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Beating inflation's effects

Article-Beating inflation's effects

• Prepare a detailed and flexible plan for your retirement and keep it up to date as your circumstances change.

• Maximize your contributions. Contribute as much as you can as early as you can to your tax-deferred retirement plan. Allow the magic of compound interest to help counter inflation's effects.

• Resist the temptation to use your retirement portfolio as an emergency funding source. Cashing out a portion of your tax-deferred retirement plan will result in taxes and penalties that will put a serious dent in future growth.

• Include some equities in your retirement portfolio. Most experts agree that stocks historically offer the best opportunity to achieve a rate of return on investment that will outpace inflation.

• Invest in dividend paying stocks that have a long payment history and a record of steady dividend increases.

• Invest a portion of your retirement portfolio in inflation-indexed treasury securities (TIPS).

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