Many economists say the country’s self-sustaining growth may give the Federal Reserve the chance to increase interest rates next year. With the economy’s slow growth, many are expecting the inflation rate to be moderate over the next decade. For 2015, the U.S. outlook on inflation is between 1.5% and 2.0%, with the core inflation rate ranging from 1.6% to 2.0%.
What does this mean to your finances? At AOG Wealth Management, a Northern Virginia financial advisor, we want to help you become financially prepared for the future. Here is some helpful information about inflation and how it may affect your finances.
Seek investments that are likely to provide return greater than or at least equal to the inflation rate. Certain investment products address inflation risk such as such as Treasury inflation-protected securities (TIPS), real estate investment trusts, and inflation-indexed bonds.
Inflation occurs in consumer prices and wages. If your income remains the same and there is a price increase, your power to buy goods decreases. This is one of the reasons it’s important to check the inflation forecast. Once you understand inflation projections, you’ll be able to determine whether you need to start investing or finding other opportunities to meet the effects of inflation.
Value of Debt
Although price inflation may reduce your purchasing power, it may help you with your debt payments. As prices increase, the value of your debt decreases. Although you’re not missing payments, you’ll be paying less.
Inflation affects your life more than you probably notice. When planning your finances, make sure to include a realistic inflation rate. Although you cannot control inflation, knowing what to expect from the market may help you make sound financial decisions.
To learn more about the government forecast on inflation and how to best manage your finances, consult an AOG Wealth Management financial planner in Northern Virginia. We specialize in asset management in Northern Virginia and the greater Washington DC area. With over a hundred years of combined experience, our team can guide you toward reaching your full financial potential.
AOG Wealth Management offers investment advisory services offered through Kalos Management, Inc., 11525 Park Woods Circle,Alpharetta, Georgia 30005, (678) 356-1100. AOG Wealth Management is not an affiliate or subsidiary of Kalos Management, Inc.
AOG Wealth Management, Inc. does not provide tax or legal advice. The opinions and views expressed here are for informational purposes only. Please consult with your tax and/or legal advisor for such guidance.