Inflation Still Stings for Retirees. Here's How to Keep Up.

Many of us remember that a few years ago, inflation was an absolute beast. Unfortunately, it continues to be a problem today.

In April, the Consumer Price Index rose 3.8% on an annual basis. And while much of that increase stemmed from higher gasoline and fuel oil prices, costs were elevated across the board in April.

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If you're retired, inflation may be stressing you out and impacting your financial plans. But you're not doomed to failure. Here's how to keep up with inflation, even when it's stubbornly high.

1. Choose the right investments

Many retirees become more conservative with their investments after leaving the workforce. But being too conservative could mean failing to keep up with rising costs. If you have too much money sitting in cash or lower-yield bonds, your purchasing power could erode over time.

That's why it's important to keep some of your portfolio in stocks, despite the risks. Dividend-paying stocks and diversified growth ETFs (exchange-traded funds), when coupled with stable investments, could make it possible for your portfolio to beat inflation broadly without exposing you to undue risk.

2. Delay Social Security

Social Security is guaranteed to pay you a monthly benefit for the rest of your life. And Social Security benefits are also eligible for annual cost-of-living adjustments, or COLAs, that are tied to inflation.

The larger your checks are to begin with, the more buying power you should have -- and the more your yearly COLAs should be worth. So it could pay to delay your Social Security claim past full retirement age, which is 67 for anyone born in 1960 or later. For each year you delay filing, until you turn 70, your monthly benefits get a permanent 8% increase.

3. Look for ways to create extra income

Even with the right investments and boosted Social Security checks, you might need additional ways to fight inflation. That's where working comes in. Whether it's a part-time job with set hours, gig work, or a small business you start, working is a great way to generate extra income to give yourself a leg up on inflation.

However, you don't necessarily have to return to a job. There are ways to create income passively, like buying a rental property or choosing investments that give you a steady paycheck.

And remember, you don't necessarily have to aim to earn thousands of dollars a month. Working a couple of hours a week and earning a few hundred dollars a month could go a long way.

Inflation has been annoyingly high in recent years, and it doesn't seem to be getting better. Adapting to that reality could be your ticket to getting ahead and avoiding a major loss of buying power that messes with your retirement plans.

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