A local financial adviser talks about the impact of inflation on pension plans
HARRISONBURG, Va. (WHSV) – Prices at the grocery store and at the gas pump continue to rise.
A local financial adviser said the current state of the market can impact your long-term plans, particularly for retirement.
“Once money started printing, people got stimulus checks and interest rates fell, institutions could borrow money to buy more stocks and things like that, so we’ve seen a rapid market recovery,” Dalton Campbell, financial adviser at Anchor Financial Group, said of the 2020 market. “But we can’t do that in this scenario because we actually have to hit back after printing all that money.”
Campbell said it would take some time for things to get back to normal. This can be difficult for those planning to retire in the next few years.
“They know if they’re contributing enough or if they’re about to have enough at some point to create the income they need. This stuff is really important when the markets are down,” Campbell said.
For those who are already retired, Campbell said don’t withdraw your funds unless you have to.
“That can be problematic for people who are really close to retirement. They need to make sure their calculations are correct, make sure they work with their adviser or a counselor or someone who can help make sure this isn’t really going to derail their overall plan or delay their retirement four to five years.
If you must take your required distributions, take the absolute minimum.
“They say I want $50,000 or $60,000 in retirement, it’s just not…we can’t do that. You’ll need a greater amount of money than that to really have a meaningful lifestyle during your retirement years,” Campbell said.
He said it’s best to have both short-term and long-term strategies and stay consistent with what you’ve been doing to save from the start because it won’t last forever.
“One thing I consult with a lot of clients is how much things are going to cost in the future,” Campbell said.
Campbell said opportunities and benefits can arise from current inflation once those prices finally come down.
“We think it will just take a little while for things to normalize,” Campbell said.
Campbell said it’s best to contact a financial adviser if you have questions, need help or just want reassurance.
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