How Will Inflation Affect My Retirement Plan?

Key Takeaways

• Work even 4.5-7 months longer to offset reduced pension cost-of-living adjustments, and delay Social Security to age 70 to lock in higher benefits that automatically adjust with inflation each year
• Retirees in 'go-go years' (early 60s) spend more, but spending often declines in 'slow-go years' (70s+); build variable spending into your plan rather than assuming flat inflation-adjusted withdrawals throughout retirement
• Your actual inflation impact depends on your specific situation: renters face much higher inflation pressure than homeowners with fixed mortgages, so analyze your expenses rather than reacting to headline inflation numbers
• Inflation projections at 3% annually over 30 years are typical for long-term planning; short-term spikes like current rates won't derail plans that account for this, and years of near-zero inflation may have already built in a spending cushion
• Treasury Inflation-Protected Securities (TIPS) and I Bonds aren't reliable inflation hedges; focus instead on controllable factors like working longer, delaying Social Security, and building inflation adjustments into your withdrawal strategy