Whether you’re sending your kids to university or preparing for retirement, meeting future financial needs can be a mighty challenge.
This is due to the many economic issues that eat away at your savings. Inflation, for example, is increasing the cost of gas, groceries, and other daily necessities. The COVID-19 pandemic, on the other hand, has thrown a wrench into many people’s personal finances.
Starting Your Investment Journey
This infographic from BlackRock introduces their MyMap range of multi-asset investment funds, and describes the benefits to first-time investors.
Today’s Savings Struggles
The above infographic highlighted three savings struggles that make it difficult to meet your future financial goals.
The first is inflation, which refers to the increase in prices of goods and services over time. To understand how inflation can erode the value of your savings, consider this example:
- £100 worth of goods in 2000 would cost £179 in 2021
- £100 worth of goods in 1980 would cost £456 in 2021
In other words, inflation reduces the purchasing power of your savings over time.
The second savings struggle is increasing longevity, also known as longer life expectancies. Living a longer life is generally a good thing, but it does increase the risk of outliving your savings. Coming up with a solid retirement plan is becoming more important than ever.