Retirement should be the time when you kick back and enjoy the fruits of decades of hard work, but today’s retirees are facing a new kind of challenge: inflation. Prices are going up faster than we’ve seen in years, and it’s not just gas and groceries. The cost of health care, housing and everyday essentials is squeezing budgets at a time when most retirees are relying on fixed incomes. 

If you’re worried about how inflation might impact your retirement, you’re not alone. It’s a concern many retirees share. The good news is there are practical steps you can take to protect your savings and maintain your lifestyle, even as prices rise. Here’s a guide to help you ride the inflation wave and keep your finances afloat.

1. Revisit your budget – and be honest about it

Inflation has a sneaky way of creeping into your budget. Maybe you’ve noticed it at the grocery store, where $50 used to fill your cart, but now it barely covers a few staples. Or perhaps it’s in your utility bills or those pesky healthcare co-pays that seem to inch higher every year.

The first step in combatting inflation is taking a fresh, honest look at your budget. Break down your spending into categories: housing, food, transportation, health care, and discretionary spending like travel or hobbies. See where inflation has hit hardest and where you might need to adjust. 

While it might be tempting to ignore these rising costs, adjusting now could prevent a bigger problem later. Small changes, like cutting back on non-essentials or switching to more affordable alternatives, can keep your savings intact. After all, every dollar counts in retirement.

2. Keep an eye on your investment strategy

When you’re retired, it’s easy to want to shift everything into ultra-safe, low-risk investments like bonds or cash. After all, you don’t want to risk losing what you’ve worked so hard to save. But here’s the thing: Inflation eats away at your purchasing power, and if your money isn’t growing at least as fast as inflation, you’re losing ground.

A balanced investment strategy is key. You don’t need to take on high risk, but keeping a portion of your portfolio in stocks or other growth-oriented assets can help your money keep pace with inflation. 

Consider fixed index annuities, which offer growth potential tied to the stock market’s performance while protecting you from downside risk. These can provide a steady income stream that increases as the market grows, which can be a nice buffer against inflation. But as with any investment, make sure to talk with a financial advisor to ensure it aligns with your overall goals.

3. Delay Social Security if you can

For many retirees, Social Security is a significant part of their retirement income. The good news is that Social Security benefits are adjusted for inflation. The bad news? The annual cost-of-living adjustments (COLAs) often don’t fully keep up with real-life inflation.

One way to make sure you’re getting the most out of Social Security is to delay taking benefits, if possible. Each year you delay past full retirement age (up to age 70), your benefits increase by about 8%. That’s a guaranteed increase that beats inflation almost every time.

If you don’t need the income right away, delaying Social Security can provide a larger monthly check down the road, helping to cushion the impact of rising costs.

4. Consider working part-time or freelancing

If inflation is stretching your budget thin, and you have the energy and desire, working part-time can be a great way to bring in extra income without dipping into your savings. Many retirees find that picking up a part-time job or starting a freelance gig not only helps financially but also keeps them active and engaged.

Whether it’s consulting in your old field, offering your expertise as a part-time advisor or even picking up a seasonal job, earning a little extra can make a big difference, especially when inflation is eating away at your fixed income.

5. Think about downsizing or relocating

Housing is often one of the biggest expenses in retirement, and if inflation is making it harder to cover your costs, it might be time to consider downsizing. Moving to a smaller home or a less expensive area can free up some cash, lower your monthly expenses and make it easier to maintain your lifestyle.

For some, relocating to a state with lower taxes or a smaller cost of living could be a smart move. This doesn’t mean you have to pack up and leave the community you love, but exploring your options could open up new opportunities to stretch your retirement dollars further.

6. Guard against healthcare inflation

Healthcare costs are a big concern for retirees, and inflation isn’t doing us any favors here. Even with Medicare, out-of-pocket costs like co-pays, prescriptions and long-term care can add up. 

Make sure you’re enrolled in the best Medicare plan for your situation. A Medicare Advantage plan might offer more comprehensive coverage at a lower cost, depending on your needs. Also, consider long-term care insurance if you haven’t already. It’s an added expense now, but it could save you from skyrocketing costs down the road.

7. Stay flexible and adapt

Perhaps the most important strategy for riding the inflation wave is staying flexible. Economic conditions change, and your retirement plan should be able to adapt. Be willing to adjust your spending, reconsider your investment strategy or explore new income sources as needed.

While inflation is an inevitable part of the economy, it doesn’t have to derail your retirement. By staying proactive and making smart financial moves, you can protect your savings and enjoy the retirement you’ve worked so hard for — without worrying about how much the price of milk is going to jump next week.

In the end, retirement is a journey, not a destination. And with the right tools, you can ride out the inflation wave and keep moving forward with confidence.

Lyle Boss, endorsed by Glenn Beck as the premier retirement advisor for Utah and the Mountain West States. Boss Financial, 955 Chambers St. Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.