Inflation: How Retirees Can Fight Back
In a recent Charlotte Observer piece, the spotlight is on inflation’s slow but steady toll on retirement savings—a threat that may seem invisible, but can dramatically reduce your purchasing power over the years. I highlight in the article: “Inflation is the silent pickpocket of our financial lives. If your savings are sitting in a zero-interest account while the price of everyday goods and services is climbing, you're quietly losing ground with every passing month.” This is more than just headline worry: while average savings accounts yield a paltry 0.62% (with many big banks offering far less), the latest Consumer Price Index clocks in at 2.9%. That gap, even in a modest inflation year, quietly erodes nest eggs protected only by “keeping cash safe.”
The article details how essentials like shelter, food, energy, and even used cars are among the costs rising fastest right now. Factors like regional price spikes, a weakening U.S. dollar, and new tariffs are adding pressure for households, especially in states like California, New Jersey, and Hawai‘i. As I’ve seen with many clients, “everyone is feeling the pressure of rising costs”—and ignoring inflation just piles up trouble for later.
But there are practical solutions. The article outlines four key strategies: owning “hard assets” (like real estate or commodities) that tend to hold value as prices rise; using Treasury Inflation-Protected Securities (TIPS) as a buffer against surging costs; regularly adjusting your retirement drawdown and spending to match real-world inflation; and, crucially, making sure your cash is working harder for you. High-yield savings accounts now pay 4% or even more—far better than the major banks—and can help your emergency fund keep pace with the cost of living.
Bottom line:
You can’t control inflation, but you can control your response. As I counsel all my clients, don’t let inertia or outdated strategies eat away your retirement security. Be intentional: upgrade your cash accounts, diversify where possible, and revisit your plan regularly to make sure your money isn’t quietly being “picked” by inflation. Active planning isn’t just smart—it’s essential in today’s economy.