Inflation, Savings and Retirement for Preppers

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Stimulus will put money in our pockets.
Investing is an important way of prepping for your future.

My wife and I stopped by the hardware store and picked up a 50-foot hose for $44.95. It is identical to the hose we bought when we moved here four years ago for $34.95. Adding insult to injury, the store now adds a 3% surcharge to all card transactions, so I paid cash.

I remember thinking, “$10, well, that’s not too bad.” But it’s 28.5 percent. That’s a pretty big jump, which we can lie at the feet of Bidenflation. Inflation eats away at our money, increasing the chances that we will be able to afford less in the future.

Inflation is Cumulative

The left whines about the voters who feel the economy is bad. They point out inflation and is down to 3.5 percent. First, we all know the current measurement of inflation under-estimates the true impact of inflation, so inflation is higher than the numbers they quote. Second, it’s important to remember the 3.5 percent inflation is on top of the 9 percent inflation we suffered through a couple years ago and on top of last year’s inflation. Inflation is cumulative, so you have to add it up from when Biden took office in January 2021 to today, 42 months later, to see its full impact. It’s also why they say inflation is 3 percent and we feel like it is 30 percent or more, often much more.

When inflation is 2 percent, it takes 36 years for prices to double. When inflation is 9 percent, prices double in 8 years. That’s why inflation is so painful, because prices that rarely rose suddenly jumped multiple times per year. To the high-paid government types in Washington, it’s just a number. To the rest of us, we feel it in our wallets.

An Expensive Year

2024 has been an expensive year for us. We’ve spent more in the first six months than we spent all last year, but I can’t blame that entirely on inflation. We decided to make home improvements we had put off for several years, and then we invested in our solar power system. (Is it an investment? Time will tell, but I feel better about spending that much money if I call it an investment.)

If I expected to live only another ten years, I could spend like this every year, but we have to be prepared to live 25 or even 35 more years. That means we have to be parsimonious with our retirement savings. With good luck and a rising market, we’ll be wealthy in 20 years. With bad luck, our monthly income will run out before the month does. I know people on fixed incomes in that very position today. You can see them at the Senior Center lining up for the free lunch. Become a driver for Meals on Wheels and you’ll meet dozens.

Save and Invest for Survival

Saving money can be tough when you are a prepper because there is always some additional prep you need. More food, another gun, more ammo, a better water filter, some conibear traps, an off-road vehicle, a bigger chain saw, a retreat, etc. But don’t overlook retirement savings; it is critical for long-term preparedness.

As someone who is a lifelong prepper and was “forced” to retire early, let me remind you that retirement savings is also a prep. While we can’t predict if the world as we know it will come to an end, we can predict we will get old.

Just as Joe Biden is facing what he surely considers an unwelcome shove into retirement, you may be one day be kicked out of a job at an age that makes finding a new one difficult or impossible. You may age out of a physically demanding job. A family member may need you to care for them and you have to quit your job. Or, you may just get tired and want to retire early. That takes savings.

The best way to start saving for retirement is in a 401k or similar plan provided by your employer. (These plans are tax deferred, so they lower your taxes now, but you have to pay when you take money out.) If you can afford to do so, put in the maximum amount allowed by law and/or your employer. Granted, if you make $60,000 a year, you can’t afford to put $23,000 into your 401k. But start by putting in 10 percent and then add a percent every year until you max out. Hopefully, your employer will match a portion of your contribution, which is like getting free retirement money.

Investing For Preppers

Keep in mind that I am not a financial planner, accountant, lawyer, or tax expert and am not qualified to give you financial advice, but I can tell you what worked for me.

  • Put as much as possible into your retirement plan. At the very least, put in enough to get the maximum match from your employer. If you don’t have an employer plan, open an IRA or look into other retirement plans. Work a second job or a side gig if you need to so you can save more.
  • When you change jobs, roll the funds in your former company’s 401k into an IRA and start making contributions to your new employer’s plan. An IRA will give you more investment opportunities and flexibility than most employer plans.
  • Never borrow from your 401k or other plan. It’s not an ATM, so resist the urge to use it like one.
  • Pay off your debts and then spend only what you have. Sure, we could have financed our solar power system, but we dipped into savings and paid cash. No sense trading an electric bill for a loan payment.
  • Build up your emergency fund and then keep saving. When you get more than $50,000 in savings, look for a better way to invest it.
  • If you have less than $250,000 in your IRA, stick with a company like Fidelity or Vanguard and take advantage of their advice. If your balance grows well beyond that, look into hiring a financial advisor. (Not a stock broker. Not some dude at a bank.) Sure, they will make recommendations for how to invest your retirement money, but they can also give you advice about many other financial topics and help you manage risk. Interview several, figure out what they charge, and make sure they will teach you and show you what they are doing so you understand and agree with it.

Preps as an Investment

Can your preps be an investment? Sure. If you buy gold and silver, you may one day sell it for more than you paid for it. If you buy a retreat or other prepper property, its value should grow, especially if you improve it. The guns and ammo? They will lose value at first, but may level off or grow down the line, especially during shortages or if prices of new guns climb. The skills you learn? I consider them an investment in yourself.

But the food and camping gear? It won’t have much resale value unless the SHTF. Then it may save your life. It may also come in useful if you get laid off or laid up because of an injury. The world doesn’t have to end for you to eat the items in your prepper pantry.

No matter how much gear you have, you’re not going to retire on it. Unless you have a huge cache of precious metals and cash some in every month, your preps won’t pay for the car insurance, fix the front steps when they rot out, or put a new set of tires on the car. But your IRA can, at least after you turn 59-1/2.

I prepped for 30 years and the end isn’t here yet, but my retirement is. Prepare for retirement because it’s a sure thing. The day will come when your income stops, or at least pauses until Social Security kicks in, assuming it is still in existence. Save. Invest. Put money into your retirement plan and don’t borrow against it. it may not save your life, but it will make old age a hell of a lot more livable.

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