3 moves seniors should consider with inflation still high
With a report released earlier in April showing inflation rising yet again and the prospect of interest rate cuts low for the Federal Reserve's next meeting, many Americans may find themselves looking for ways to boost their bottom line. This is particularly true for seniors, many of whom may be heavily reliant upon Social Security and retirement savings. For this demographic, in particular, it's important to explore alternative ways to both protect their existing money — and improve their potential income flow.
Fortunately, there are multiple ways to accomplish both goals right now. Below, we'll break down three moves seniors should consider with inflation still high.
Start by exploring your gold investing options online today.
3 moves seniors should consider with inflation still high
Here are some moves seniors should investigate as they continue to cope with the high cost of inflation.
Invest in gold
Gold has historically been a smart and effective way to hedge against inflation and diversify your portfolio, two features that make the precious metal particularly attractive right now. Gold can help offset the negative influence of inflation thanks to a value that tends to remain steady or even rise during such economic periods.
And that's been the case in recent weeks as the price of the metal has surged to record highs. But the diversification it can offer is also key, particularly for seniors with portfolios largely made up of volatile stocks and bonds. In this case, gold can help balance the performance of those assets, offering another layer of protection that's especially valuable now.
Learn more about the benefits of investing in gold online now.
Consider a reverse mortgage
If inflation and higher borrowing costs have dramatically affected your available cash, homeowners 62 and older should consider turning to a reverse mortgage. This loan, based on your home's appraised value at the time of application, will only need to be paid back if you sell the property or die.
And, while it may not be ideal to tap into your existing equity, particularly if you were planning on leaving it to loved ones following your death, it's still preferential to going further into debt. For many seniors, it can be a smart way to supplement limited retirement income right now.
Learn more about your reverse mortgage options online today.
Review bank accounts
The inflation rate last month was 3.5%. The average interest rate on a regular savings account right now is 0.46%. So if you're keeping your funds in a regular account, you're losing money and not keeping pace with inflation. As such, it's important to periodically review your bank accounts for opportunities to further grow your savings.
High-yield savings accounts, for example, operate the same way regular savings accounts do, but with an exponentially higher interest rate (up to 6% for some accounts right now). Certificates of deposit (CDs), meanwhile, may come with even higher rates, although they will require savers to lock their money away for an extended period of time. Either account option, however, is generally preferable to the minimal rate you're likely earning with a regular account now.
See how much more you could be earning with a high-yield savings account here.
The bottom line
While high inflation and elevated interest rates can be problematic for seniors, there are ways to effectively offset some of the negative ramifications. By investing in gold, for example, seniors can better hedge against inflation and diversify their portfolios. Reverse mortgages, meantime, offer an alternative income source with less baggage than other home equity borrowing options do. And by opening high interest-earning accounts like high-yield savings and CD accounts now, savers can earn significant sums of money simply by switching their savings strategies. As is the case with all financial decisions, however, it's critical to carefully consider each of these moves in order to improve the chances of financial success.
