For many years, Americans thought $1 million would be enough of a nest egg for a comfortable retirement. Now, a recent study has shown this opinion has shifted. According to this new study, many Americans are now anticipating needing $1.25 million in savings to comfortably retire. This figure is up 20 percent from last year alone.

This news doesn’t come as a surprise; the past year has been rife with high inflation and market volatility that impacted everyone.

What is Inflation?

To fully understand the impact it has on retirees, we should first examine what inflation is.

According to this article, inflation is a “quantitative measure of the rate at which the average price level of goods or services increases.” There are many factors that can cause inflation to occur including an increase in production costs, a surge in demand for products and services, and more.

Inflation impacts everyone, but retirees are affected more than the average worker. There are several reasons for this, the most prominent reason being their reliance on a fixed monthly income.

The Impact of Inflation on Retirement

During retirement, many people rely on a fixed monthly income. This income is brought about by a combination of things; typically, this includes Social Security benefit payments as well as a monthly withdrawal from a savings account.

However, as prices increase, the Social Security benefit payments remain the same. This means that retirees are forced to withdraw more from their savings accounts to make up for the higher costs inflation causes. These larger withdrawals cause retirees’ savings to deplete faster than anticipated.

Current Retirees Face Difficult Road

Over the past year, retirees have seen their savings decrease faster than anticipated. To make up for this, Social Security announced a historic cost-of-living-adjustment of 8.7%. But this adjustment doesn’t account for health care expenses, which rise as individuals get older.

Create Change

Senior Security Alliance recognizes the importance of a comfortable retirement. That’s why we’ve made it our mission to help retirees achieve more financial security.

Through our bill, we provide seven essential guarantees. These guarantees range from providing assurance benefits will never be cut to ensuring Social Security is not equated to a welfare program. And rest assured all of these guarantees help provide more financial security for senior citizens.

To learn more about our program, and keep up with our progress, follow us on Facebook and Twitter.