Retirement Answer Man

Welcome to the last episode in the 4 part series on inflation in retirement. If you are just now joining in, consider heading over to the first episode in this series which covers what inflation is and how to measure it. The second installment discusses the ways that inflation impacts retirement and the previous episode helped you build a framework for combating inflation in your retirement plan. 

I create these deep-dive series as a way to sharpen my own skills as a financial advisor and to refresh my thinking on a topic. The order of the episodes allows me to think through a subject in an organized way. This is why I encourage you to listen to the series in order so that you can understand the progression of the subject at hand. Press play now if you have already listened to the preceding episodes so that you can learn the tactical ways to fight inflation in your retirement plan. 

Strategy vs. tactics

Before we dive into the tactical ways to fight inflation, it is important to understand the difference between strategy and tactics. A strategy is a framework for how you achieve a long-term goal. Tactics are the smaller steps that have a shorter time frame. Unlike strategy, tactics are easily started and discarded. They are a means to an end that complement and enhance the strategy. 

Your overall long-term goal is rocking retirement, and hopefully, after the last episode, you have begun to create your strategy to combat inflation so that you can rock retirement. Listen in to learn tactical measures that will enhance that strategy. 

The current tactical situation regarding inflation

We are all wondering where this inflation is taking us. Are we experiencing a monumental shift away from the low inflation and low-interest rates of the past 20 years? At this point, we can’t say for certain that inflation is here to stay, but we can analyze the current situation. 

In January, we experienced 7.5% inflation. If this trend continues, we will see rising interest rates as a result. Rising interest rates can lead to changes in the financial dynamics across the board. Bond and money market rates will rise, but on the flip side, the cost of borrowing money will rise as well. Rising inflation has a financial impact on every part of the economy and we will see a shift of capital across the world. 

It is important to understand that we don’t know for certain what will happen in the future. All we can do is educate ourselves and have a sound strategy in place.

Tactics to use if rising inflation becomes the new trend

If inflation continues to rise there are many ways that you can adjust your tactics in line with your overall retirement strategy. 

  • Buy I bonds - These bonds adjust the amount of interest-based on inflation to preserve the purchasing power of the dollar over time
  • Check out Treasury inflation-protected securities (TIPS)- TIPS are more like a traditional treasury bond. They adjust the principal balance of the bond based on an inflation factor to achieve the same goal. The price fluctuates based on interest rates and other factors.
  • Hold money market funds - Hold more money market and cash assets. As interest rates rise you can lock in at higher interest rates. 
  • Use more debt to buy things - take advantage of the current low-interest rates to purchase things that are likely to rise in price in the future
  • Buy in bulk - Buy at today’s prices rather than tomorrow’s. 
  • Change jobs - The labor market is tight right now and wages have not kept up. This means that companies are starting to bid up.
  • Invest - Investing in real estate, companies with pricing power, and commodities have historically been a good idea during times of inflation.

Although there are many tactics you can use to fight inflation risk, it is important to do so with a sound strategy in place. Listen in to hear why you shouldn’t take extreme measures to tackle inflation.



  • [4:20] Coming next month…
  • [6:30] Where to go if you can’t afford a full-time financial advisor
  • [8:42] Strategy vs. tactics
  • [12:38] What is the current tactical situation regarding inflation?
  • [20:20] Tactics to use if rising inflation is the new trend
  • [26:55] What I am doing tactically to fight inflation


  • [35:05] How retirement calculators treat inflation
  • [39:34] What else inflates in retirement?


  • [43:05] Define the guardrails for your tactics

Resources Mentioned In This Episode

Check out the Stacking Benjamins book tour–I’ll be at the Dallas event with Joe Saul-Sehy on March 1

Episode 417 with Joe Saul-Sehy

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM423.mp3
Category:general -- posted at: 8:11am CDT

Inflation will affect your retirement one way or another. It’s up to you to create a strategy to manage that risk. On this episode of Retirement Answer Man, you’ll learn how you can build your own strategy to deal with the creeping risk of inflation.

In the past two episodes, you learned what inflation is and how it can affect your retirement. Next week you’ll learn how to use tactics to tweak your strategy to optimize it for specific situations, but first, let’s go learn how to come up with your own plan to combat inflation. 

Data vs noise

It is important to understand the difference between noise and signals when coming up with a strategy. It’s easy to be distracted by the everyday noise that surrounds us and fail to heed the signals that we should actually be watching for. 

