5 Ways To Protect Yourself From Inflation In Retirement

inflation retirement dollars

Imagine retiring and then finding out that you don’t quite have enough to last all the way through. You have as much saved up as you planned, but you don’t seem to have as much buying power as you thought. What happened?

Inflation is the gradual increase in prices and the decrease in the value of money. What used to cost $1.00 might cost $1.05 in the future. To put it another way, you will have less buying power even though your account still reads the same dollar amount.

Because of this, the effects of inflation can be hard to see directly. Inflation happens gradually and is hard to notice short term, but it has devastating effects on your retirement. Those who ignore inflation are often unpleasantly surprised when it comes time to actually retire.

Don’t panic, there are things you can do to mitigate inflation and even beat it. Investing in assets that hold their value independent of inflation will help secure your retirement while everyone else is losing money.

Here are the best assets for protecting your retirement from inflation.

Treasury Inflation-Protected Securities (TIPS)

First on our list is TIPS. TIPS bonds are designed for the specific purpose of protecting you against inflation by being tied to the Consumer Price Index.

The return on TIPS bonds will match the rate of inflation. If inflation is 2%, your return will be 2%. Because they only match inflation, don’t expect these to make money for you. They are only a reliable means of protecting yourself from inflation.

In addition to inflation, TIPS also work to protect your investment from deflation. When the bonds mature you are allowed to take either the original principle, or the adjusted principle, whichever is greater.

TIPS bonds are very secure. They are backed by the federal government so there is very little risk involved with them, just don’t expect to make a substantial profit with them. If you want to add some protection to your retirement and don’t need large returns, TIPS might be the way to go.


Stocks are substantially more risky than TIPS. Unlike bonds, there is no government guarantee that you will get the payout you want. The value of stocks is determined by the market.

This extra risk is justified by the fact that they have the ability to beat inflation in normal situations.

If you aren’t confident that you can pick out stocks that are likely to perform well, you can rest easy because you don’t have to. You can buy index funds which track the market as a whole, or just track a segment of it like the S&P 500.

Investing in an index funds mitigates some of the risk of buying stocks because the risk is spread over many individual stocks. Even if some individual stocks aren’t doing well, your index fund will perform well as long as the market in general is growing.

An added benefit is that many index funds pay out dividends. Not only will you get the value of the appreciating asset, but you will receive extra in the form of dividends which you can reinvest.

Commercial Real Estate

Real estate has a strong record of beating inflation, and often moves in the opposite direction of stocks. If stocks lose value, real estate is likely performing well.

If you have the funds for it, you could buy real estate in cash. Look for areas with new construction in safe neighborhoods to be safe. You can hire a property manager to take care of the property for you.

Don’t want to purchase real estate in cash but still want real estate in your portfolio? You can invest in REITs, or real estate investment trusts.

REITs are a security that invests in real estate and trades on major exchanges. Think of them as mutual funds for real estate.

They give investors the benefits of real estate without as much commitment as they are much more liquid. REITs have their own tax considerations and yield high dividends.


Commodities can be a solid investment to hedge against inflation. Commodities are basic goods like oil, minerals, and agricultural products.

Inflation causes the price of commodities to rise, so investing in them offers protection. You can purchase commodities through an ETF or a mutual fund.

The commodities market is considered to be volatile, so be sure to protect yourself by diversifying and investing in a wide range of commodities.

Inflation is not the only factor that determines the price of commodities. For example, supply and demand play a large role in their price.

Precious Metals IRA

Gold, and other precious metals, are the “go to” investment to protect your retirement from inflation. Gold has been known to hold its value as an asset independent of market conditions.

People often turn to gold during economic uncertainty. By investing in precious metals early you will be ahead of the curve and get the best return on investment.

It’s possible to invest in “paper” gold through ETFs and mutual funds, however, the absolute best way to protect your retirement is to buy physical gold.

The best and easiest way to own physical gold is to open what’s called a Precious Metals IRA, also known as a Gold IRA.

With a Precious Metals IRA you actually own the physical gold, so you are not only protected against inflation but also have the peace of mind that your investment will never just disappear.

There is simply no better way to protect your retirement.

You are allowed to have gold, silver, platinum, and palladium. Investing in some combination of those four will give you even more protection. If you want to start a Gold IRA with funds from a different account by doing a rollover.

We recommend going through 1, a trusted authority in the precious metals market.

They make it easy to get started. Their expert advisers will walk you through the entire process step by step and will answer any questions you have without pressuring you.

One comment

  • So with TIPS, the government creates inflation by making money appear out of thin air on bankers’ balance sheets, then get to borrow your money for free, only giving you protection against the damage they are doing to your savings by causing inflation? What a racket. Maybe they’ll make sure no one burns down the store if you pay them protection money.

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