Is Your Retirement Income Keeping Up With Inflation?

If you have been retired for a few years, you've probably settled into a comfortable rhythm with your finances. Your monthly withdrawals feel steady, your bills are paid, and on paper, everything adds up.

Consider this: does your income still buy what it used to? Inflation works quietly in the background, and over time, even a modest rise in the cost of everyday goods and services can chip away at the lifestyle you worked so hard to build.

What a Purchasing Power Check-Up Looks Like

Think of a purchasing power check-up as a simple gut-check against your own spending, not a complicated financial exercise. Start by pulling up your monthly budget from two or three years ago and comparing it to what you spend today. Are your grocery bills noticeably higher? Have your insurance premiums gone up? What about utilities, medications, or dining out? The U.S. Bureau of Labor Statistics says that everyday costs rose more than 20% between 2020 and 2024, with categories that matter most to retirees, such as housing, food, and healthcare climbing even faster.¹

If your withdrawals have stayed the same over that period, your real purchasing power has gone down even though the dollar amount hasn't changed. The goal of a check-up is simply to see whether your income has kept up. If it has not, there could be adjustments worth exploring.

Practical Ways to Help Protect What You Have

The good news is that purchasing power is something you can manage with planning. A few strategies are worth discussing with your financial professional:

• Review your withdrawal rate. Many retirees use a fixed percentage, but checking that number from time to time can help you adjust withdrawals to match actual living costs.
• Look at income sources with built-in growth. Social Security includes an annual cost-of-living adjustment (COLA), which was 2.5% for 2025.² These adjustments can make a real difference in the long run.
• Consider your portfolio's inflation sensitivity. Certain assets have historically helped offset the effects of rising prices. However, past performance doesn't indicate future results and no investment strategy can ensure success. Your financial professional can give you advice on how your current mix may need to adjust over time.

Small Shifts Can Make a Big Difference 

It is easy to assume that small price increases in any one category are too minor to worry about. But because retirement can span 20 to 30 years or more, even a 3% annual inflation rate could roughly double the cost of living over 24 years. That context is not meant to alarm you. It is a reminder that a brief annual review of your income and spending is one of the easiest, most useful steps you can take to preserve the retirement you planned.

Staying ahead of inflation may not require a complete overhaul of your finances. It starts with awareness. A conversation with your financial professional can help you see the full picture clearly and make adjustments as needed.

If you would like to learn more about preserving your purchasing power, contact the office to schedule a time to talk.

^{1 U.S. Bureau of Labor Statistics. "Consumer Price Index Historical Tables for U.S. City Average." Updated 2026. BLS.gov, https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm.}

^{2 Social Security Administration. "Cost-of-Living Adjustment (COLA) Information." 2025. SSA.gov, https://www.ssa.gov/cola/.}