For years, people have struggled with saving up for retirement. With so many obstacles, some people will wind up working well into their retirement years. Now, the Federal Reserve is looking to change how many will look at retirement in the future.
Making It Worse
The Federal Reserve revealed plans to lower interest rates in various aspects of the economy. By doing this, inflation will hover over the two percent mark. "We believe that achieving inflation that averages 2 percent over time helps ensure that longer term inflation expectations remain well anchored at our longer run two percent objective," Federal Chairman Jerome Powell said. The Federal Reserve hopes this number stays put until 2023.
With lower interest rates, saving for retirement during these times becomes even harder. "While it’s a new initiative for how the Fed views inflation, it isn’t new to how the Fed has operated through the crisis. But the decision to systemize the policy will have far-reaching impact, as Fed decisions determine the price of borrowing, the cost of stock ownership and your savings rate," Forbes writer Ryan Derousseau said.
How To Get By
Fortunately, there are some ways to make sure retirement remains stable. Investing in dividend stocks has always been a great way to increase one's income. While the coronavirus has impacted companies, people are still finding themselves investing whenever they can.
Another way people are securing their future by procuring gold and silver. Since the coronavirus, the prices for these materials have seen a surprising increase. Spot gold has seen a 32% price increase while silver gained a 30% price increase. Gold has seen the highest trading levels since 2011.
talk to your financial adviser about how inflation will impact your retirement plan.