You're Too Broke to Stop Investing

When the economy is tough, we all look for ways to cut our expenses. And when the costs of bare necessities like food, heat, and fuel leap through the roof -- like they're doing now -- anything that's not absolutely critical is a candidate for the chopping block.

When times are tight, it's tempting to consider the money you're investing for your future as a non-critical expense. After all, every penny you invest today is money you can't spend on groceries, gas, or other bills.

If it's a choice between putting food on the table right now and saving for groceries several decades from now, the choice is obvious: Eat, so you'll be around to enjoy that future! But if the choice you face isn't quite so dire, those same rising prices make it all the more critical that you keep saving -- now.

High prices are robbing you blind
Unfortunately, those same outrageously high prices that are making it so tough to make ends meet right now are also threatening your comfortable retirement. Inflation robs you blind today, tomorrow, and whenever it rears its ugly head. Not only does it cost you more to live today, but it also increases the amount you need to save to meet your needs during retirement.

Say, for instance, you have a goal of retiring with $1 million. That may look like a decent target today. Thanks to inflation, though, by the time you hit a normal retirement age, you'll need a lot more socked away to have the equivalent of today's $1 million in spending power. This chart shows just how much you'll need at age 70 to replace $1 million of today's dollars:

The farther away your retirement -- and the worse inflation turns out to be -- the more you'll need to save to have the earning power you expect.

Are you there yet?
But all is not lost. Whether or not you can keep saving now, whatever money you have already invested will keep growing between now and retirement, too -- and it may be enough to reach your goal.

Assume, for instance, that you expect an average annualized 8% total return between now and age 70. The following table shows you how much you'd need to have invested today to meet that goal -- without adding another dime.

If you're not there yet, you're too broke to stop investing. Inflation keeps pushing your target farther away, and the only way to successfully fight it is to keep on investing, even when it's tough.

Even a little means a lot
If today's rampant inflation means you're not able to sock away huge chunks of money every month, don't despair. Thanks to programs called Dividend Reinvestment Plans (DRiPs), which allow investors to buy stock directly from the company with little or no commission, you can still invest small amounts of cash efficiently. Once you're enrolled in their plans, check out just how little you need to scrape together to keep buying shares in these great companies:

At Motley Fool Rule Your Retirement, we want to help make sure you have every opportunity to beat the inflation that's threatening your well-deserved retirement. Low-cost DRiPs are just one possibility. To find out how else you can fight that inflationary demon, join us today for your 30-day free trial.

At the time of publication, Fool contributor Chuck Saletta did not own shares of any company mentioned in this article. 3M is a Motley Fool Inside Value recommendation. Dow Chemical is an Income Investor choice. The Fool has a disclosure policy.