FINANCIAL MATTERS

From a purely investing perspective, this can be an unwise move, in that you will lock in your losses and could miss out when the market bounces back Your portfolio could take a long time to recover.

And from an inflation-proofing point of view, this is a losing strategy. Most savings accounts offer interest at 23%, which would be considerably less than inflation in 2022 (it peaked at 8.1% in June). At 8% inflation, cash savings that increase by 3% interest will effectively lose their value by 5%.

Thankfully, there are several strategies that can help protect your retirement savings from the ups and downs of inflation.

How a long-term financial plan can overcome inflation

A solid, long-term financial plan will take into account a number of potential variables, such as longevity (how long you’ll live), market dips and inflation.

At IG, we stress test our clients’ financial plans for a number of possible scenarios, such as what would happen if investments performed worse than expected, or if inflation were to shoot up? We also revisit every plan, every year. It’s a living plan, so we adjust it to adapt to changes in the markets and your personal circumstances

Our financial planning formulas help to account for inflation in your plan, so that, even if it does rise considerably, you’ll be more likely to have the retirement income you need, for the length of time you’ll need it

Also, the earlier you start saving, the longer you have for your investments to grow and enjoy the benefits of compound returns. The larger your savings, the bigger your safety net against inflation

How a well-diversified portfolio protects against inflation

It’s worth remembering that inflation in Canada has rarely exceeded 3% for most of the last 30 years. When planning for the long term, the Financial Planning Standards Council of Canada recommends using an annual inflation rate of 2.1% for retirement plans

Portfolios that contain a healthy percentage of equities (stocks or mutual funds containing stocks) have historically always outpaced inflation considerably, over the long term. You would also need your portfolio to be well diversified it should contain a good spread of industries and geographical locations.

Also, investing in companies that can pass on increased costs to customers, such as grocery stores and other retail outlets, will also help to protect your investments from inflation.

Other strategies to protect retirement savings from inflation

Certain investment assets can perform better than others during times of high inflation

Commodities, such as oil, gas, wheat, etc , tend to have a fairly consistent demand, so price increases usually have little effect on their consumption levels.

Inflation-protected assets, such as real return bonds and Treasury Inflation

Protected Securities (TIPS) are designed to deliver cash flow that keeps up with the cost of living. Both are available in mutual funds.

Real estate investment trusts (REITs) provide an easy way to invest in real estate without becoming a landlord Pooled money means that your risks of unpaid rents are much lower The value of Canadian real estate has, on average, grown considerably above the rate of inflation over the last 15 years.

Make sure your retirement portfolio

is inflation-proofed

Your IG advisor can discuss your retirement needs with you and develop a robust financial plan that will help you understand the steps you need to take to provide the income you need, when you need it. These plans can be stress-tested for inflation, as well as other variables, such as market volatility and increased lifespan.

Written and published by IG Wealth Management as a general source of information only. Not intended as a solicitation to buy or sell specific investments, or to provide tax, legal or investment advice Seek advice on your specific circumstances from an IG Wealth Management Consultant

Jacob Gaudet is a financial consultant on the wealth advisory team Gaudet Group Private Wealth Management. He helps clients get more out of their money, so they can get more out of life. Jacob specializes in six key areas: Investment, Retirement, Mortgage, Estate, Tax and Insurance Planning. With more than 60 years of combined experience, Gaudet Group Private Wealth Management is committed to making clients’ interests their top priority. Do you have questions you’d like Jacob to Answer? Email him at jacob.gaudet@igpwm.ca.

Aries: March 21 - April 19 (Fire)

–This week you feel shaky and unwell This is from emotional stress building up You want your love life to take off, but you are afraid of your true feelings. You have to focus on the small things that bring you joy. Baby steps get you through this week unscathed

Taurus: April 20 - May 20 (Earth)

– Time to face the music You need to take your health more seriously, you need to listen to your loved ones advice and you need to stop procrastinating on everything It is time to go back to this simple plan and start to follow it again

Gemini: May 21 - June 20 (Air) –

The Universe is on your side this week You seem to be intentionally ignoring all the signs that are placed in front of you Your love life is in need of more love Your career is feeling stale Take a you moment your feelings matter and they need to be recognized.

Cancer: June 21 – July 22 22 (Water) – You have been struggling with your love life You are over thinking a lot you want to just be happy You have to have some real heartfelt talks to accomplish that. You will have clarity and a change of heart by the end of the week.

Leo: July 23 - August 22 (Fire)

– You will be tested this week. You will see great triumph and disappointment. Your love life will endure most of this. You will decide if you're all in, or it's time to be out This has been planned out for a long time Do not make choices while in the moment

Virgo: August 23 - September 22 (Earth) – Try and focus on what is going right in your life You easily slip into ‘poor me’ and ‘I wish mode ’ This will not serve you at all If you get trapped in this negativity, your week will be a complete right off You are the only one that can change this to a positive outcome

Libra: September 23 - October 22 (Air)- You have learned some tough lessons in love lately this week you will begin to feel lighter and hopeful again You will bring out the positive in all situations and work hard on planning a fun weekend for yourself. Self love is more important than any other love.

Scorpio: October 23 - November 21 (Water) – You feel anxious at the beginning of this week. This is because you have big ideas and you want to start them. Your love life brings changes into your life path, you will decide if this is good or bad? Your career is what needs the most focus this week, you have more control on changing things there

Sagittarius: November 22December 21 (Fire) – You made some new connections last month Those people now come into play this week and help you get things done You see new potential in your career, show up at work and be heard or nothing changes for you.

Capricorn: December 22 - January 19 (Earth) – You are very intelligent, it is time to let the others around you see it. You have negative and positive talk in your love life this week. If you want growth you have to have uncomfortable conversations in love and career If you can get these out of the way quickly, you could have a very relaxing week

Aquarius: January 20 – February 18 (Air) – You are throwing out tons of chemistry Do not waste that stuff Try to use it sparingly, sprinkle it on all aspects of your life Your love life becomes steamy, your career attracts the people that can make you more successful Or just turn this internally and you will look and feel amazing all week.

Pisces: February 19 - March 20 (Water) – You turn serious this week time to buckle down and focus Your love life can be a great support for you. Use your loved ones to help you get back on track. You will have to take a break from work and catch up on some much needed healing You can make this choice or it can be made for you, that is up to you

Tina Graziano was born an energy reader. She uses her gifts to heal and guide others as a life coach. If you need support and insight in life, contact Tina for an energy reading directly online at https://www.facebook.com/ Tina.Graziano.Energy.Reader /?ref=page_internal