Loss of purchasing power for retirees: Understanding the impact.

Macroeconomic context: a reassuring appointment in the United States 🇺🇸 US financial markets experienced positive momentum this week, both in terms of stocks and bonds

Macroeconomic context: a reassuring appointment in the United States 🇺🇸

US financial markets have seen positive momentum this week, both in stocks and bonds . This trend is largely attributed to the nomination of Scott Bessent as Treasury Secretary by Donald Trump.

Considered a moderate profile , Scott Bessent inspires confidence in investors . His stance on measured pricing policy and his prudent management of inflation are seen as guarantees of economic stability , thus supporting market optimism.

Private equity: a costly setback for Goldman Sachs 💥

Goldman Sachs is poised to record a $900 million loss following the collapse of Northvolt , a Swedish battery company. The bank held a 19% stake in the company .

This bankruptcy, although spectacular, underlines an important lesson:

• Even investments with high potential can fail .

• Rigorous diversification remains essential to mitigate shocks in a portfolio.

The Northvolt episode serves as a reminder that private equity, despite its attractive prospects, carries significant risks .

Pension increases: a mixed reality 🧓

An increase... but not for everyone 📉

In January 2025 , retirement pensions will be increased by 0.9% for all beneficiaries. However, only retirees earning less than the minimum wage ( €1,426.30 ) will see their purchasing power maintained , as the estimated inflation rate for the year is 1.8% .

A second increase of 0.9% is planned for July 2025 , but it will only concern modest pensions .

A concrete example of a loss of purchasing power 📊

• Retired on €1,000 : his pension will increase to €1,018 in 2025, in line with inflation .

• Retired at €1,900 : his pension will reach €1,917.10 , lower than the level needed to compensate for inflation .

Thus, the wealthiest retirees will suffer a loss of purchasing power , a trend that could become widespread in the years to come.

Key points to remember ✅

• +0.9% in January 2025 for all pensions

• An additional 0.9% increase in July 2025 will apply only to pensions below the minimum wage.

• Retirees earning above the minimum wage will only receive one increase, which will be lower than the projected inflation rate.

Conclusion: Vigilance is necessary for retirees 🔎

The announced increase will not be enough to preserve the purchasing power of all retirees. In a context of persistent inflation , these partial adjustments leave some retirees vulnerable to the rising cost of living.

At Evvest , we emphasize the importance of appropriate wealth management , even in retirement:

• Integrating complementary solutions to the public pension

• Diversify your investments to offset monetary erosion

With a balanced approach, it is possible to preserve one's purchasing power while securing one's future.