Inflation risk

Inflation risk is the danger that the purchasing power of your money will decrease over time due to rising prices. For example, if inflation is high, what $100 can buy today might only cost $110 or more in a few years, meaning your savings could buy less in the future. This risk affects investments like fixed-income securities and savings accounts, which may not keep pace with inflation. Essentially, inflation risk can erode the real value of your money, making it important to consider investments that have the potential to grow faster than inflation over time.