How Do I Protect My Retirement Savings From Inflation?

Inflation is that hungry wolf chasing your retirement.

Especially in today’s modern world where prices seem to fluctuate like the weather.

And in retirement, people are finding more and more that a dollar doesn’t go as far as it once did.

So retirees have to ask themselves one question:

How do I make sure my money works for me once I stop working for it?

No One Can Predict When Inflation Will Affect You

But you can build a fortress to withstand it. 

During your working years, inflation is manageable because income tends to grow alongside costs. 

With good health and a steady job filled with raises, promotions, or better career changes, those can help offset rising prices.

But retirement shifts that dynamic completely.

Instead of earning income, you begin drawing from savings, but that shift can be risky because your purchasing power can slowly erode if your income plan doesn’t keep up over time.

A retirement that lasts 25 or even 30 years means inflation isn’t a short-term concern. Even modest inflation can significantly reduce what your money can buy over decades.

That presents new challenges with making your lifestyle stable. 

What Are Some Common Mistakes People Make?

When inflation dominates the headlines, we frequently see a few common patterns when people become too reactionary :

Moving too much cash

Cash feels comfortable, but over long periods it can lose its purchasing power. 

Chasing higher yields

Investments promising higher income can appear attractive during inflationary periods, but with higher yields come with higher risk. This is even true of interest bearing products like GICs, as the risk of not being able to replace that same income over time grows.

Treating retirement like the saving years

Strategies that worked while accumulating wealth don’t always work once income withdrawals begin.

Ignoring taxes

Taxes can quietly reduce real income if withdrawals aren’t coordinated properly.

Inflation exposes the weaknesses in your plan. 

Five Ways a Retirement Plan Can Help Protect Against Inflation

Just like Dave Popowich says, “protecting your retirement savings from inflation comes from structure, discipline and balance. Any short term growth strategy can derail longevity.” 

Dave believes these five ways can help protect against inflation:  

1. Maintaining Growth in Retirement

One of the biggest misconceptions is that growth investing ends at retirement. 

But in reality, a portion of a portfolio often still needs growth to help income keep pace with rising costs.

But in retirement, your growth investments often support your income in a different way.

2. Building Income That Can Adapt Over Time

A well-designed income strategy allows adjustments as expenses change. Some income sources remain stable, while others provide flexibility to grow alongside inflation.

This balance helps avoid being locked into a fixed income that loses purchasing power.

3. Using Tax-Efficient Withdrawals

Where income comes from matters just as much as how much you withdraw. Coordinating RRSPs, TFSAs, pensions, and government benefits can reduce unnecessary tax drag, helping income last longer.

4. Diversification Beyond One Solution

No single asset protects against every environment that the storm can manifest in. 

That’s why diversification helps manage uncertainty by ensuring different parts of a portfolio respond differently to economic conditions.

5. Reviewing Your Retirement Plan Regularly

Your retirement plans should evolve with your needs – not just inflation.

Having regular reviews allows for adjustments before small issues snowball.

Planning is an ongoing process.

The Real Goal Isn’t Beating Inflation

Many people assume the goal is to outperform inflation every year.

But in reality, the mission is simpler:

Maintain your lifestyle and purchasing power throughout retirement.

A successful retirement plan focuses less on short-term market movements and more on sustainable income over decades.

Planning Beats Prediction

Inflation will always be part of the economic landscape and trying to predict its path is difficult, even for experts.

But retirement security doesn’t depend on perfect forecasts.

It depends on having a coordinated plan that balances income, growth, taxes, and flexibility.

Because protecting your retirement savings from inflation isn’t about reacting to headlines. 

It’s about building a strategy designed to endure them.

At PKAG, we help you prepare for what’s next, especially in a changing economic landscape.

Visit us at pkag.ca to learn more about who we are and what we do, or to sign up for one of our retirement seminars.

This commentary is for discussion and informational purposes only and should not be interpreted as a recommendation, an endorsement, or solicitation of any investment strategy, or to buy, hold or sell any security. Individual circumstances and current events are critical to sound planning; anyone wishing to act on the information presented should consult with his or her financial, legal or tax advisor.

David Popowich and Faisal Karmali are Investment Advisors with CIBC Wood Gundy in Calgary.

The views of David Popowich, Faisal Karmali, and the guest author and referenced material do not necessarily reflect those of CIBC World Markets Inc.

This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change.

CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc.