Inflation Checklist: Tips to Manage Retirement Savings in Tough Times
The most immediate impact of inflation on retirement savings is that it erodes one's purchasing power. Over time, inflation reduces the value of money, meaning the dollar today will buy less in the future than it does now.
While inflation might seem like an abstract concept, it can have a real and tangible impact on one's retirement savings. There are practical strategies one can implement to help manage this very real risk as one ages and retirement savings deplete.
- Purchase inflation-indexed annuities - These annuities contain an inflation rider purchased at an additional cost and are designed to help protect investors from inflation. The annuity's indexed interest rate is adjusted based on changes in the inflation rate.
- Diversify the retirement savings portfolio - Investing in a mix of assets, especially those that tend to do well during inflationary periods, can help protect one's purchasing power.
- Invest in strategies that outpace inflation - Over long periods, stocks and mutual funds have usually outpaced inflation. Work with a financial professional to determine which strategies are suitable for your situation.
- Consider a graduated withdrawal strategy - By adjusting the amount withdrawn from retirement funds each year based on inflation and other factors, one can better manage spending in retirement.
- Consider a part-time job or side business - If you're healthy and able, working in retirement can provide more income to help keep up with rising costs.
By understanding how inflation affects retirement savings and employing smart strategies, one can mitigate its impact and work toward an independent retirement. The key is to plan for inflation now, so it doesn't derail your retirement income plan later.
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Semiconductor stocks have faced another bout of volatility, down 20.3% since their peak on June 22, as investors weigh elevated expectations against questions around the sustainability and returns of the AI-related capex. However, sharp swings are nothing new for the sector. Since 1995, the PHLX Semiconductor Index has experienced an average intra-year decline of 29.8%, yet still finished the year higher in 20 of those 31 years. 2026 has been no exception: Despite falling as much as 28.6% from its highs, the index remains up a remarkable 66% year-to-date, even after three consecutive years of double-digit returns, including a peak-to-trough decline of 35%.
While volatility is likely to persist, the underlying AI investment cycle remains supportive. Hyperscalers continue to invest heavily in expanding AI capacity and are expected to invest almost $800 billion in capex in 2026 and reach more than $1 trillion in 2027. The spending should continue to support the "picks and shovels" of the AI buildout, from semiconductors and memory to networking and data-center infrastructure.
For investors, periods of volatility are a reminder to look beyond short-term price swings and the importance of portfolio construction. Despite a compelling long-term growth story, semiconductors are, and are likely to remain, a volatile part of the market. Careful position sizing, disciplined use of leverage and exposure to diversifying assets can help investors withstand periods of sharp volatility while maintaining exposure to the sector’s long-term growth potential.
Chart of the Week: Source: FactSet, Nasdaq , J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest peak-to-trough decline during the year. Returns shown are calendar year returns. Past performance is no guarantee of future results.
Thought of the Week: Source: Bloomberg, FactSet, J.P. Morgan Asset Management.
Abbreviations: Cons. Sent.: University of Michigan Consumer Sentiment Index; CPI: Consumer Price Index; EIA: Energy Information Agency; FHFA HPI: - Federal Housing Finance Authority House Price Index; FOMC: Federal Open Market Committee; GDP: gross domestic product; HPI: Home Price Index; HMI: Housing Market Index; ISM Mfg. Index: Institute for Supply Management Manufacturing Index; PCE: Personal consumption expenditures; Philly Fed Survey: Philadelphia Fed Business Outlook Survey; PMI: Purchasing Managers' Manufacturing Index; PPI: Producer Price Index; SAAR: Seasonally Adjusted Annual Rate
Index: Institute for Supply Management Manufacturing Index; PCE: Personal consumption expenditures; Philly Fed Survey: Philadelphia Fed Business Outlook Survey; PMI: Purchasing Managers' Manufacturing Index; PPI: Producer Price Index; SAAR: Seasonally
Adjusted Annual Rate
MSCI EAFE is a Morgan Stanley Capital International Index that is designed to measure the performance of the developed stock markets of Europe, Australasia, and the Far East.
Bond Returns: All returns represent total return. Index: Bloomberg US Aggregate; provided by: Bloomberg Capital. Index: Bloomberg Investment Grade Credit; provided by: Bloomberg Capital. Index: Bloomberg Municipal Bond 10 Yr; provided by: Blomberg Capital. Index: Bloomberg Capital High Yield Index; provided by: Bloomberg Capital.
Key Interest Rates: 2 Year Treasury, FactSet; 10 Year Treasury, FactSet; 30 Year Treasury, FactSet; 10 Year German Bund, FactSet. 3 Month LIBOR, British Bankers’ Association; 3 Month EURIBOR, European Banking Federation; 6 Month CD, Federal Reserve; 30 Year Mortgage, Mortgage Bankers Association (MBA); Prime Rate: Federal Reserve.
Commodities: Gold, FactSet; Crude Oil (WTI), FactSet; Gasoline, FactSet; Natural Gas, FactSet; Silver, FactSet; Copper, FactSet; Corn, FactSet. Bloomberg Commodity Index (BBG Idx), Bloomberg Finance L.P.
information from FactSet's Pricing database as provided by MSCI. Russell 1000 Value Index,
Style Returns: Style box returns based on Russell Indexes with the exception of the Large-Cap Blend box, which reflects the S&P 500 Index. All values are cumulative total return for stated period including the reinvestment of dividends. The Index used from L to R,
top to bottom are: Russell 1000 Value Index (Measures the performance of those Russell 1000 companies with lower price-to book ratios and lower forecasted growth values), S&P 500 Index (Index represents the 500 Large Cap portion of the stock market, and
is comprised of 500 stocks as selected by the S&P Index Committee), Russell 1000 Growth Index (Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values), Russell Mid Cap Value Index (Measures
the performance of those Russell Mid Cap companies with lower price-to-book ratios and lower forecasted growth values), Russell Mid Cap Index (The Russell Midcap Index includes the smallest 800 securities in the Russell 1000), Russell Mid Cap Growth Index (Measures the performance of those Russell Mid Cap companies with higher price-to-book ratios and higher forecasted growth values), Russell 2000 Value Index (Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values), Russell 2000 Index (The Russell 2000 includes the smallest 2000 securities in the Russell 3000), Russell 2000 Growth Index (Measures the performance of those Russell
2000 companies with higher price-to-book ratios and higher forecasted growth values).
Past performance does not guarantee future results.
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