Financial Advisor Steve Sexton discusses fears of inflation and how it could affect retirement planning.

San Diego, CA – January 19, 2013 – Steve Sexton, President of Sexton Advisory Group, recently explained inflation, its historical effect on the economy and how it affects our retirement planning today. Mr. Sexton explains:

Inflation is a multi-dimensional thing. It is not just the increase in prices.  Most Americans would agree that their view of inflation has to do with the prices of certain items and if the prices of those items they buy most frequently are up from the prior year – then they are dealing with the effects of inflation.

Price Inflation hurts retirement because most retirees live off a fixed income, so it is especially painful if the interest rates available from safe investments and bank-offered savings plans are low. It is a classic case of, “costs are up and revenue is flat.” However, there is a lot more to it.

Monetary Inflation is a whole different type of inflation. It is a simple inflation to track because it simply means the Government is asking the Federal Reserve to print more money. They are asking to inflate the amount of money available. This idea is, in historical terms, relatively new monetary inflation started during the Kennedy Administration and has been a steady policy in Washington since it started, regardless of political party. Democrats have inflated money supply just as the Republicans have inflated the money supply. And you know what? We, as Americans, like it. More money around equals more prosperity … As long as the money holds its value.

Monetary inflation likely played a key role in the decision to abandon the gold standard in the US, on  August 15, 1971, leading to the “Nixon Shock”.  In essence, the change to a floating exchange rate in the US represented a form of reset for our own currency right here in the United States.

What does this mean to us today? Mr. Sexton continued:

The debate will continue to rage on because although history says one thing you cannot ignore the following and very recent financial report:

10:12AM EST December 13, 2012

The CPI (Consumer Price Index), out Friday, sizes up prices paid by consumers. It’s expected to fall 0.2% for November.

Even the so-called “core” CPI, which omits prices for food and fuel, is expected to rise just 0.1%. This suggests possible deflation and not inflation at all even at a time where the amount of Government debt is reaching nearly unbelievable levels and the Federal Reserve is running the printing press 24/7.

The important thing to consider is the possibility of inflation and, more specifically, what are you doing with your finances to manage that possibility? If you don’t have a plan of action, you may consider some amount of your retirement money positioned to grow with inflation. For long term planning, it is likely a good idea since prices tend to go up over time.

Do you know the questions to ask to make sure you are basing financial decisions on all the facts and not emotions, misconceptions, sales pressure or opinions? Identify all of the facts necessary to make a sound financial decision before you make that decision by visiting www.sextonadvisorygroup.com to learn more about Steve Sexton and his unique process to make sure your financial decisions are made in your best interest.

About Steve Sexton:

Steve Sexton has over 15 years of experience in the financial services industry and holds multiple licenses and designations. His company, Sexton Advisory Group has grown steadily over the last eight years and has seven offices serving Riverside and San Diego Counties.

Sexton is a well-known media expert and has been asked to appear on a variety of Southern California media over the past three years to share his expertise. Steve hosts “Winning In Life Radio with Steve Sexton on 1170am KCBQ and Ch6 CW Daily Living Show” Money Minute” segment in San Diego, Ca.

Sexton also works with many charities. He has sponsored special events for various charities, such as A Salute to the Military, benefitting Pat Boone’s Ryan’s Reach charity, events for Hospice of the Valleys and many more.