has brought the first real inflation in 13 years. Economists may see it as transitory, but investors have been reminded that the past decade could look more like the exception than the rule.
The concern about inflation has been front and center in the recovery, as growth runs into supply chain disruptions, shortages, and consumers coming back to the mall with cash in hand. Investors should understand just how even a small increase in inflation can affect their purchasing power over time.
Low rates – Boon to customer; Bust for retirees
Interest rates have been low since 2009. But they went even lower during the pandemic as policy makers moved to shore up local economies. Low rates may have been good for growth and good for consumers, but the environment has made it difficult for retirees who need to generate income.
Public debt – Will retirees have to foot the bill?
Massive stimulus spending was a critical policy tool that helped keep the public health crisis from becoming a global economic crisis. But record spending in 2020 and 2021 is the topper on debt pressures that have been building for decades. Investors are worried about what it means for their public retirement benefits.
A world of worry – Into the great unknown of retirement
Beyond the economic pressures, individuals share a broad range of worries about retirement. From employment to health to income inequality, they have a lot on their minds.
Many times retirement is not a choice. Unforeseen events like a late career layoff, health problems, or family care needs can take people out of the workforce and disrupt their retirement plans.
Healthcare is a particular concern. Seven in ten say they are worried that the costs of healthcare and long-term care will severely impact their financial security in retirement.
Income inequality is another issue on their minds, because if you earn less while working, you'll have less to save — and less to draw from in retirement. The good news is that the dialogue around it seems to be getting through to the public.
Global retirement security is a worthy goal. If stakeholders live up to their roles and responsibilities, it can be within reach. To get the full details on where your country ranks — and learn more about the key concerns around global retirement security — download the full report.
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