How to Help Shield Your Retirement From Inflation
Picking the right investments at the right time can help ensure inflation won't flatten your retirement savings. Here are some tips.


Retirement security requires long-term planning, but inflation can complicate these efforts. While the Federal Reserve usually targets an inflation rate around 2%, the U.S. has experienced seven periods of inflation rates exceeding 5% since World War II, according to Modeling the Impact of Inflation on Retirement Savings Portfolios, a report by the Society of Actuaries (SOA).
High inflation can harm retirees’ buying power. Staying well-informed about investment choices, both during the planning phase and after retirement, can help protect against inflation risks.
Snapshot: Inflation’s impact on retirement
Recently, the SOA Research Institute released initial findings from its biennial Retirement Risk Survey. Since 2001, this survey has explored how retirees and pre-retirees understand and manage risks in retirement, including the impact of inflation. The 2024 survey included more than 2,000 U.S. respondents between the ages of 45 and 80.

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Respondents were asked how rising costs of different categories of expenses impacted their ability to manage their retirement savings. The survey found that 51% of pre-retirees and 35% of retirees reported being impacted by higher food and daily living expenses. Additionally, 45% of pre-retirees and 29% of retirees reported that rising utility expenses had impacted their retirement funds.
Respondents were also concerned about inflation’s impact on the overall value of their retirement savings, with 78% of pre-retirees and 58% of retirees expressing concern about savings keeping up with inflation.
Recent inflation trends have also impacted pre-retirees’ retirement planning strategies. More than half (51%) of pre-retirees who make less than $50,000 annually and nearly half (47%) of those making $50,000 to $100,000 have considered taking on another job or acquiring additional sources of income to help save for retirement.
Additionally, about 40% of pre-retiree respondents across income brackets have considered delaying retirement or returning to work to help save for retirement.
Planning for inflation: Asset allocation basics
Most private-sector employers in the U.S. have moved away from defined benefit plans, like pensions, to defined contribution plans, like 401(k)s. This has shifted the responsibility to individuals to choose asset allocations that help grow retirement savings and minimize the risk of outliving their funds once they have retired.
The Retirement Risk Survey found that inflation affects many retirees’ finances, so being strategic in choosing assets is important for achieving retirement security. Different types of assets offer varying degrees of inflation protection:
Stocks. These assets, also called equities, are often considered one of the most effective options for long-term inflation protection. The companies issuing the stocks often are able to increase prices for their goods and services and maintain revenue streams that can outpace inflation.
However, stocks may not prove to be an effective short-term option to protect against inflation because stock returns often decline when inflation rises.
Treasury Inflation-Protected Securities (TIPS). Designed to protect investors from inflation, TIPS adjust to changes in the Consumer Price Index (CPI), which is a measure of inflation. This ensures investors get returns that reflect the inflation rate. Interest payments on TIPS also increase with inflation, offering another layer of protection.
However, investors should consider the trade-off of the inflation protection of TIPS against potentially lower returns than other asset classes.
Real estate. Historically, property has provided some degree of protection against inflation because property values and rents often go up when prices rise. However, such protection may also depend on other factors, such as the property’s location, type and overall economic conditions.
Bonds. These assets generally do not provide much protection against inflation, though there may be exceptions when certain strategies are used.
A high-level overview
The SOA Research Institute recently studied how inflation may affect different asset allocation strategies through a basic projection model. Retirement planning happens in two phases: accumulation and decumulation.
The accumulation phase is the period when individuals save and invest for their retirement. It’s common for people to invest in a higher percentage of stocks during this phase.
The period when people have retired and begin drawing from their retirement fund is called the decumulation phase. While the main goal for the accumulation phase is growth, the decumulation phase is more focused on a stable income, risk management and ensuring retirement savings last throughout life.
The Modeling the Impact of Inflation on Retirement Savings Portfolios report looks at how inflation may affect strategies in both phases. Instead of trying to determine the most optimal strategies, the study highlights how inflation can interact with a variety of investment factors, leading to different outcomes based on strategy choices.
History has shown that we can expect periods of high inflation. So it’s important to be aware of strategies that may protect retirement savings from periods of rising prices and other retirement risks. The SOA Research Institute offers additional resources on inflation’s effect on retirement planning.
Related Content
- How Inflation Is Impacting Retirees in 2025
- Rising Prices: Which Goods and Services Are Driving Inflation?
- How Inflation, Deflation and Other 'Flations' Impact Your Stock Portfolio
- 10 Cities Hardest Hit by Inflation: Did Yours Make the List?
- How to Deal With Inflation: Advice From a Financial Adviser
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Steven Siegel is a Senior Practice Research Actuary at the Society of Actuaries. He is the staff lead for the Society’s Aging and Retirement Strategic Research Program and other practice areas. He is passionate about developing research and education materials that help improve the retirement experience for all stakeholders. He is a frequent author and speaker for industry publications and meetings.
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