What will inflation and taxation do to your money?

What will inflation and taxation do to your money?

When many people think about investing, they jump to the conclusion that it’s wise to go with the lowest risk portfolio possible. I understand why someone who’s not trained in this area might think that, because it’s logical to think that you won’t lose money if you don’t take risks.

​You want to have some of your money in these kinds of investments, no doubt about that. The problem comes in when you don’t get the balance right, and your money doesn’t grow fast enough to keep up with inflation and taxation. You run the risk of going broke by playing it too safe.

​​Just think about it this way, from June 2020 to June 2021 inflation was 5.4%!!! What that means is if you earned maybe 1% in a bank CD, that you still lost -4.4% of buying power. You lost money safely! Not cool!

​Inflation and taxation put Americans at risk, and you need to know why.

Inflation: Simply put, everything’s going to cost way more in the future. Suppose you’re planning for retirement using the same numbers for expenses in the future as you have today (for example, you spend $500 a month for groceries or $400 a month for utilities and you expect those expenses to remain the same in 10 or 20 years). In that case, you’re in for a rude awakening down the road.

One of the biggest expenses you’ll have in retirement – healthcare – sees double the amount of inflation as everything else.

Taxation: Our population is getting older and living longer, so our entitlement programs are at risk. Programs like Social Security, Medicaid, and Medicare will likely not be sustainable if we don’t increase taxes. Our national debt is constantly increasing- it too won’t improve without raising taxes.

​You’re going to run into some real problems if you don’t consider this in your plan. It’s more important than ever to ​create a solid financial ​strategy that can help you grow your money enough to keep up with inflation ​while at the same time legally cut your tax burden. After all, you may be legally required to pay Uncle Sam’s bill, but you don’t have to leave him a tip.

​​If you want to setup a quick 15-minute call to chat about making sure your current strategy ​can handle both inflation and taxes​ just call us at 407-960-4052 or click​ this link to go to our online calendar-  CLICK HERE!

​All the Best,


Nicholas Royer, MRFC

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