Plain-English definitions for the terms you'll encounter on your financial journey.
An increase in Social Security or pension benefits to help maintain purchasing power as inflation rises.
The possibility that the rising cost of living will reduce the future value and purchasing power of retirement savings.
Purchasing Power Parity is an economic theory that compares the cost of the same basket of goods in different countries to see if their currencies are fairly valued. It essentially asks: how many Big Macs can you buy for the same amount of money in one country versus another?
The amount of goods or services that can be purchased with a specific unit of currency.
An economic theory that compares different countries' currencies through a 'basket of goods' approach. It suggests that exchange rates should adjust so that the same goods cost the same in different countries.
An economic theory used to compare the buying power of different currencies by measuring the cost of a fixed basket of goods in each country.