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AUTHOR: R Quinn on 3/30/2026

It’s not hard to find articles about high prices, the burden inflation puts on seniors, those with a so-called fixed income, which is a myth. Virtually no retiree is on a fixed income and the more they depend on Social Security the less so. 

Of course, high inflation, actually any inflation creates financial stress for many retirees, but is it a surprise? Isn’t being aware of and planning for inflation a key part of retirement? Inflation is nearly always with us. 

The highest period of inflation since 1900 was between 1973-1982 where it average 8.7% and hit a peak of 13.5% in 1980. That’s when my mortgage had a 9-3/4% interest rate They were tough times. Remember WIN buttons? 

To my surprise the lowest period was 1920-1929 with an average of 0.0%. No wonder it’s called the roaring twenties. 

While we can’t predict inflation from year to year, it’s a pretty good bet that goods and services, property taxes, etc. will cost more ten years after we retire. 

Many claim Social Security doesn’t keep up with inflation. It does, but it depends. 

The overall inflation rate for 2025 was reported as 2.6%. The 2026 Social security COLA was 2.8% so yes, SS keeps up with inflation. If inflation takes off after September of a year, the COLA may be less. On the other hand, the opposite may happen. 

The important variables are what percentage of total income is Social Security and how close to the CPI is an individual’s inflation rate?

For example, I’m not affected by housing prices, but I am by premiums for Medicare. Indirectly many seniors see rising expenses reflected in property taxes as towns cope with rising prices and wage pressures. 

The CPI-E (Consumer Price Index for Americans 62 Years of Age and Older) has been suggested as a better measure. It is an “experimental” index designed to track the cost of living specifically for seniors.

It differs from the standard CPI-W (used for Social Security COLAs) by giving more weight to the categories where you likely spend more of your budget: healthcare and housing.

Historically, the CPI-E rises about 0.2% faster annually than the CPI-W. This is because medical costs and home heating/shelter—which are weighted more heavily in the CPI-E—tend to outpace general inflation. However, that’s not always true, in some years the CPI-E has been lower. 

Using the CPI-E creates another problem. It accelerates the insolvency of the Social Security trust.

Inflation is real, but erratic. It affects people, especially seniors in different ways – but is is no secret. The 4% “rule” accounts for inflation, most government pensions have COLAs too. 

People thinking about retirement need a plan.

What is your plan?