Inflation affects all aspects of the economy, from consumer spending, business investment and employment rates, to government programmes, tax policies and interest rates.
Inflation will, over time, chip away at your savings and your investment returns. It will reduce the purchasing power of your money and will be at odds with your long-term plans.
Over time, inflation will make the cost of everything go up and this will become a big problem for you if your retirement income is not guaranteed.
A 1% rate of inflation over the average retirement period (20 years) can be as devastating as a 12% loss in your portfolio's value and can reduce the longevity of your funds by up to 5 years.
At an annual inflation rate of 3% per annum, the average annual cost of basic groceries (for two people) will rise from $10,012 in 2011 to $18,083 in 2031.
Cumulative cost of basic groceries from 2011 through 2031 will be $231,869 (excluding bananas)
Source: ASFA Retirement Index (June 2011)
How can we help?
The first and foremost objective of your retirement income strategy will be the generation of resilient, inflation-proof, long-term income.
We ensure this occurs by optimising your monthly income to maximise your Age Pension benefits and recommending secure investment options that include sources of increasing income.
