Smart401k Blog

  • Inflation and Your Retirement Account

    Inflation, simply put, is the rise in prices of goods and services and the loss of purchasing power of your money over time. This means that your savings in today's dollars will not be able to purchase as much tomorrow as you are able to purchase today. For example $20 in 2008 has the same buying power as $7.53 in 1980 and $20 in 1915 has the same purchasing power as $433.30 in today's dollars! History shows that inflation has averaged approximately 3-4%a year. For example, prices rose an average of 2.4% in the 1960's, 6.7% in the 1970's, and 5% in the 1980's. (www.bls.gov)
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