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Inflation and Finances: The ins and outs of the economy and how that impacts personal finances can be seemingly and endlessly complicated. When a financial advisor is completing or reworking your financial plan, one of the major areas of influence on that plan is inflation. A highly inflationary environment has the potential to be damaging to recent retirees. We found this brief video helpful for a good explanation of the topic. Watch and learn, and let us know what you think!

How Much Do I Need to Retire?: From advisor Luke Porter …

As an advisor, this is among the most frequently asked questions by clients, prospects, and friends. It’s a very important answer to know! However, there is no quick solution. The answer depends on several factors that are unique to each individual. The JP Morgan Guide to Retirement slide below brings up a few important ones:

  1. How much do you make now?
  2. What percentage of your income do you want or need to replace in retirement?
  3. What percentage of your retirement income is covered by Social Security or a pension?

The answers to these questions will help everyone determine how much they need to retire. That is where the fun starts when we put together a plan to make sure you get there.

Did you find any components of the chart below to be eye-opening? We would love to hear from you.

Business Briefing

  • Treasury Bonds: The yield on the 10-year U.S. Treasury note rose Wednesday to a 15-year high, stoking fears of fallout from rising borrowing costs. The 10-year yield, a benchmark for interest rates that affect many consumers, settled at 4.258%, up from 4.220% on Tuesday. That was the highest close for the bonds since June 2008. The 10-year yield is still significantly below the target rate set by the Federal Reserve, which has been aggressively raising rates to slow the economy and bring down inflation. That means the 10-year Treasury yield could continue climbing. Investors demand higher yields on these bonds to offset inflation risk. (The Wall Street Journal)
  • Mortgage Rates Jump: Mortgage rates jumped above 7% to a 21-year high this week, the latest fallout from the Federal Reserve’s interest rate hikes to fight inflation. Freddie Mac said on Thursday that the average 30-year fixed rate mortgage reached 7.09%, up from 6.96% last week. The rate on the 30-year mortgage—the most popular U.S. home loan—was 5.13% a year ago. Sales of existing homes fell nearly 19% in June compared to a year earlier. (The New York Times)

A Worthy Watch: We hope that none of our clients need to experience the ill effects of Parkinson’s disease. However, we are well aware that it is not an uncommon shared human experience for many, and we found this recent documentary from Michael J. Fox to be raw, honest, and compelling.