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Financial Expert Rick Parkes Explains How Gas Prices and Inflation Affect Retirement Planning
Rick Parkes, financial and retirement planning expert, discusses how higher gas prices and inflation will affect your retirement and income planning.
“Gas prices affect us in many ways. The vast majority of what we eat and what we wear gets to stores by long haul truck delivery. For example, higher oil prices increase the production cost of fertilizers and food processing and these higher costs are passed on to consumers in the form of higher prices at the grocery store. As these cost increases ripple across multiple supply chains, they can push core inflation higher,” remarked Rick Parkes.
The inflation rate in America is based on the Consumer Price Index (CPI) and is calculated by the government monitoring a “market basket of goods and services” to accurately index the cost increases we all deal with over time. The Bureau of Labor Statistics explains that the CPI represents all goods and services purchased for consumption by the reference population. These goods and services are broken into major categories such as Food/Beverages, Housing, Apparel, Transportation, Medical Care, Recreation, Education/Communication and others.
“The CPI does not include investment items, such as stocks, bonds, real estate, and life insurance, since these items relate to savings and not to day-to-day consumption expenses,” explained Rick Parkes. “I found that quite interesting, because it is blind to market pressures and it excludes taxes which we already know are going up, starting in 2013. So, my clients who are in retirement face an increase in their cost of living due to higher taxes, but there isn’t any relief for that cost.”
Rick also offered three insights as to how this information informs the retirement-planning strategies for his clients. “First, taxes are undoubtedly going up. Second, regardless of economic maneuvers (what they call quantitative easing), what our clients buy is likely to get more expensive - even if the government’s ‘basket’ doesn’t want to own that reality. Finally, we keep a close eye on our income-planning strategies, so that the retirees who place trust in us can continue to live the lifestyle they earned.”
For more information on this topic, or to learn how Rick Parkes can help you, please visit www.desllc.org
About Rick Parkes:
Rick is co-owner of Diversified Estate Services, LLC and Retirement Investment Strategies a comprehensive financial advisory firm. Diversified Estate Services, LLC and Retirement Investment Strategies is a firm that specializes in assisting individuals to gain clarity, balance and focus which empowers them with confidence. He teaches the powerful knowledge of retirement planning to attorneys, CPAs, and the general public.
Rick Parkes industry designations include Life Underwriter Training Council (LUTC) and Certified Retirement Financial Advisors (CRFA). Rick is also a radio talk show host.
Rick's firm is a proud member of the Better Business Bureau with the highest rating A+, where he is pleased to instill customer confidence of nearly 1,000 consumer’s inquiries. Rick is also a member of the National Ethics Bureau, where he successfully passed the Ethics Check System™, a rigorous eight-point background check for criminal, civil, and business violations.