In today’s overly connected world, we have access to information that is being transmitted instantly. Rather than learning from the signals that can help us create a course of action, we get distracted by the constant noise. As data flow increases, we tend to get overloaded with information. 

According to Nassim Taleb in his book, Antifragile, data is toxic in large and even moderate quantities because it increases our tendency to overreact to the noise. This is an important factor to recognize when coming up with a risk management strategy which is what a retirement plan really is. 

Strategies start with vision

Coming up with a strategy for retirement planning is like checking a recipe before you go to the grocery store. You want to make sure that you have all the ingredients so that you can put them together in the correct portions to create a meal. If you don’t plan before your trip to the supermarket you could come home with plenty of food but nothing that will help you prepare a healthy meal. To ensure a healthy retirement, make sure that your retirement starts with your vision for life.

How to create a strategy to manage inflation

Now you understand that you need to have a goal in mind before you create a retirement strategy. The two risks that you must balance in retirement are sequence of return risk and inflation risk. Sequence of return risk is a near-term risk that occurs when your stocks go down in value shortly after you begin withdrawing from your accounts. The risk of inflation means that the value of your dollar decreases over a longer period of time. 

Your retirement strategy needs to balance these near-term and long-term risks. Listen in to hear how you can manage inflation risk while at the same time considering sequence of return risk.

If some of the terminology I use confuses you, make sure to listen in the month of March. I plan to explain the fundamentals of retirement planning in greater detail. You’ll learn about the pie cake, agile retirement planning, and the retirement plan of record.



  • [3:29] Noise vs. signals
  • [5:35] What is a strategy?
  • [12:57] How to create a strategy to manage inflation


  • [20:40] Learning from Donald’s retirement plans
  • [25:46] What happened to Donald’s wife
  • [29:15] How Donald’s perspective has changed
  • [33:08] How Donald’s financial plans have changed
  • [35:20] Use the technology you have to record your loved ones


  • [36:47] Evaluate your reaction to inflation

Resources Mentioned In This Episode

LTCI Partners

WSJ article - The Trouble with a Stock Market Bubble by Jason Zweig

FILM - The Social Dilemma

BOOK - Antifragile by Nassim Taleb

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM422.mp3
Category:general -- posted at: 2:00am CDT

Inflation is on everyone’s mind these days. If you have been wondering how inflation will affect your retirement, you’ve come to the right place.

This is the 2nd episode in a 4 part series on inflation. Last week we defined inflation, today, we’re discussing the impact of inflation on retirement, next week we get strategic, and in the final episode, we’ll get tactical and answer your questions on inflation.

Press play to learn what you need to know about the effects of inflation on your retirement. 

Just choose a number

Inflation is nothing new. It has been affecting us over the course of our entire lives. This is important to remember when planning retirement so that you don’t overthink how you plan for inflation as you build your retirement plan of record.

When building your retirement planning model, you’ll need to assume some number to plan for inflation. This number can be chosen based on history or another method. You don’t need to worry too much about where the number comes from as long as you’ve done a bit of research to get it. The most important thing to remember when choosing a number to assume for inflation is to leave it alone.

It’s important to stay agile

You’ll be consistently iterating and tweaking your retirement plan of record as your lifestyle changes from year to year. Even though inflation rates will fluctuate over the course of your retirement, leave your assumed inflation estimate alone.

You won’t get any more accuracy from your model by tinkering with this number. Instead, you’ll end up tilting the numbers one way or another based on your proximity bias. Iterate based on the reality of your lifestyle rather than some projected assumption. Let your spending habits change based on your life choices. 

How does inflation impact your retirement?

The best way to understand how inflation can impact someone over time is to crunch the numbers. 

If you spend $9,000 per month today and assume a 3% inflation rate, in 15 years your standard of living will decrease by 36%. If you change the inflation rate to 7%, the standard of living will worsen by 64%.

Although these numbers can seem scary, you will have a bit of optionality in the way you spend your money. If inflation is high, you may choose to scale back your spending in many areas. 

Areas where you can’t scale back

There are a couple of areas in life where you won’t be able to scale back spending. A healthcare event is not a choice and will need to be cared for whether you are ready or not.

