How Inflation Affects Your Retirement

The Math Is Alarming

At 3% average inflation, something that costs $1,000 today will cost $1,344 in 10 years, $1,806 in 20 years, and $2,427 in 30 years. If your retirement income stays flat, your purchasing power erodes every single year.

For a retiree spending $5,000/month today, they'll need $6,720/month in 10 years to maintain the same lifestyle. That's an extra $20,640/year — and it only gets worse as you age.

Social Security Has a Built-In Hedge

Social Security benefits include annual Cost of Living Adjustments (COLAs) tied to inflation. This is one of the most valuable features of Social Security and a major reason to consider delaying your claim — a larger base benefit means larger COLA increases in dollar terms.

How Annuities Can Help

While standard fixed annuity payments don't increase with inflation, there are strategies to address this. An annuity ladder — purchasing annuities at different times — creates naturally increasing income as newer annuities typically offer higher payments. Some income riders also include annual increases of 1-3% per year.

The ACM Approach

We build inflation into every retirement income plan we create. We don't just look at what you need today — we project what you'll need in 10, 20, and 30 years. Then we structure your income sources to keep pace.