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It’s no surprise that Americans are paying more for their necessities than last year (1).
In response, they are tightening their belts, to the point that a Lightspeed survey found that 1 in 4 consumers will buy only necessities on Black Friday, such as groceries, toiletries, and household essentials (2).
Many American workers also aren’t stretching their dollars further in retirement. Only 55% of adults surveyed by Prudential in 2025 said they had factored inflation into their retirement planning (3).
Despite this lack of planning, 89% of respondents are “highly confident” in covering essential retirement expenses. Prudential referred to this as a “paradox of confidence,” where consumers feel secure without taking appropriate steps to ensure their retirement readiness.
“Feeling prepared is very different from actually being prepared,” Caroline Feeney, global head of retirement and insurance at Prudential, told CNBC (4).
“People feel prepared, so they’re not taking the necessary steps and plans now to start saving and get closer to closing what may be a real retirement gap for their future that they’re not aware of.”
Still, boomers should consider inflation when planning for retirement.
Lack of planning could become even more challenging. Baby boomers are in the midst of “peak 65,” with more than 11,200 Americans turning 65 every day through 2027 (5).
While 2026 brought a 2.8% cost-of-living adjustment (COLA) for Social Security benefits (6), it may not be enough to cover the rising costs of health care, housing, and food. For example, the standard monthly premium for Medicare Part B increased from $185 in 2025 to $202.90 in 2026, an increase of 9.7% (7).
The war in Iran has exacerbated the problem, causing increases in everything from travel and transportation costs to food prices and mortgage rates (8). The result? Lack of affordability for many Americans, particularly seniors on fixed incomes.
What’s more, a study by Goldman Sachs Asset Management reveals that retiree spending increased 3.6% annually between 2000 and 2023, while the consumer price index increased 2.6% during the same period (9).
Many people think they will spend less once they retire, certified financial planner Uziel Gómez, founder of Primeros Financial in Los Angeles, told CNBC, adding, “When in reality, they usually spend more because they have more time to do many of the things they like to do.”
Here are some ways to prepare, whether you’re retiring now or 20 years from now.
Read more: Taxes are changing under Trump’s ‘big, beautiful bill’: 4 reasons retirees can’t afford to waste time
Your golden years are meant to enjoy life, not stress over every dollar. With a little planning and a realistic budget, you can make your savings work harder for you once steady paychecks stop.
For some retirees, that could mean cutting housing costs by downsizing and redirecting those savings toward travel or hobbies.
Because there is no one-size-fits-all strategy, budgeting apps like Monarch Money can be a great tool for tracking your spending and reaching your financial goals.
Monarch Money puts all your finances under one roof, from your bank statements to your investments. You can also add separate or joint accounts to your dashboard, which can be great for tracking shopping purchases for couples on fixed incomes.
The app is also well reviewed. Both Forbes and the Wall Street Journal ranked Monarch Money as their best budgeting app for 2025.
And the best part? Monarch Money offers a seven-day free trial so you can see if it’s right for you. If you like what you see, you can get 50% off your first year with code WISE50.
If you want a little more guidance, a financial planner can help you put it all together. They’ll look at your entire financial picture and map out a plan that will make your retirement money work smarter.
According to Prudential’s survey, people who work with a financial advisor are more confident in their financial security and have a clearer vision for their retirement than those who don’t.
And finding a licensed financial advisor is now easier than ever thanks to platforms like Advisor.com.
All you have to do to get started is answer a few basic questions about your current financial situation and future goals. Then, Advisor.com’s AI-powered search tool will review its network of fiduciaries to find the best fit for you, all for free.
From there, you can schedule a free, no-obligation consultation to see if they are the right fit for you.
Another factor to consider is the resistance of your portfolio to market changes and instability. A well-diversified portfolio typically includes a mix of stocks and bonds, but alternative assets – like gold – are becoming increasingly accessible to the average American.
The precious metal has long been considered the ultimate safe haven, and has proven its worth by hitting an all-time high this year, with some investors predicting even higher prices to come throughout 2026 (10).
One way to invest in gold that also offers significant tax advantages is to open a gold IRA with the help of Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially protect their retirement funds against economic uncertainty.
Download your free information guide today to learn how to get up to $10,000 in free silver on qualifying purchases.
Just keep in mind that gold is often best used as part of an otherwise well-diversified portfolio.
While experts note that COLA can help retirees weather inflation better than most financial products, older Americans still struggle.
“A 20% increase over four years is life-changing, although it may not match the economy itself,” David Freitag, a financial planning consultant and Social Security expert at MassMutual, said of the recent cost-of-living adjustment, adding, “These are significant increases that make a difference in people’s lives (11).”
However, according to a survey conducted by AARP in September, only 22% of people ages 50 and older believe the cost-of-living adjustment is enough to keep up with inflation, and nearly three-quarters (72%) say the COLA should be 5% or more (12).
As you approach retirement, every dollar starts to matter more. While budgeting and planning ahead helps, you can also take advantage of deals and discounts tailored to older Americans.
For example, senior-focused organizations like AARP offer discounts on almost everything, from prescriptions and dental plans to travel, entertainment and insurance.
AARP can also help you make informed financial and health decisions.
AARP members get access to guides that can help you get the most out of Social Security, choose the right Medicare plan, and discover other government benefits, which could save you thousands of dollars.
Sign up for AARP today and get 25% off your first year.
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AARP (1), (12); Speed of light (2); Prudential (3); CNBC (4), (8); Lifetime Income Alliance (5); Social Security Administration (6); Centers for Medicare and Medicaid Services (7); CBS News (9); Reuters (10); Goldman Sachs Asset Management (11)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.