Unfortunately, due to the healthcare renaissance in medical technology, inflation in the medical field has risen by 3 times the average of other goods and services. Healthcare and long-term care are two areas that have higher than average inflation and you have little control over your need for them.

Even though inflation will cause prices to rise, you will have a safety feature built into your retirement by way of social capital. Social Security has a cost of living adjustment built into the system based on CPI-W. Listen in to hear how these adjustments in addition to your human capital can help you combat inflation in your retirement. 



  • [3:30] Be careful with your assumptions
  • [10:01] How does inflation impact your retirement?
  • [21:48] How stocks and bonds react to inflation


  • [28:40] How Frank can decide if he can continue with his early retirement
  • [35:20] Where can someone with modest means go for retirement advice?
  • [40:02] What is the role of bond funds in a retirement portfolio with a low-interest rate environment?
  • [47:28] Clarification on signature requirements for IRAs


  • [51:17] Review your inflation assumptions

Resources Mentioned In This Episode

Episode 405 - Don’t Let Perfect Be the Enemy of Good

Lutheran Social Services Financial Services


Align Financial

BOOK - So Good They Can’t Ignore You by Cal Newport

BOOK - The Good Entrepreneur by Nick Kennedy

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM421.mp3
Category:general -- posted at: 4:56am CDT

Inflation is quite the buzzword lately. Every news network reports that inflation is on the rise which is apparent at the grocery store, the car dealerships, and even in the housing market. If you are planning on retiring soon, worries about inflation could keep you up at night. This is why over the next 4 weeks, we are going to study how to manage inflation in retirement. 

Today you’ll learn what inflation is and how it is measured. In week two of this series, we’ll discuss how inflation affects retirement, the following episode will study how to manage inflation from a strategic level, and our last episode on this topic will explore the investment vehicles that are available to help protect our portfolios against inflation. 

What is inflation?

Everywhere you look you can see that inflation is on the rise which is why we are studying this topic in depth. Before we can learn how to battle it, we must first understand what it is.

Inflation is the decline of purchasing power of a particular currency over time. This means that over time, your dollar will buy less of a particular good or service. 

We often reflect on the good ole days when a gallon of gas was less than a dollar, but we can see how inflation occurs across the board. Today a gallon of milk costs $3.59, but in 1995 it cost $2.50. A dozen eggs are $2.80 today, whereas, in 1990, that same dozen was only $1. This is inflation.

The way we see inflation from a retirement perspective is that the purchasing power of your dollar buys less over time. 

A look at average historical inflation rates

Since the 1920s, the average rate of inflation has been 2.88%. However, this does not mean that each year the inflation rate has been the same inflation fluctuates from year to year. The highest inflation rate was in the 80s and was 15.61%. 

In the past 20 years, the inflation rate has been lower than that 100-year average at 2.06%. Over the past 10 years, we really haven’t worried about inflation and we have had the added benefit of enjoying excellent return rates from the market, so if you retired in 2011, there hasn’t been much to worry about. But this isn’t always the case. 

In the 1970s, inflation was at 7% per year which was coupled with a rough decade in investment returns, this perfect storm could cripple retirements. Inflation risk can be compared to sequence of return risk as you enter into retirement. 

How inflation affects retirement planning

When you are planning your retirement you want to understand how much things cost so that you can predict how much money you will need each year. If you spend $9000 per month now, in 20 years you’ll need much more to have that same purchasing power. 

No one can predict what will happen in the future, but if you study the past and take measures to protect your portfolio, you can hedge against this ever-present risk. Learn how inflation is measured why that is important to plan your retirement on this episode of Retirement Answer Man.



  • [5:00] What is inflation?
  • [12:10] How inflation affects retirement planning
  • [13:46] What causes inflation?
  • [19:00] How do we measure inflation?


  • [26:30] Is it better to do a Roth conversion or take advantage of a 0% capital gains tax rate?
  • [34:55] The difference between Roth conversions and Roth contributions
  • [39:59] How to adjust the Social Security calculator for early retirement
  • [46:45] Is inflation risk higher when one retires early?


  • [56:55] Think about your optimization to see if you have enough slack in your system

Resources Mentioned In This Episode

Taxes in Retirement Facebook group with Andy Panko

Tenon Financial Group

LTCI Partners

Watch the Retirement Plan Live replay here!

BOOK - Antifragile by Nassim Nicholas Taleb

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM420.mp3
Category:general -- posted at: 8:17am CDT