It's hardly a secret that inflation has been wreaking havoc on consumers for well over a year. And while the Federal Reserve is doing its best to combat inflation by hiking up interest rates aggressively, we don't know when the cost of living will start to come back down.

As such, these days, many people are having a hard time making ends meet, and that extends to retirees on a fixed income. In fact, many seniors get the bulk of their retirement income from Social Security. And while those benefits did get a 5.9% cost-of-living adjustment going into 2022, the rate of inflation has well outpaced that boost, leaving seniors at a clear disadvantage.

A person with a serious expression holding documents.

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It's not surprising, then, to learn that 66% of retirement savers aged 45 and over are worried about the effect of inflation on their retirement, according to a recent Nationwide survey. If you're scared that rising living costs will leave you cash-strapped as a senior, there's one important move it pays to make.

Build a solid nest egg and invest it aggressively

Social Security has historically done a poor job of helping seniors keep up with rising living costs. Besides, those benefits were never meant to replace retirees' former earnings in full. So if you want to reduce the chances of inflation messing with your retirement, then your best bet is to set yourself up with another income stream that's better equipped to battle it. That's where your nest egg comes in.

If you make it a point to consistently sock away money in an IRA or 401(k) plan throughout your working years, you'll have added income to tap at a time when your Social Security benefits may not hold up. But it's not enough to simply save money in a retirement plan and call it a day. You'll also need to invest that money so it grows in a manner that outpaces inflation.

For the most part, that means going heavy on stocks until retirement is near, at which point it pays to start shifting over to less volatile assets, like bonds, so you're not taking on undue risk. But let's say you manage to sock away $400 a month for retirement over a 40-year period. If you go heavy on stocks, you might manage to generate an average annual 8% return in your retirement plan, since that's a bit below the stock market's average. All told, that would leave you with a balance of $1.24 million.

Now a quick note on that 8% return: This year, that sort of return wouldn't necessarily be enough to outpace inflation. But in most years, it would be. The rate of inflation in 2022 has been truly exceptional -- and not in a good way.

A good way to ease your concerns

Rising living costs can easily erode seniors' income, leaving them cash-strapped and stressed. If that's a scenario you want to avoid, make it a point to fund your own nest egg and invest it in a manner that leaves inflation in the dust.