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Safeguarding the all-important nest egg from inflation bubbles

A recent survey conducted by the Society of Actuaries shows that 72 percent of pre-retirees and 55 percent of retirees believe that their retirement savings are protected from inflation. But retirement educator Steven Vernon believes that these perceptions on retirement savings may be too optimistic.

"I think there's a say [and] do gap there, where people say they're planning for inflation, but they're not," Vernon told Reuters.

When it comes to ensuring that a retirement investment plan is adequately protected, he - and other experts - believe that there are a few different factors to consider, including Social Security, a retirement portfolio and income annuity.

Working until 66 can help retirees bolster Social Security income, because waiting longer to withdraw benefits will result in higher lifetime payments. The best way to create a stable retirement portfolio may be to plan for a yearly withdrawal rate of four percent and prepare for inflation within a year or two, he says.

If older adults purchase income annuity, they can buy a one-time purchase of the cost-of-living feature. This can act as another safeguard against inflation.

Because retirement planning and organizing finances is an ongoing process, many Del Webb retirement communities feature investment clubs and finance groups where everyone from the novice to the day trader can participate and learn from each other. Sun City Peachtree, for example, offers weekly Investment Club meetings where retirees can get together and discuss the latest stock news, personal investment tips and finance questions.   

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