Charming the Inflation Snake

Are you an inflation charmer? If so, the Federal Reserve may need your help…

Even if you are not an inflation charmer, you may be doing just enough to charm the inflation snake out of its slumber and take a bite at your retirement. One way you might do just this is by leaving too much cash sitting in your bank account.

The cash that is sitting in your bank account is not working hard enough to help you towards your retirement. Cash cannot earn the same kind of returns that is possible with other investments. In fact, you may actually be losing purchasing power as that cash is not keeping up with inflation.

Every year, things you want to buy cost just a bit higher than the previous year. This is inflation. The cash sitting in your bank needs to earn at least as much as the inflation rate just to keep up its purchasing power. If it fails to keep up, in a decade that cash will be worth far less than what it is worth today.

It is important to keep some of your assets as cash in an emergency fund. Some financial advisors will guide you to leave 3 to 6 months of your expenses in a cash account. This is a wise move. Leaving your assets in cash in excess of this number is when you might start charming the snake out of its slumber.

Talk to your financial advisor or book a time with us to review your cash balances today.