One Question Can Make or Break Your Retirement. Most People Never Think to Ask It.

By Selena Maranjian – Mar 29, 2026 at 3:55AM ESTKey PointsInflation eats away at our purchasing power slowly.Over time, the effect of inflation can be massive and destructive.So plan for inflation effectively.As you plan, save, and invest for your retirement, ask yourself: "Am I factoring inflation into my plan?" It's critical to consider inflation, because even when it seems moderate, it can wreak havoc on your wealth over time. For example, the long-term average inflation rate is around 3%. If your portfolio is worth $100,000, one year of 3% inflation will leave it with only $97,000 of purchasing power, roughly. Image source: Getty Images. Now imagine what 25 years of 3% inflation can do to your nest egg. If you retire with $1 million after 25 years, the purchasing power of those dollars may only be around $500,000. So a car that would cost you $25,000 today might cost you $50,000 in 25 years. A burger that might cost you $15 today in a restaurant might cost you $30. A home insurance policy that costs $1,500 today might cost $3,000. Note, too, that inflation is rarely exactly average. In some years, it can be quite high. It was 8% in 2022, for example, and 4.7% in 2021. 2015 saw a rate of just 0.1%, and in 1979, it was 11.3%. What to do about inflation A good rule of thumb is to hope for the best but prepare for the worst. So plan and save and invest, but aim to amass more than you originally planned to. Here are some more strategies to consider: Delay claiming Social Security benefits until age 70, if you can. That will maximize your checks and will also maximize your annual cost-of-living adjustments (COLAs). Don't be too conservative with your investments. In retirement, it could be too risky to be 100% in the stock market, but moving all your money into interest-bearing accounts might mean they grow at a slower rate than inflation. Come up with an asset allocation you're comfortable with. Consider favoring healthy and growing dividend-paying stocks, as their dividends (which will often increase over time) can help you keep up with inflation.Read NextMar 29, 2026 •By Keith SpeightsHas Congress Really Stolen Trillions From Social Security? Here's the TruthMar 29, 2026 •By Maurie BackmanMedicare Advantage Plans: Great Deal or Hidden Risk?Mar 29, 2026 •By Dana GeorgeWhy and How to Consolidate Multiple Retirement AccountsMar 28, 2026 •By Maurie BackmanRoth 401(k) Accounts No Longer Require RMDs -- What That Changes for Your StrategyMar 28, 2026 •By Kailey Hagen, CFPIs Hawaii Really the Worst State to Retire In?Mar 28, 2026 •By Maurie BackmanThe Sneaky Reason Your Medicare Costs Could DoubleAbout the AuthorSelena Maranjian is a contributing personal finance and investing expert at The Motley Fool. Selena has produced The Motley Fool’s nationally syndicated newspaper feature since 1997. She is the author of The Motley Fool Money Guide and Investment Clubs: How to Start and Run One the Motley Fool Way, and the co-author of The Motley Fool Investment Guide for Teens and several editions of The Motley Fool Investment Tax Guide. Prior to The Motley Fool, she worked as a high school teacher and public opinion analyst. She holds a master’s degree in teaching from Brown University and a master’s degree in finance from the Wharton School of the University of Pennsylvania.TMFSelena