In many cases the yield on safe bonds like those issued by the federal government don't
even keep up with inflation, never mind provide income one could live on.
As you build your income plan, it's important to include some investments with growth potential that may
help keep up with inflation through the years.
You could divide up your account into small chunks and spread them across different institutions to qualify for their insurance, but your earnings will likely only
just keep up with inflation.
The fact that cash no
longer keeps up with inflation is punitive — especially considering that stock and bond investors are enjoying good performance.
Remember that your salary and social security will continue to increase during your earning years, so you will be more than able to
keep up with inflation as you save for retirement.
As you build your income plan, it's important to include some investments with growth potential that may help
keep up with inflation through the years.
If you just keep everything in cash, you are barely
keeping up with inflation which means if you need $ 1 million for retirement you need to actually save $ 1 million.
Historically, bond performance
barely keeps up with inflation and isn't particularly tax efficient (if you are buying bonds directly outside of an RRSP).
Slightly more sophisticated is the notion that if public spending
just keeps up with inflation — real - terms spending — then we're still not seeing proper austerity.
When prices are rising or stable, leverage allows people to rack up tremendous amounts of net worth even if prices
only keep up with inflation.
In terms of his personal investments, the socially responsible funds do
n't keep up with inflation and besides many of these funds charge highly fees.
These funds seek to at least
keep up with inflation by purchasing Treasury Inflation Protected Securities, a special type of government bond that pays an interest rate which is periodically adjusted for inflation based upon the Consumer Price Index.