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Inflation - What It Means for Retirement Savings

Concerned middle aged couple looking at a computer

Many people are concerned about inflation on a national and global level. But a lot of our clients’ concerns are much closer to home. On a personal level, inflation unquestionably affects how much your retirement dollars will be worth. Over time, it can seriously dwindle your nest egg, which is the opposite of the direction you’re trying to go in. 

 Below is helpful guidance regarding inflation’s impact on your retirement and steps to mitigate its impact.


Inflation’s impact on retirement

  • According to research, a 1% inflation rate over twenty years would eat up $34,406 of your Social Security benefits alone (LIMRA, 2016). If the inflation rate increases to 3%, the difference would be over $117,000.

  • In 2018, the Centers for Medicare and Medicaid Services estimated that healthcare expenditures increased by 4.6% over the previous year. Over that same period, inflation averaged 2.4%. Translation? Even when inflation is low, you may be hit harder than others because the expenses that affect you most continue to rise.

  • Healthcare isn't the only thing that can drive up your expenses. Housing, travel, and supporting children and grandchildren also influence how much you spend and how fast your retirement savings deplete.

How to mitigate inflation’s effects

  • Consider downsizing. Trading in a larger home for a smaller one, even if the mortgage is paid off, reduces your costs associated with property taxes, utilities, homeowners insurance, and maintenance.

  • Expand your investments1. Add investments to your portfolio that may increase in value as inflation rises, such as Real Estate Investment Trusts (REIT) or energy sector stocks. 

  • Balance with bonds2. Balance stock investments with more conservative options, such as bonds.

Inflation can lessen your retirement savings, but it doesn't have to affect your dreams for the golden years. Reach out, and let’s pull together a plan to help you overcome inflation’s subtle influence. We are here and happy to help.

  If you have further questions about financial impacts do not hesitate to email us at, call 248-733-4344, or set a time to talk on our calendar

The information contained in this material is for general information only and are those of the author, and not a recommendation or solicitation to buy or sell investment products. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.

1 REITs and energy sector stocks are subject to various risks such as illiquidity and property devaluations based on adverse economic and real estate market conditions and may not be suitable for all investors. A prospectus that discloses all risks, fees and expenses may be obtained from your financial professional. Read the prospectus carefully before investing. This is not a solicitation or offering which can only be made in conjunction with a copy of the prospectus. 

2 The return and principal value of bonds fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their origin.

This article contains links to third party websites. Stalt Financial does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Stalt Financial's web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.


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