Inflation And Retirement: Steps To Lessen Inflation Impact
High inflation is here. The combination of unprecedented stimulus in the wake of the pandemic combined with the supply chain fiascos and inconsistency in COVID policies across the globe and ongoing war, we need to prepare for it to potentially take time for inflation to come back down. While inflation impacts everyone, it impacts retirees and those nearing retirement in a different way than it impacts people that have many years left of riding out a volatile market.
For example, in May of 2022 Social Security raised the cost of living for their benefits by 5.9%, while inflation at that point in the year was 8.6%. Many retirees utilize Social Security as their only form of income, other than their savings or retirement accounts, so when an increase in cost of living isn’t keeping up with inflation it disproportionately impacts this segment of society. The news isn’t all bad for retirees when it comes to inflation and their retirement.