How Inflation Hurts Retirees and How You Can Protect Yourself
A step-by-step guide to getting the most from your money even as prices keep rising.

What is inflation, and why does it matter?
In simple terms, inflation means prices are rising, and your purchasing power is declining. It’s that painful pinch you feel when you pull out your wallet at the grocery store or gas pump.
If you’re on a limited or fixed income — as many retirees are — inflation can take a significant toll on your lifestyle and your nest egg. You may have the same amount of money coming in, but you can’t buy the same goods and services with it.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Consumers have been paying more — a lot more — for food and fuel for a while now. But the price hikes haven’t stopped there. (Et tu, Netflix?) According to the Bureau of Labor Statistics, inflation surged by 7% in 2021, the largest increase in nearly 40 years. And core inflation, which excludes those volatile food and energy prices, rose 5.5% from a year ago. The numbers in January were even worse: The Consumer Price Index showed prices were up 7.5% overall in January vs. a year ago.
Unfortunately, Social Security’s 2022 cost-of-living adjustment (COLA) — a generous 5.9% — won’t help retirees much. High prices are expected to take a sizable bite out of that boost in benefits every month, and this year’s 14.5% increase in Medicare Part B premiums will likely gobble up whatever is left.
So, what can you do to ease the pain of inflation? Here are some steps to consider:
Rethink Your Portfolio
Whether you’re already retired or looking to retire in the next few years, to generate a real return from your investments, you must earn more than you’re losing to inflation. (Currently, that would mean earning more than 7%.)
Thanks to a strong market, you may have achieved that goal this past year. Looking ahead, however, you might want to make some changes to ensure you can maintain those inflation-beating returns.
Your financial adviser can help you decide which options and opportunities are appropriate based on your time horizon, risk tolerance and goals. And there are plenty of strategies to look at, including investing in dividend-paying stocks, real estate investment trusts (REITs), gold, fixed-income annuities, U.S. Treasury Inflation-Protected Securities (TIPS) and IShare TIPS exchange-traded funds (ETFs).
Review Your Income
Are there steps you can take to increase your income, even if it’s only a temporary bump, to get you through this current wave of inflation?
If you’re already retired, that might mean doing some freelance consulting, taking a part-time job or selling some of your Star Wars collectibles on eBay. Other options could include potentially utilizing a reverse mortgage to supplement your income or, after a careful analysis of your investments, temporarily increasing your required minimum distribution.
If you’re still working, did you get a raise this year? Was it enough to cover the rise in your cost of living? If your income didn’t increase by more than inflation, you effectively got a pay cut. You may want to consider asking for a bit more or a one-time bonus.
Control Your Expenses
When was the last time you sat down and took a good look at your budget? Expense creep is real — and you may be an unknowing victim if you’ve put the bulk of your bills on autopay. It’s easy to fall into the trap of thinking, “Well, it’s only a little more each month,” for a subscription service, club membership or other discretionary expense. But those monthly spends can add up if you aren’t paying attention.
Are there places you can cut expenses? You might want to start where inflation is hitting the hardest — by dining out less, spending less on certain foods, and planning car trips more carefully to save on fuel.
It also may be a good time to evaluate your debt. Would refinancing your mortgage or taking out a bill consolidation loan while interest rates are still low help you free up some cash while times are tight?
Don’t Panic
Imagine you’re in California, driving down the Pacific Coast Highway. On your right, the sun is setting over the beach, and it’s beautiful. On your left, traffic is at a standstill because of a bad car accident. There are sirens and flashing lights. And the wreck is getting all your attention — it’s getting everyone’s attention — instead of the awesome sunset.
Don’t let that happen to your retirement.
If you’re worried about inflation, be proactive and ask for help if you need it.
Having the right plan in place can make it easier to tune out the noise and stay focused on the amazing years you have ahead of you.
Kim Franke-Folstad contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Geoffrey Johnson is the founder and president of Arizona-based Wealth Management Resources (www.wmrconsultants.com). He has been an investment adviser since 1987, and he is a licensed Investment Advisory Representative (IAR) and Retirement Income Certified Professional® (RICP®).
-
AI Goes To School
The Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
Where to Invest in an Uncertain Market
In an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?
Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last Long
According to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond Investors
High-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance Agent
Your insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
-
Two Estate Planning Issues You Should Never Overlook
This estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
-
The Four D's That Could Force You to Sell Your Business
Business owners (or their heirs) can be rushed into a sale of their company if they haven't planned for a major change in circumstances — or the four D's.
-
The Three Retirement Tax Issues I Nag My Clients About
A financial professional highlights areas of tax planning that retirees should have on their radar as they finalize their retirement plan.
-
Do You Need Disability Insurance? Three Things to Know
Disability insurance can help replace some of your income during unexpected life events. Here are the basics, courtesy of a financial professional.