Effects of inflation
We all know the cost of goods and services rises over time. Single postage stamps that cost 85 cents just 3 years ago now cost a dollar. The same thing has happened to virtually everything we purchase. This is what we call “inflation” – a sustained rise in the cost of goods and services over time. It also means that the purchasing power of a dollar decreases over time because you need more and more dollars to buy the exact same goods or services. This has important implications for your savings; especially in your retirement years.
