Worried inflation might kill your retirement? Read this

There will be no avoiding the inflation conversation during the next few months. Prices are going up all around us — lumber (wait, they’re down suddenly), cars, my favorite chicken with mixed vegetables entree from Asia Sushi down the block. As I’ve written before, folks old enough to remember the 1970s are terrified of inflation, and for good reason. That was a scary time.

Like all things, today’s inflation story is far more nuanced. Inflation can be bad. No inflation — or deflation — can be bad. In a Goldilocks economy, inflation of 2% or so is just right, many economists think. It’s enough to give people raises so they can afford rising prices and keep the almighty dollar slowly spinning up and up. Until all these post-Covid lurches in the economy are worked out (see: lumber prices) we won’t really know what is a temporary problem and what is a last problem). I will say this: Some day, probably soon, the Fed will raise interest rates, and the stock market party we’ve been enjoying for some time will finally end. Even that’s a mixed bag. It should help end hyper-inflation in the housing market (mortgages won’t be so cheap), but it’ll also hurt the 50% of so of Americans counting on that bull market.

As with all things, your individual circumstances matter far more than the macro data you are reading about in the news. If you aren’t in the market for a new (used) car, what do you care that car prices are soaring? On the other hand, if you’re trying to buy a new construction home right now, you are likely to be cursing federal stimulus checks. And *local* inflation matters more than national inflation. If you live in Northern New Jersey and your property taxes have risen from $16,000 to $29,000 in the past few years, who cares about the price of coffee beans?

As with most things financial, the biggest mistake people can make is overreacting to the inflation news. Don’t lunge your portfolio into gold because someone on TV told you 1970s gas lines are coming soon. Plenty of charlatans are using the boogieman of inflation to sell snake oil; don’t fall for it. At the same time, if you are anywhere near retirement age, your (reasonable) anxiety that you’ll outline your retirement savings is probably getting worse. Don’t ignore that. Plan for it. There’s only one failsafe way to have more money in retirement. To make more money, and save it.

Forbes Advisor recently asked me to explore this important issue in a piece titled “How to Boost Your Retirement Income.” Across the Internet, you’ll find pieces with trite (cruel?) advice like “Just save more.” Ugh. The hard truth is that retirement in the future will not look like retirement today. We’re all going to work longer. But the flip side of that is there many, many more 60-something-friendly part-time jobs available today. The gig economy started this trend; the pandemic really accelerated it. For the piece, I talked with the folks at FlexJobs, who told me they see a sharp increase in decent work-from-home training/teaching jobs that can pay up to $30/hour in technical fields. When you’re working from home, you get to keep more, thanks to the lack of commuting costs. There is a big BUT here, however: If gig work is new to you, beware the self-employment tax, which can really eat up your income. Now is a good time to prepare for this headache.

Still, here’s the critical point: Every dollar you *don’t* spend at age 65 is worth roughly $4 you’ll have at age 85.

The Forbes story has much more on this topic. Below is a short excerpt, but you can read the piece in full here.


“Over the last five or 10 years, we’ve seen the rise of part-time, freelance and temp project work that is at the more professional level. There is a lot more opportunity now than there used to be, and from last year, the rise of remote work will be sticking around for a long time to come,” said Brie Reynolds, senior career specialist at FlexJobs.com, a site devoted to “flexible hiring.”

Plenty of employers who would never have considered remote workers before the pandemic are all-in now that many of the kinks have been worked out. Gig work at home brings with it the twin blessings of flexible hours and no commuting costs. And while in the past, a lot of work-from-home jobs involved tedious data entry or customer service, the opportunities are quickly expanding.

“One area we find really appealing to clients is education and tutoring. A much wider variety of subjects are being tutored now,” Reynolds said. “From early childhood to adult continuing ed. There’s tech, math and science, and those command a higher pay rate, anything from $15 to $20 an hour at the lower end up to $30 to $35 an hour.” There are also far more part-time consulting gigs than ever before. Reynolds recommended interested workers search not just by job titles but also by the skills they have to maximize opportunities.

One word of caution: Just like in the real world, there’s ageism in remote work. Legal or not, it’s a reality that applicants must consider, Reynolds noted. In fact, since remote work depends so heavily on technology, it’s important that applicants include a skill section demonstrating familiarity with tools like Zoom and Google Drive, she said.

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About Bob Sullivan 1637 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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