Should Truckers Rethink Retirement Strategies Given Inflation?

he current economic situation may serve as a teaching moment for people in the workforce who are planning their retirement. A recent Wall Street Journal article indicates that an increased number of retirees are being driven back into part-time and full-time jobs because of inflation.

“The share of people age over 55 either working or looking for a job — their labor-force participation rate—rose to 38.9 percent in March from 38.4 percent in October, according to the Labor Department. More than 480,000 people in that age group entered the labor force during the past six months, according to the three-month moving average, which smooths out volatility,” the Wall Street Journal reports.

It seems they based their fixed expenses and incomes on relatively consistent prices the country enjoyed only a few years ago. With truck drivers experiencing improved earning potential, 2022 may present an opportunity to rethink retirement through a severe inflation lens and make the following strategic changes.

Breathe, Plan Retirement Based on Economic

It’s important to keep in mind the country is experiencing the highest inflation in 40 years. While that sounds scary, the last time goods, materials, and services spiked this fast was during the 1980s. History teaches us the economy tends to move in cycles and things will likely level off. That means truckers planning for retirement don’t necessarily need to plan for quick-rising prices for years to come. Consider working with a financial planning professional and include a 3-5 percent inflation buffer.

Think Through Spending Phases

Newly retired people typically want to explore their freedom and enjoy each day to the fullest. Taking trips to exotic resorts, dining out more often, and purchasing expensive hobby toys and tools are common during the first phase of retirement. But the go-go-go phase generally wanes with time and age. Many retirees over 75 start to enter the slow-down phase marked by fewer trips and less spending. Those in their 80s usually like the comfort of home and see health care as their primary expenditure. The key takeaway is that long-term planning can account for evolving financial needs.

Strategically Deploy Social Security Benefits

The amount of money retirees receive from Social Security may not be sufficient to pay all their bills and have a comfortable lifestyle. One way to approach these retirement benefits is to position them to cover basic expenses such as automobile repairs, utilities, groceries, health care co-pays, and others. While these items may tick up over the years, so will your Social Security check. The cost-of-living adjustment for 2022 is reportedly 5.9 percent, which may keep pace with essential expenditures. But it’s not necessarily a smart retirement strategy to be reliant on government checks for everything.

Select Investments that Increase with Inflation

Upwards of 55 percent of Americans invest in some type of stock. While some can dramatically improve, others tank. The stock market remains something of a gamble. In terms of secure retirement investments, it may be in a trucker’s best interest to work with an expert who understands how to hitch on a trailer that generally increases with inflation. For example, rental property income typically follows economic highs and lows.

Truck drivers occupy a unique economic position as salaries increase and demand remains high. Consider working with financial strategists and identify investments that are keeping pace with inflation right now. We’re immersed in a rare teaching moment and the knowledge truckers accumulate can enhance your quality of life during retirement.

Sources: wsj.com, dol.gov, thebalance.com, money.usanews.com