It’s a truism that high inflation hits hardest for people on fixed incomes—especially retirees. And seniors are telling pollsters that high inflation is among their top worries.

But the actual impact of inflation on retirees is more complex. It depends in large part on your financial circumstances and age—and on how you manage healthcare costs and Social Security claiming decisions.

Let’s start with a big-picture view on how retirees are feeling these days. Despite the economic turmoil created by the pandemic, higher inflation, and volatile markets, most retirees remain remarkably confident. The latest Retirement Confidence Survey published by the Employee Benefit Research Institute finds that nearly eight in 10 are confident they will have enough money to live comfortably throughout retirement, and one in three are very confident.

Those who are less confident cite inflation as their number-one concern. That reflects the current headlines about very high inflation rates, of course, although even moderate inflation is always an important factor in retirement plans. One hundred dollars—assuming an inflation rate of 2%—would have the same purchasing power as $164 after 25 years.

Moreover, rising healthcare costs can be ruinous for lower-income households. Half of Medicare enrollees had income below $29,650 in 2019, and one in four was living on less than $17,000. Many struggle to meet basic needs, especially in high-cost parts of the country.

Learn more in my column.