How Will Inflation Affect Your Retirement?

Chances are, you can remember a time when your trips to the grocery store cost you far less than they do now. Inflation consistently reduces your buying power by increasing the prices of the goods you buy, relative to the dollar. If your retirement income plan doesn't include strategies for increasing your income along with inflation, you could find yourself having to cut back during retirement.

Although inflation rates have varied widely through history, since the great depression there have been very few periods, even on a monthly scale, when we haven't experienced inflation. We can not predict what inflation rates will be in the future, but it is wise to prepare for average inflation, and for the possibility of spikes in inflation.