5 Ways Inflation Is Quietly Stealing $200K From Your Retirement
Written by
Chris Adam
Edited by
Zuri Anderson
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You’ve no doubt felt the impact of inflation at the grocery store. But you may be surprised by how much inflation can steal from your retirement savings.
“Inflation usually shows up quietly, and that’s what makes it so dangerous for retirement planning,” said Taylor Kovar, certified financial planner (CFP) and CEO of 11 Financial. “When prices rise a few percent each year, the impact doesn’t feel huge in the moment, but over a decade, it completely shifts what your money can cover.”
Here’s a look at five ways inflation may be quietly stealing $150,000 to $200,000 from your retirement.
Everyday Spending Requires More Income
Groceries cost more. According to Melanie Musson, a finance expert with Quote.com, “If the cost of groceries in a month is $30 more than last year, that may not seem like a big deal, but over the course of three years, similar increases mean you’re spending almost $100 more per month. That starts to feel significant.”
Musson noted that $100 could have been used toward retirement contributions. But in addition to not being able to put that toward investments, you also have to consider that groceries will cost you more when you retire, so what you have saved will not go nearly as far when you retire as it would go today.
Healthcare Costs Rise Faster Than Everything Else
Healthcare often inflates at 5% to 6% a year.
“A retiree paying $7,000 annually for premiums today could face $13,000 to $14,000 within 12 years,” said Christopher Stroup, founder and president of Silicon Beach Financial. “That increase alone can cost an extra $70,000 to $80,000 over a typical retirement — money many people never plan for.”
Long-Term Care Becomes Significantly More Expensive
According to Stroup, long-term care costs rise about 5% each year. A $100,000 nursing care stay today can climb to $165,000 in just ten years. Couples planning for two potential care needs may face an unexpected six-figure gap without proactive planning.
Travel and Leisure Become Less Affordable
“The average retiree spends $7,000 to $10,000 annually on travel. With 3% to 4% inflation, that same amount could exceed $12,000 within a decade,” Stroup said. “That $2,000 to $4,000 increase each year forces retirees to choose between scaling back experiences or drawing down savings faster.”
Housing and Maintenance Costs Increase Over Time
Even if your mortgage is paid off, property taxes, insurance and home repairs rise steadily.
A typical $6,000 annual maintenance budget can easily reach $9,000 in 15 years, Stroup noted. That additional $45,000 in cumulative expenses slowly erodes retirement savings meant for other priorities.
When you add up all these “quiet” ways inflation is stealing from your retirement, Kovar noted it can easily total $150,000 to $200,000.
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