1. Savings erode if you’re not investing
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If your money isn’t growing, it is losing purchasing power to inflation, the rising of prices over time. For instance, you’d need $290.88 in October 2017 to buy the same stuff you could get for $100 in October 1980, according to the U.S. Bureau of Labor Statistics’ inflation calculator.
The Federal Reserve has a goal of maintaining a 2 percent inflation rate. If the Fed is successful, your savings must earn a minimum of 2 percent a year just to retain its full value over time.