Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. It comes as no surprise that Americans are paying more for necessities than they did last year (1). In response, they're tightening their belts — so much so that a Lightspeed survey found that 1 in 4 consumers will shop on Black Friday only for everyday essentials such as groceries, toiletries and household basics (2).
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Only 55% of adults surveyed by Prudential in 2025 said they've factored inflation into their retirement planning (3). Despite this lack of planning, 89% of those surveyed have "high confidence" in covering essential retirement expenses. Prudential referred to this as a "confidence paradox," where consumers feel confident without taking the proper steps to ensure retirement readiness.
"Feeling ready is very different than actually being ready," Caroline Feeney, global head of retirement and insurance for Prudential, told CNBC (4). "People feel ready, so they're not taking the necessary action and plans now to start saving and leaning into closing what may be a real retirement gap for their futures that they're not aware of." Regardless, boomers should consider inflation when planning for their retirement. A 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 rose from $185 in 2025 to $202.90 in 2026 — a 9.7% increase (7).
The war in Iran has compounded the problem, leading to spikes in everything from travel and transportation costs to grocery prices to mortgage rates (8). A lack of affordability for many Americans — particularly older adults on a fixed income. What's more, Goldman Sachs Asset Management research reveals that retirees' spending increased 3.6% annually from 2000 to 2023, while the consumer price index rose 2.6% over the same period (9).
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