High Inflation Impacting Employees

I’m sure many of us are tired of hearing about the high inflation rate in the U.S. More importantly, you are probably tired of feeling the effects of high inflation. Not only does high inflation mean workers’ take-home pay is shrinking, but the value of the dollars in their 401(k)s and similar retirement plans won’t go as far as they might have hoped. In addition to being worried about having enough money to cover basic expenses for items such as food, housing and transportation, many people — particularly those who are within five years or less of retirement — are also concerned that they may have to work longer than planned. Or worse yet, they are distressed about the possibility of never being able to afford to stop working. As prices continue to increase, people are being forced to rethink their spending, savings strategies, and retirement plans. How long will we have to deal with the high inflation? What’s the solution? Is there a quick fix to the inflation problem? Do employers have a role in the solution? Can they help employees through these difficult financial times? 

This article attempts to explain the basic causes of inflation, who controls inflation, and how to fix the problem. The article concludes with the assertion that “the current fight against inflation won’t be quick. Fixing inflation requires time and patience.” When it comes to employers’ role in helping employees, this second article states that “many organizations are reassessing compensation and taking a closer look at financial health resources to help workers face inflation. In addition to providing adequate compensation, some companies are investing in the well-being of all employees, ensuring they can bring their full selves to work. Other companies are looking at flexible work, mental health resources, expanded parental leave and financial aid around retirement and student loan debt.” We know that not all employers can increase compensation for staff. However, it’s clear that employees are relying on their employers to develop solutions that will help with financial burdens and make things a bit easier until we can get through this period of high inflation. 

Note: You should talk with a professional financial planner to help you consider what steps to take today and in the future so you can be prepared for retirement.