Mattress Money
By: Max Valavanis, CFP®
In recent years, more and more people have been holding onto their money in savings accounts and cash. Understandably. With the growing concern over the economy, we can feel hesitant to invest. As a Certified Financial Planner™, I see seniors walk through my door all the time worried about what may happen to their nest egg if they trust the markets. Sometimes this concern drives them to have thousands of dollars hidden in the nooks and crannies of their home. I like to call this Mattress Money. Whether you are sequestering cash under your bed, in the closet or the bank, doing so can potentially do more harm than good for you and your family’s well being.
As the cost of living climbs, many retirees are recognizing the reality of how far their money can take them. Inflation continuously rears its ugly head and eats away at our buying power. In fact, The Bureau of Labor and Statistics reports a 23.3% inflation rate since January 2020. As our cost of living rises, the value of Mattress Money deteriorates. Coupling this with people commonly living into their late 80s and 90s, preserving the value of our money has never been more important.
A popular way to outperform inflation is investing in the stock market. Unfortunately, this also poses a problem for many seniors. With the markets at all-time highs and their volatility echoing the weather of a Florida summer afternoon, many want to steer clear of this type of investing completely.
In the past couple of years, many savvy investors have decided to shift their attention to interest rates. The same interest rates that make it difficult to purchase a home or car can offer a good opportunity to invest. Many of these interest-rate investments have a fixed rate of growth over a select period of time. This is the same way the bank may be making money off your mortgage, but instead of you borrowing the money, you are lending it. Over the past decade, these fixed interest rates didn’t hold the same growth potential as they do today, giving conservative investors a fresh opportunity to earn a consistent return and help combat inflation. The Federal Reserve is considering decreasing these interest rates back to the levels they were for most of the past decade. As a result, many investors are locking into these guaranteed rates for years before the Federal Reserve cuts them.
As a Certified Financial Planner™ (CFP®), I specialize in assisting seniors and retirees with their retirement planning. If you are interested in a fixed return or are seeking a better way to store your Mattress Money, I welcome you to a complimentary appointment at our office. You can call ValaVanis Financial at (321) 956-7072. I look forward to seeing you soon.
Securities offered through J.W. Cole Financial, Inc. (JWC) Member FINRA/SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). ValaVanis Financial and JWC/JWCA are unaffiliated entities.