Inflation: Back to the Future

Inflation sometimes seems like one of those afflictions of an era long since passed into the
history books. While it’s true that double-digit inflation has been absent for the last 30 years or
more, you may remember the high inflation years of the 1970s. In 2021, the Consumer Price
Index (CPI) rose by 6.8%, the highest point since 1982.

Will the levels of U.S. public debt and loose monetary policy revive the inflation rates of the 70’s
and early 80’s? No one really knows. However one thing is certain—even low inflation rates
over an extended period of time can impact your finances in retirement.

A simple example will illustrate.

An income of $50,000 today at an inflation rate of 3% would have a purchasing power of just
over $32,000 in year 15—a 35% erosion. Said differently, to maintain the desired lifestyle that a
$50,000 income would provide requires $77,900 of income after 15 years of 3% inflation.

Here’s something else to consider. Retirees may feel the impact of inflation even more than
most. Why might this be the case?

Healthcare. Retirees may be subject to a higher rate of inflation than “the headline” Consumer
Price Index because retirees may expect to spend more on health costs than most Americans.
Healthcare inflation has been nearly double that of the CPI in recent years.

Social Security. The CPI is the most frequently used statistic for measuring inflation. It is
technically the “Consumer Price Index for All Urban Consumers” (CPI-U). But the Social
Security Administration bases its cost of living adjustments on the “Consumer Price Index for

Urban Wage Earners and Clerical Workers” (CPI-W). The CPI-W gives less weighting to
housing and medical care, which are categories that seniors typically spend more on. This
means that the social security cost of living increase may not be keeping up with the actual cost
of living increases that many seniors face.

Investment Allocation. Many retirees’ investment portfolios tend to have more weighting in
conservative investments such as bonds, cash, and other fixed income. In the current time of
very low interest rates, yields on these fixed income investments may not be enough to keep up
with inflation.

Inflation is a thief; it steals the purchasing power of your retirement savings. But, as with
your other possessions, there are strategies that may help you from being “robbed” of your
purchasing power. Discuss with your financial advisor to see if your retirement plan and
investment strategy is positioned to help you guard against the impact of inflation.

Adrianna Rocha

Client Relations Specialist

240-379-6929 V
240-439-6889 VP
512-379-6909 FAX
info@kramerwealth.com

Since joining Kramer Wealth Managers in 2021, Adrianna Rocha has been a client service dynamo, ensuring every client interaction is seamless and delightful. She’s the go-to guru for all things client experience, handling everything from videophone chats to scheduling meetings and processing forms with a smile. Her goal? To make sure every client feels valued and well-cared-for.

Adrianna graduated with a Bachelor of Arts in Communication Studies from Gallaudet University in 2017 and brings nearly a decade of customer service experience to our team. She thrives on personal connections, celebrating both her achievements and those of our clients. When she’s not busy at work, you might find her indulging in her passions—dogs, houseplants, essential oils, and the tantalizing flavors of Mexican cuisine. Proud fur-mama to her adorable Aussie mix, Ziva. Adrianna brings a touch of warmth and enthusiasm to everything she does.

Q: What’s your favorite part of working with clients?

A:  I enjoy client service because it allows me to help people and make a positive impact. Using my listening skills to understand client needs and solve problems is satisfying. I love turning negative experiences positive and the daily variety of challenges.

Adrianna is not registered with Osaic Wealth.

Adrianna Rocha

Client Relations Specialist

240-379-6929 V
240-439-6889 VP
512-379-6909 FAX
info@kramerwealth.com

Adrianna Rocha joined Kramer Wealth Managers in 2021.

Adrianna is responsible for client experiences and service. As part of the customer service team, she strives to help and provide top-notch service to our clients. As part of her role, she communicates with clients through videophone, schedules client meetings, prepares and processes forms, and gathers information for our advisors.

Adrianna Rocha graduated with a Bachelor of Arts in Communication Studies from Gallaudet University in 2017. Before she joined our team, she worked in the customer service industry for nearly a decade. She excels in human-to-human relations and takes pride in not only her own accomplishments, but her clients’ as well. Adrianna enjoys chatting about her slight obsession with dogs, houseplants, essential oils, and food: especially Mexican food! She is also a proud fur-mama to her beautiful Aussie-mixed pup, Ziva.

Adrianna is not registered with Osaic Wealth.

Jack Morley

Client Relations Specialist

240-379-6929 V
240-439-6889 VP
240-379-6909 FAX
info@kramerwealth.com

Jack Morley has been a vital part of the Kramer Wealth Managers team since 2010, starting with various projects and officially joining full-time in 2013. As our go-to Account Service Specialist, Jack is the friendly face and reliable voice who ensures a smooth client experience. He’s the linchpin in client communications, handling account maintenance and bridging connections between clients and our advisory team.

A 1998 graduate of Gallaudet University with a BA in Psychology, Jack brings a wealth of customer service experience from retail and human services. His handyman skills are a bonus, making him the resident problem-solver and DIY enthusiast. Outside the office, Jack enjoys long walks with his dog Bailey.

Married for 25 years to his wonderful wife, Monica, Jack is also the devoted dad to two dynamic daughters who keep him on his toes. When he’s not walking Bailey—he’s likely tinkering on a new project or spending quality time with his family.

Q: What’s your favorite part of working with clients?

A:  I enjoy assisting clients in maintaining their accounts and ensuring there is a smooth transition in between changes being made within their accounts.

Jack is not registered with Osaic Wealth.