Re-estimating Retirement in an Age of Inflation

november 18, 2022

With inflation rising, it's time to take another look at your retirement plans.


Planning for retirement can feel overwhelming under normal circumstances but add in inflation—now at roughly 8%, the highest it has been since 19821—and you may feel even more uncertain about your financial future.

If so, you’re not alone. According to a recent survey, 61% of retirement-age investors believe rising inflation combined with today’s relatively low-interest rates will make it difficult for them to create a reliable income stream that will last throughout retirement.2

Some economists believe this as well, although others predict that today’s inflation is temporary and will ease as the supply chain returns to normal.

Either way, costs for everything from gas and groceries to healthcare and travel have increased, which can be especially concerning for those living on a fixed income. That’s why many individuals who had planned to retire in the near term are instead continuing to work.

Whether you’re among them or not, now’s an ideal time to ensure you have enough money to retire.  

Start by asking your financial professional how today’s inflation rate could impact your long-term financial plans. He or she will likely explain that many of the traditional rules and guidelines for investing no longer apply. For example, the common 4% withdrawal rule for those willing to take a “moderate amount of risk” has been cut to 2.4%, according to Professor Wade Pfau and other retirement experts.3

If you’re wondering what’s right for you and how inflation may impact your retirement plans, visit Jackson’s Retirement Income & Expense Calculator to project your future income needs. Then meet with your financial professional to go over your income and expenses and to discuss your retirement plans. Here are some questions you may want to ask: 

  1. Can I still retire by my goal date? If not, how long should I postpone my retirement?  
  2. If I do postpone retirement, how much more will I receive from Social Security?
  3. Should I also reduce how much I spend? If so, by how much?

You may also want to ask your financial professional if, in addition to stocks and bonds, there are other investment vehicles you should consider. For instance, if you purchase an add-on benefit, annuities can help alleviate the risk of inflation by providing long-term, tax-deferred income throughout matter how long it lasts.



Annuities are long-term, tax-deferred vehicles designed for retirement.  Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met. Add-on living benefits are available for an extra charge in addition to the ongoing fees and expenses of the annuity and may be subject to limitations.

Add-on benefits that provide income for the length of the designated life and/or lives may be available for additional charge.  The amount of income that these benefits may provide can vary depending on age, when income is taken, and how many lives are covered when the benefit is elected.  Certain state variations may also apply.  The cost of these benefits may negatively impact the contracts' cash value.


1. "US Inflation Rate by Year from 1926 to 2023", Kimberly Amadeo,, May 2022.

2. “Inflation, Interest Rates Fuel Retirement Income Stream Worries", Lynn Brackpool Giles, 401k Specialist Magazine, April 2022.

3. “Wade Pfau: Pandemic Tears Up 4% Rule,” The American College of Financial Services, April 2020.

All investments contain risk and may lose value.

Annuities are issued by Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and in New York, annuities are issued by Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Variable products are distributed by Jackson National Life Distributors LLC, member FINRA. May not be available in all states and state variations may apply. These products have limitations and restrictions. Contact the Company for more information.

Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company® (Home Office: Lansing, Michigan),  and Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York).