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Inflation Can Be a Scary Word

Inflation can be a scary word.

Inflation can be a scary word for people who are retired. It’s code for “prices are going up, but my income may stay the same.”

The most recent reading on consumer prices put inflation back into the conversation. The Consumer Price Index (CPI) rose 0.8% in April 2021 and jumped by a greater-than-expected 4.2% year-over-year.1

April’s increase was led by a 10% increase in used cars, with additional pockets of increases, notably in transportation services and commodities. Core inflation, which excludes the more volatile food and energy prices, was up a more modest 3.0% from April 2020.2,3

While there is good reason to be concerned about inflation, there also are compelling reasons to adopt a wait-and-see approach.

Federal Reserve Chair Jerome Powell says today’s inflation will be transitory and attributed to the post-pandemic economic expansion. But others are not so certain. Warren Buffett has said price increases are more structural, meaning they are becoming part of the prices we pay every day.4,5

Inflation is just one factor considered when creating a portfolio. If inflation starts to trend higher than expected for a period of time, adjustments can be made. For example, if the Fed chooses to raise interest rates to help manage inflation, it may be appropriate to review a portfolio’s bond holdings. Longer-term bonds can be more sensitive to interest rate changes.

We are keeping an eye on inflation and understand the concerns of our retired, or soon to be retired, clients. We work with professionals who monitor the economy and who can help interpret the recent government reports. But if inflation is starting to worry you, please reach out. We’d welcome the chance to hear your thoughts.

1.CNBC, May 12, 2021
2.U.S. Bureau of Labor Statistics, May 12, 2021
3.U.S. Bureau of Labor Statistics, May 12, 2021
4.CNBC.com, May 3, 2021
5.CNBC.com, April 28, 2021

The market value of a bond will fluctuate with changes in interest rates. As rates rise, the value of existing bonds typically falls. If an investor sells a bond before maturity, it may be worth more or less than the initial purchase price. By holding a bond to maturity, an investor will receive the interest payments due plus your original principal, barring default by the issuer. Investments seeking to achieve higher yields also involve a higher degree of risk.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

Dr. Jason Van Duyn
586-731-6020
AQuest Wealth Strategies
President

Dr. Jason Van Duyn CFP®, ChFC, CLU, MBA is a Registered Representative with and Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member FINRA & SIPC. The LPL Financial registered representative associated with this site may only discuss and/or transact securities business with residents of the following states: IN, IL, TX, MI, NC, AZ, VA, FL, OH and CO.

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Cyberattack: CPI Hit the Wallet

Cyberattack: CPI Hit the Wallet

A cyberattack shut down a major gas and energy pipeline supplying the East Coast of the United States for several days. The actual pipelines themselves are still functional and have since started running again, but it’s led to long lines and closed gas stations in many regions.1,2

While this situation is alarming and has a number of short-term consequences, it’s important to remember that the attack has mainly affected the computer systems used to transport the fuel. The flow of gasoline will soon return to its normal rate.1

Adding to the financial woes is the latest Consumer Price Index (CPI), a high jump of 4.2%. (Economists were looking for 3.6%.) Fed officials are saying that this represents a temporary rise and indicate that these may be influenced by the overall economic recovery, post-pandemic.3

Whatever lies ahead, it’s important to remember that, while these might be difficult matters for the household, they do not necessarily reflect the economy as a whole. Your economic strategy factors information like rising prices, so it’s important not to let certain events distract you from the bigger picture. As always, we at AQuest are happy to have a conversation with you about any concerns you may have.

1. MarketWatch, May 10, 2021
2. Washington Post, May 11, 2021
3. CNBC, May 12, 2021

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

Dr. Jason Van Duyn
586-731-6020
AQuest Wealth Strategies
President

Dr. Jason Van Duyn CFP®, ChFC, CLU, MBA is a Registered Representative with and Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member FINRA & SIPC. The LPL Financial registered representative associated with this site may only discuss and/or transact securities business with residents of the following states: IN, IL, TX, MI, NC, AZ, VA, FL, OH and CO.

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2021 Retirement Confidence Survey

Will your retirement dreams match your reality?

That’s perhaps the most critical question to ask people who are currently retired. Was your retirement what you expected, or was it something else?

For more than 30 years, the Employee Benefit Research Institute (EBRI) has conducted the Retirement Confidence Survey, which gauges the views and attitudes of working-age and retired Americans regarding retirement and their preparations for retirement.1

Part of the survey takes a deep dive into workers’ expectations for sources of income in retirement versus retirees’ actual income sources.

Here’s a couple of highlights of the 2021 survey.

Only 33% of workers expect Social Security to be a significant source of retirement income. In reality, 62% of retirees say it’s a major source.

Further, more than 50% of workers believe that workplace retirement savings plans will be a significant source of retirement income. But the 2021 survey found that workplace plans are a major source for only 20% of retirees.

Surprised? We’re not. These numbers are consistent year after year. Here’s another nugget to consider: 26% of workers plan to work for pay in retirement. In reality, only 7% of retirees do.

For most, retirement is the “next chapter” in life. It’s critical that your finances support your retirement vision, so there are no surprises when it’s your turn.

Let us know if there’s a change in your retirement dream. We’d welcome the chance to hear what prompted the difference, and we’ll be sure to make any needed adjustments in your financial strategy.

1. Employee Benefit Research Institute, 2021 Retirement Confidence Survey

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The
opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

Dr. Jason Van Duyn
586-731-6020
AQuest Wealth Strategies
President

Dr. Jason Van Duyn CFP®, ChFC, CLU, MBA is a Registered Representative with and Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member FINRA & SIPC. The LPL Financial registered representative associated with this site may only discuss and/or transact securities business with residents of the following states: IN, IL, TX, MI, NC, AZ, VA, FL, OH and CO.

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