Inflation doesn’t knock on the door—it slowly seeps in and quietly reshapes your future.

Over time, even modest increases in the cost of living can significantly reduce the purchasing power of your savings.

And yet, many people—especially those nearing retirement—continue to rely on tools that feel safe, but may not be fit for purpose when it comes to long-term wealth preservation.

The Illusion of Safety in Cash and Term Deposits

Term deposits and traditional savings accounts are often seen as low-risk, conservative options. And in the short term, they may be exactly that: stable, predictable, and easily accessible.

But when you look through the lens of long-term planning, they start to lose their shine.

At current rates—typically around 4%—term deposits may not even keep up with inflation. What seems like a return is often just a slow erosion of value. While your balance goes up, your ability to buy goods, travel, or cover future healthcare costs might quietly diminish.

The real challenge is that this erosion isn’t visible. You don’t see red figures on your statement like you would with shares or property fluctuations. But that doesn’t mean it’s not happening.

The Risk of Falling Short

For retirees, or those approaching retirement, this matters greatly.

When your income needs extend 20, 30, even 40 years into the future, relying on tools that don’t grow in real terms can increase your risk of running out of money—or needing to scale back your lifestyle far earlier than expected.

It's not just about returns—it’s about resilience. If your plan can’t withstand rising living costs, market dips, or unexpected expenses, it may not be a plan at all.

Using the Right Tools for the Job

Just like you wouldn’t use a butter knife to cut through timber, you shouldn’t rely on cash-based tools to do the heavy lifting in your long-term financial plan.

That’s where inflation-aware investments come into play:

• Growth assets like shares can offer strong long-term returns and help outpace inflation.
• Inflation-linked bonds adjust for rising prices and provide more stability.
• Real assets—such as property or infrastructure—often generate income that increases with inflation.
• Diversified portfolios bring these elements together, offering a balanced approach that adapts across timeframes.

But here's the question we encourage you to reflect on:

Do you have the time, tools, and expertise to assess how each of these investments behave in different environments?

Do you understand the risks and trade-offs?

Can you model how these assets interact with your lifestyle goals?

Are you confident that your current plan will work in both calm and stormy markets?

Financial freedom doesn’t come from guessing—it comes from knowing. It’s about using the right tools, in the right proportions, at the right time.

A Plan Built for the Future You Want

At Central Financial Planning, we believe your retirement strategy should do more than help you “not run out of money.” It should help you live the life you want—with confidence, clarity, and the flexibility to adjust as life evolves.

That means:

✔ Making sure your savings are not just growing—but growing in real terms

✔ Aligning your portfolio with your personal goals and timeframes

✔ Testing your plan against inflation, volatility, and longevity

✔ Ensuring your strategy supports your lifestyle now, and a legacy later (if that’s part of your vision)

Final Thought

Inflation is a fact of life. But how you respond to it is a choice.

If you're unsure whether your current plan can go the distance—or if you’d simply like a second opinion—we’re here to help. Our job is to bring clarity to complexity, and help you use the right tools to protect what you’ve built.

Get in touch with Central Financial Planning

We’ll help you plan well, so you can live fully.