Inflation may no longer be making front-page news, but its aftershocks continue to ripple through retirement budgets across America. Even with a decline from pandemic-era peaks, everyday prices for essentials – such as food, housing, and healthcare – remain stubbornly elevated.

According to a recent U.S. Retirement Survey by Schroders, 92% of retirees express concern about shrinking asset values and the diminishing purchasing power of their fixed incomes.

The Lingering Effects of Inflation

Although inflation has cooled from the alarming levels of 2022–2023, the “new normal” in prices is considerably higher than it was just a few years ago. Retirees on fixed incomes are hit particularly hard. A dollar saved in 2019 simply doesn’t buy the same basket of goods in 2025.

Medicare premiums, insurance costs, and long-term care expenses have all outpaced Social Security COLA increases in real terms, creating what economists call “stealth inflation.”

Protecting Purchasing Power

Here are some strategies to help maintain your standard of living:

  • Reassess Withdrawal Strategies
    Instead of a flat 4% rule, consider dynamic withdrawal strategies that adapt to market conditions and inflationary pressure. This may help preserve assets while allowing for periodic income increases.
  • Inflation-Protected Investments
    TIPS (Treasury Inflation-Protected Securities), real assets like commodities and real estate investment trusts (REITs), and dividend-growth stocks can offer a buffer against inflation.
  • Annuities with COLA Adjustments
    For those seeking guaranteed income, annuities with built-in inflation adjustments offer peace of mind, though they come with trade-offs that need careful consideration.
  • Budget Realignment
    Revisit discretionary spending and focus on essential categories. Working with a financial advisor can help uncover hidden cost savings and optimize cash flow.

Emotional Resilience and Financial Discipline

Inflation can induce anxiety and lead to rash financial decisions. Retirees need both a practical plan and emotional resilience.

A comprehensive financial review can help clarify where you stand, assess portfolio longevity under different inflation scenarios, and identify changes that preserve quality of life.

Disclosure
Ethos Capital Advisors, LLC (“ECA”) is an independent financial services firm helping individuals create retirement strategies to custom suit their needs and objectives. Insurance products and services are offered, and sold, through individually licensed and appointed agents in all appropriate jurisdictions.
This content is provided for educational purposes only. Commentary should not be regarded as a complete analysis of the subjects discussed and should not be relied upon for entering into any transaction, advisory relationship, or making any investment decision.   The information presented does not involve the rendering of personalized investment advice and should not be viewed as an offer to buy or sell any securities.
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