Factoring Inflation into your Retirement Plan

by | Aug 27, 2025 | Established Professionals, Financial Planning, Integras Insights, Retirement

Inflation is one of the major risks to retirement. We’re all living longer, and the things we spend more of our money on in our older years (healthcare, senior housing) have the biggest price increases.

The recent inflationary environment is fresh in everyone’s mind, but even 2% inflation (the Fed’s current goal) is a risk to a retiree’s spending power over time. In a simple example, a $100,000 lifestyle when you initially retire would cost you over $148,000 in 20 years, assuming prices rose at a constant rate of 2%.

Investment Allocation: Investing too conservatively may mean that your investments won’t meet your spending needs long term. You want to make sure that you have enough invested for growth to keep up with inflation. This is not a static allocation. Integras Partners’ investment strategies are designed to align with anticipated inflation-adjusted spending needs over time.

Investment Selection: Investment selection within your portfolio is also a consideration. For example, there are types of investments that typically keep ahead of inflation, such as companies with a history of dividend growth and real estate.

Social Security Claiming Strategies: Delaying social security can give you higher lifetime benefits, but factors such as health and longevity must also be considered.

Strategies to Offset Healthcare Costs: Healthcare costs can be significant at older ages, and costs inflate at higher rates than other spending categories. Evaluate long-term care insurance or how to best make use of an HSA.

Withdrawal Strategies: Withdrawing too much in early retirement years, or having to sell assets to meet withdrawals during down markets are major risks to the longevity of a portfolio. Dedicate a portion of investments to near-term spending needs using relatively conservative, liquid investments. Drawing from that portion of the portfolio allows longer-term assets to remain invested for growth (to keep up with inflation), with the time needed to recover from market downturns.

Learn more about Integras Partners’ investment strategies, designed to align investments with your withdrawal strategy.

You might also like…

Tax Deferred Exchanges with UPREIT Programs

Tax Deferred Exchanges with UPREIT Programs

If you sell an investment property like a rental home or other piece of commercial real estate, you will owe taxes on the gain. Between capital gains tax and depreciation recapture, a taxpayer could pay more than 1/3 of their gain in taxes. Many investors turn to DST...

read more
Deferring Tax on the Sale of Investment Property

Deferring Tax on the Sale of Investment Property

If you sell an investment property like a rental home or other piece of commercial real estate, you will owe taxes on the gain. Between capital gains tax and depreciation recapture, a taxpayer could pay more than 1/3 of their gain in taxes. Many people aren’t aware...

read more
Young Professionals: Establish Healthy Investing Habits

Young Professionals: Establish Healthy Investing Habits

Meet Megan. She’s in her early 30s, single, and fairly stable in her career, although she may change employers. Like most younger professionals we work with, Megan was unsure how to get started. She had a couple of previous company retirement accounts and a Roth IRA...

read more