5 Practical Strategies to Combat Inflation in Retirement

For hardworking Americans approaching retirement, inflation can feel like a direct threat to the lifestyles they’ve worked so hard to build. Helping clients navigate inflationary periods while maintaining their standards of living without financial worry is imperative. 

The truth is, we’ve planned for inflation. While inflation is something you can’t control, several practical strategies firmly within your control can help protect your retirement lifestyle. 

National inflation statistics often don’t reflect your personal experience. For example, for someone spending $100,000 annually, an inflation jump from 2.5% to 5% translates to about $2,500 in additional expenses — significant but not catastrophic when properly planned for. 

Working with retirees, we’ve observed a natural pattern: many tend to gradually reduce their spending as they age, even without consciously budgeting to do so. This natural behavioral shift — driven by changing interests, energy levels, and priorities — often creates an unintentional buffer against inflation’s effects. 

• How you structure your investment portfolio 
• Which expenses you prioritize in your budget 
• When to claim Social Security benefits 
• How much to keep in cash reserves 

• Federal Reserve policy decisions 
• Global supply chain disruptions 
• Energy and commodity price fluctuations 
• Healthcare policy changes 

Rather than just cutting expenses, focus on spending that brings genuine fulfillment. We’ve observed that the happiest retirees allocate resources toward experiences, family connections, and meaningful community involvement rather than simply accumulating possessions. 

Understanding which expenditures truly contribute to your quality of life allows for more intentional decisions about where you can make adjustments when needed. This approach gives you more control during inflationary periods while preserving what matters most. 

Clients can weather inflation by building in multiple layers of protection, including: 

• Adequate cash reserves – Typically 12-24 months of essential expenses 

• Home equity access – Establishing lines of credit before they’re needed 

• Flexible withdrawal strategies – Adjusting income based on market conditions 

For pre-retirees especially, paying down variable-rate debt ahead of retirement provides additional insulation against inflation’s effects. 

Certain investments have historically provided better inflation protection: 

• Quality companies with pricing power – Businesses that can pass along higher costs 

• Real assets – Including real estate, infrastructure investments, and commodities 

• Treasury Inflation-Protected Securities (TIPS) – Government bonds designed to adjust with inflation 

• Income-producing investments – With growth potential to outpace rising costs 

As a client of Credent, you can trust that our dedicated Investment Management Team watches inflation and takes the necessary steps in your portfolio to protect your assets.  

Social Security benefits include annual cost-of-living adjustments that help maintain purchasing power. For married couples especially, coordinating claiming strategies can significantly enhance lifetime inflation-protected income. 

By optimizing when and how you claim Social Security, many retirees can substantially increase their guaranteed, inflation-adjusted income. These strategies aren’t just theoretical — we implement them regularly for clients facing similar concerns about inflation’s impact on their retirement security. 

Thoughtfully combining multiple income strategies can provide comprehensive inflation protection while maintaining the retirement lifestyle you’ve worked so hard to achieve. 

We’ve observed that retirement spending naturally evolves through distinct phases: 

• Early retirement often features higher discretionary spending on travel, hobbies, and activities.  

• Mid-retirement typically shows naturally declining discretionary spending as activity levels decrease.  

• Later retirement may see a further reduction in lifestyle spending, potentially offset by increased healthcare costs.  

This natural pattern can provide built-in inflation protection. Many of our clients see their overall spending decrease gradually through much of retirement before slightly increasing in later years as healthcare costs rise. 

When inflation makes headlines, most people simply want to know if their retirement plans are still on track. This is where working with a financial advisor can provide a valuable perspective. 

A thoughtful approach involves regularly reviewing plans against different inflation scenarios, making incremental adjustments when needed, and focusing conversations on what you can control rather than external economic factors. Regular check-ins become especially important during periods of uncertainty. The goal isn’t to predict inflation perfectly but to build a plan resilient enough to withstand various economic environments. 

When you understand both the technical aspects of inflation and the emotional concerns it raises, financial planning becomes more effective and provides greater peace of mind. This approach allows you to focus on enjoying retirement rather than worrying about every economic headline. 

To talk to an advisor about protecting yourself against inflation in retirement, reach out using the form below.   

Contributing sources & influences:

• The University of Michigan’s Health and Retirement Study
• Michael Stein’s book, “The Prosperous Retirement”
• David Blanchett’s concept of the “Retirement Spending Smile”