11 Signs Your Retirement Will Cost More Than You Thought

You Didn’t Take Inflation Into Consideration

When you’re working, you might not feel the impact of inflation if your wages are rising along with prices. So, you might not factor inflation into your retirement savings calculations.

“On average in the USA, we see that the prices of goods and services rise by 3 percent per year,” said Michael Hardy, a certified financial planner and partner with Mollot & Hardy in Amherst, N.Y. “This means that over a 20-year time period, your $100,000 of retirement savings will likely be worth in terms of buying power 60 percent less.”

• What to Do

If you didn’t factor inflation into your retirement calculations, you might have to save more than previously projected, Hardy said. “I find that most people fail to account for this change and it ends up costing them dearly years later.”

In addition to saving more to prepare for inflation, consider delaying Social Security benefits. You can maximize your Social Security benefit by waiting to claim it until age 70. Not only will your monthly check be bigger, but the Social Security Administration’s cost-of-living adjustment — which helps benefits keep up with inflation — will be applied to that bigger payout. “Now a greater proportion of your income will be inflation adjusted,” Littell said.