|The rising cost of living due to inflation has had a significant impact on our quality of life over the last fifty years.
Failing to plan for inflation and how it can raise the cost of gas, eggs, milk, property taxes and most expenses we need to pay to live can leave you with a decreased quality of life year after year. You need an income that grows with inflation just to keep pace with the same cost of living.
Here is a powerful example of the power of inflation:
Statistics Canada has calculated how inflation has increased the costs of a basic basket of household goods (food and supplies) over the last fifty years.
In 1950 the basket of goods cost $100
In 1970 the same basket of goods cost $165.04, a 65% increase!!!
In 1990 the same basket of goods cost $633.33, a 633% increase in forty years!
Your retirement may last forty years - are you prepared to pay six times more for the same goods? Will your earnings support this?
In 2010 the same basket of goods cost $945.52 or almost 1000% higher than 1950.
The facts are clear - failure to create retirement income that rises will inflation could leave you in the poorhouse in as little as 20 years from the start of retirement.
An annuity is one of the few sources of income where you can build in inflation adjustments that will stay on pace with inflation.