In 1960, a gallon of milk cost 36 cents, and today it costs $3.35 on average.[1] Inflation is to blame, and we could see higher inflation in the coming years. It’s important to have a sense of how much you’ll need to spend in retirement, but this is difficult when future costs and tax rates are unknown. How will you respond to rising costs in retirement – are you prepared?

Healthcare & Long-Term Care Costs

 Healthcare costs have been rising over the past 40 years, and this trend is expected to increase. It’s important to note that due to Medicare and Medicaid and the prevalence of private insurance, healthcare costs have increased partly because providers can increase prices when the consumer does not primarily bear the burden.[2] President Biden has proposed expanding Medicare and Medicaid, and the potential effects are unknown. Today, the average 65-year-old couple retiring today will need an estimated $295,000 to cover their healthcare costs[3], and that doesn’t include long-term care costs. In 2020, the median yearly cost for an in-home health aide was $54,912, and the median yearly cost for a private room in a nursing home was $105,850.[4] Retirees must have a plan for covering healthcare and long-term care costs, as well as other everyday expenses that could increase.

Everyday Items

The consumer-price index rose to 4.2% in April as compared to last year and was up from 2.6% for the year measured from the end of March.[5] We could see higher prices when it comes to travel, food, cars, and other common goods and services. Consider this if you plan to travel soon or retire. High inflation can hurt retirees who are living off their savings, especially when we have near-zero interest rates. While many economists don’t think we’ll return to the double-digital inflation rates of the ’70s, even low inflation can eat away at savings. After 20 years with a 2% inflation rate (the Fed’s “target” interest rate), $1,000,000 would have the buying power of only $672,971.[6] You may need to factor inflation into your retirement plan if everyday items, travel, and other expenses increase in cost.


If you have a large IRA, 401(k), or another tax-deferred retirement account, you need to prepare for taxes on them. Consider that taxes may be at historic lows right now. $1.9 trillion was recently spent on COVID relief, and with plans to increase and expand infrastructure, Medicaid, and education, there is a potential for taxes to increase. Distributions from traditional retirement accounts such as IRAs, 401(k)s, 403(b), 457, and Thrift Savings plans are taxed as ordinary income. There are ways to help reduce your tax burden in retirement, such as a Roth conversion, real estate strategies, and integrating your tax planning and investing strategies.

How Much Income Will You Need in Retirement?

This is the big question, and inflation can make it more complicated. When figuring out if you have enough to retire, consider that the buying power of your savings could decrease. There are a number of potential strategies aimed at helping to protect your savings against inflation and cover big expenses. If you have questions about inflation and how rising costs can impact your retirement, contact us today and we can help make sure you’re on the right path for the future.







Epstein & White Financial, LLC (“Epstein & White Financial”) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. A copy of Epstein & White Financial’s current written disclosure statement discussing our advisory services and fees is available for review upon request or at

Epstein & White Retirement Income Solutions, LLC (“Epstein & White Retirement”) is a licensed insurance agency with the State of California Department of Insurance (#0K53785). All investment advisory and financial planning services are provided only through Epstein & White Financial.

Please Note: Epstein & White is a tradename. All services provided by Epstein & White investment professionals are provided in their individual capacities as investment adviser representatives of Mercer Global Advisors Inc. (“Mercer Advisors”), an SEC registered investment adviser principally located in Denver, Colorado, with various branch offices throughout the United States doing business under different tradenames, including Epstein & White. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate, but is not guaranteed or warranted by Mercer Advisors.

Information contained herein is for informational and illustrative purposes only and general in nature. It should not be considered investment advice or a recommendation to buy or sell any type of securities or insurance products and no investment decision should be made based solely on any information provided herein. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas.

Investment in securities carries a risk of loss, including loss of principal amount invested. Different types of investments involve varying degrees of risk. It should not be assumed that diversification or asset allocation protects a portfolio from loss or that such will produce profitable results.