Can I Still Retire?
For nearly three decades, most Americans lived in an environment where inflation felt more like a textbook concept than a real-life threat. Prices crept upward, but rarely enough to cause concern. From the early 1990s through 2020, inflation was generally modest, and many people never experienced what sustained increases in the cost of living could do to their purchasing power.
As financial advisors, inflation was always one of the risks we talked about most—yet it was often the one people took least seriously.
We would ask clients to imagine spending $100 at the grocery store today and then consider what that same $100 might buy 10, 20, or even 30 years into retirement. The lesson was simple: if your income stays relatively fixed while prices continue to rise, your standard of living can slowly erode over time.
Today, that lesson feels a lot more real.
Food prices surged 11.4% in 2022, followed by another 5.0% increase in 2023. While grocery inflation slowed significantly to 1.2% in 2024, prices remain substantially higher than they were just a few years ago. In fact, food-at-home prices are roughly 18% higher than they were at the beginning of 2022.1
The Grocery Store Reality Check
Imagine you retired at the end of 2021 with a weekly grocery budget of $100. By the end of 2022, that same basket of groceries would have cost about $111. By the end of 2023, it would have cost nearly $117. Even with inflation cooling in 2024, your grocery bill would still be around $118 for the same items that cost $100 when you retired.
In other words, your original $100 grocery budget now buys about 85 cents worth of purchasing power compared to when you first retired. And that’s only after three years.
Now imagine what happens over a retirement that could last 20, 30, or even 40 years. This is why so many Americans are asking: Can I still retire?
Maybe the Better Question Is…
How can I still retire?
The good news is that retirement is still achievable for many people. In fact, we’ve helped numerous families create successful retirement strategies despite inflation, market volatility, tax uncertainty, and rising healthcare costs.
The key is addressing these challenges sooner rather than later. Time matters.
Every year you delay planning is another year inflation can work against you instead of allowing you the opportunity to prepare for it. The earlier you begin building a strategy, the more options you’ll likely have available.
Questions Every Future Retiree Should Ask
A strong retirement plan should address more than investment returns. Here are some important questions to discuss with your financial advisor:
- Am I holding too much cash that may be losing purchasing power?
- Am I saving enough to support my desired lifestyle?
- How much of my retirement income will be fixed and unable to keep pace with inflation?
- What happens if tax rates increase in the future?
- How would potential changes to Social Security affect my plan?
- How can I prepare for rising healthcare and long-term care expenses?
- What happens financially if one spouse dies unexpectedly?
- How long should my retirement plan be designed to last?
- Could financial assistance to children or grandchildren jeopardize my retirement security?
- Am I overlooking risks that could derail my plan?
- How can I make every dollar work as efficiently as possible, both now and later in retirement?
- What is my backup plan if things don’t go according to expectations?
The “Two Dollar Tree” Lesson
Not long ago, I saw a joke online that said: “Coming soon: The Two Dollar Tree.”
It’s funny because there’s a lot of truth behind it. Think about it—how many things can you still buy for a dollar? The lesson is simple: inflation is real, and it doesn’t take a break simply because you’ve stopped working. The longer you ignore it, the fewer options you may have to combat it. But there is good news.
A successful retirement is still possible.
It starts with a plan. It starts with understanding the risks. And most importantly, it starts with taking action today rather than waiting for tomorrow. Because while inflation may be unavoidable, being unprepared for it doesn’t have to be.