The idea of closing out your career and giving up your steady paycheck can be daunting, no matter the timing of that decision. But if you're gearing up to retire in 2026, you may be particularly worried about inflation.
Not only has inflation been an absolute beast in recent years, but it could get even worse in 2026 if tariffs continue to drive costs upward. That's something you need to prepare for. Here's how.
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1. Delay your Social Security claim
If you're retiring in 2026, you may be making plans to claim Social Security right away. But unless you'll be 70, it could pay to put off that claim and grow your monthly benefits.
You're eligible for your Social Security benefits without a reduction at full retirement age, which is 67 if you were born in 1960 or later. But you get an 8% boost to your monthly benefits for each year you delay your claim beyond full retirement age, up until you turn 70. And that boost could be a crucial weapon in your personal inflation battle.
Also remember that Social Security benefits are eligible for an annual cost-of-living adjustment, or COLA. So the more money you get each month to start out with, the more impactful your future COLAs are likely to be.
2. Invest your savings wisely
A lot of people tend to invest conservatively in retirement because they're afraid of their portfolios losing money. But if you invest too conservatively, your portfolio may not beat inflation over time, causing you to lose out.
A good bet may be to maintain a roughly 50/50 split in your portfolio between stocks and bonds. The bond portion can provide predictable income and stability, while the stock portion could grow at a pace that beats inflation and then some.
If you're worried about keeping a significant portion of your retirement nest egg in stocks, one thing you can do to offset that risk is maintain a savings account or CD ladder with enough cash to cover about two years of living expenses. That way, if the value of your investments falls, you'll buy yourself time to wait out a recovery.
Remember, too, that the stock portion of your portfolio does not have to consist of just volatile growth stocks. You could put some of your money into growth stocks but also load up on dividend stocks or ETFs. Those dividend stocks could not only help you maintain your buying power as costs increase, but also serve as a reasonable hedge against stock market volatility.
3. Continue to work
By the time retirement rolls around, you may be ready to stop working for good. But if you push yourself to hold down a job for even a few hours a week, it could work wonders for your financial situation and give you an edge against inflation.
Remember, once you retire, you may not need to worry about earning a specific paycheck or having to put in a certain number of hours per week to get health benefits from an employer. If you're on Medicare and mostly living off of Social Security and savings, you should have the flexibility to join the gig economy and take a job that not only works for your schedule but is actually enjoyable.
It's natural to worry about inflation eroding your buying power in retirement. But there are also steps you can take to address that concern. By delaying Social Security, investing your money strategically, and generating extra income by working, you can set yourself up to beat inflation -- and avoid some of the financial stress so many seniors inevitably face.
