Picture this; you’re watching your favorite olympic sport. The athlete you were rooting for just won the gold medal! The top 3 competitors line up on the Olympic platform. You are beaming with pride at your chosen athlete’s and nation’s success. They step down and approach the cameras, and suddenly take a bite out of their medals for a photo op.  “…Why?” you ask?  Well, the history behind this is quite interesting. Before the evolution of technology, and the standardization of precious medals, the average person had to be able to tell whether the coin or item they were inspecting was real. Since gold is a relatively soft and malleable metal, biting a gold coin, for example, was actually a relatively reliable way to tell whether the metal was real or counterfeit. If a bite left a slight indent in the metal, you could at least be sure that you’re in the right ballpark. A common gold counterfeit at the time, lead, is much softer, and most other metals used for this purpose were significantly harder and would not leave a mark. The practice of biting gold medals at the Olympics is an unnecessary but fun one. While the current medals are not made of gold (they’re actually made from recyclable materials!), and while most countries have moved away from the gold standard on the onset of the first World War, gold and other precious medals (one of many types of commodities) still play a valuable role in economics and Personal Finance! Gold has historically been considered one of the hedges against inflation, a topic that has been on many people’s minds as of late. Inflation is the rate at which goods and services increase in price, while proportionally decreasing the purchasing power of your money. Simply put, a gallon of milk may have cost you $2.78 at the turn of the century, cost you $3.32 as late as 2020, and may cost you $4.34 today! Gold, which has a more stable inherent value than paper currency, serves to preserve wealth over the long term.  In today’s economic environment, with the value of the dollar falling, and expected to continue to do so, it is reasonable to look elsewhere to protect your wealth. You may not need to look far when it comes to alternatives in battling inflation; Government bonds pay higher rates when inflation rises, are considered to be more secure, and allow you to lock in a specific rate of return over longer periods of time, while something like gold continues to be subject to volatility.Treasury TIPS on the other hand provide built in inflation protection. At the end of the day, choosing between these options is all based on careful goal setting and Financial Planning.  Looking at historic trends it can be argued that gold is no longer the best hedge against inflation in the short term, but the nature of smart investing is diversification, and while 1/5th of the world’s gold is currently held by (inter)national banks, there may be something to be said about its continued efficacy in the battle against inflation. Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licenses. Contact Me Send a message

Retiring Early: Challenges and Opportunities in a Changing Landscape The desire to retire early is a common goal for many Americans, but the cost of retirement can make this a challenging goal to achieve. According to a recent study by the Employee Benefit Research Institute, only 34% of Americans retire before the age of 60, and nearly a third retire after the age of 65. This is due, in part, to the increasing cost of retirement. Furthermore, the average life expectancy in the US has increased significantly over the past few decades. This means that individuals need to plan for a longer retirement period, which results in the need for additional savings to support an extended retirement period. In the meantime, healthcare costs are a significant factor contributing to the rising cost of retirement. According to a study by Fidelity Investments, the average 65-year-old couple retiring in 2022 can expect to spend $315,000 on healthcare costs throughout their retirement. This can put a significant strain on retirement savings, making it harder for individuals to retire early. Retirement income sources such as social security and pensions have become less reliable in recent years. According to the Social Security Administration, the average monthly social security benefit in 2021 was $1,696, which may not be sufficient to cover all of an individual’s retirement expenses. Additionally, many employers have moved away from traditional pension plans, leaving individuals responsible for funding a larger portion of their retirement income through personal savings or investments. Finally, many individuals may not have a clear understanding of their future retirement needs and expenses. For example, they may not know how much they would need to maintain their current lifestyles in retirement or may underestimate the impact of unexpected expenses, such as home repairs, medical emergencies, or travel expenses. These costs can quickly deplete retirement savings, leaving individuals struggling to meet their basic financial needs. Additionally, they may not be aware of the impact of inflation on their retirement expenses, or how taxation diminishes their income streams, both of which could put a strain on the cost of living over time. Despite these challenges, working with a financial planner can help bridge the gap between the desire to retire early and the increasing cost of retirement. A financial planner can help individuals create a personalized plan that takes into account their unique circumstances, goals, and risk tolerance. They can help identify potential gaps in savings, suggest appropriate investment strategies, as well as identify missed opportunities in tax savings. In addition to managing risk, a financial planner can help clients balance their long-term goals with their short-term needs. For example, a client may need to save for both retirement and a child’s college education. A well constructed plan can help the client balance these competing priorities and ensure that they are on track to meet their goals. By creating a personalized retirement plan, managing investments, and empowering the client to react to changes in their personal situation, as well as pivot in the face of legislative changes, a financial planner can help individuals achieve their retirement goals, regardless of the hurdles they face. Employee Benefit Research Institute (EBRI) – “Retirement Age Expectations of Americans: A 2021 Update”: https://www.ebri.org/docs/default-source/rcs/2021-rcs/rcs_21-fs-2.pdf?sfvrsn=2d83a2f_4 Fidelity Investments – “Planning for Health Care Costs in Retirement”: https://institutional.fidelity.com/app/item/RD_13569_42402/retirement-planning-health-care-costs.html Social Security Administration (SSA) – “Monthly Social Security and Supplemental Security Income (SSI) Benefits”: https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/ Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licenses. Contact Me Send a message