In this episode of the One of a Kind Financial Show, host Mike Milligan and guest Gary Nolan discuss how current inflation is eroding the purchasing power of retirees, especially in the three expense categories that matter most: food, housing, and healthcare. They explain why traditional safe assets such as CDs and bonds often fail to keep pace with inflation after taxes, and why Social Security’s cost‑of‑living adjustments (COLA) and rising Medicare premiums are insufficient to cover rising living costs. The conversation highlights the danger of fixed‑income retirement income that does not adjust for inflation, using a real‑world example of a pension without COLA. They then outline proactive inflation‑proofing tactics, including annuities with inflation riders, Treasury Inflation‑Protected Securities (TIPS), real‑estate investment trusts (REITs), rigorous budgeting, and guaranteed income solutions. Finally, they introduce the “One of a Kind Financial Plan,” a comprehensive, no‑cost, no‑obligation service that reviews taxes, retirement income sustainability, investment risk, long‑term care funding, and legacy planning. The segment ends with standard disclosures and multiple calls to action for listeners to contact One Oak Financial.
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Welcome to the One of a Kind Financial Show Daily with your host, Mike Milligan. Well, just a couple weeks ago, that Thanksgiving dinner cost more this year again, but it's not just the bird that gets smaller. Inflation is quietly trimming your purchasing power, your retirement confidence, and maybe even your plans to spoil the grandkids in Florida on a trip to Disney for vacation or a cruise that goes out to the Caribbean. In a segment that we recently aired over Thanksgiving weekend on the One of a Kind Financial Show, Gary Nolan and I talked about these very thoughts because retirement is freedom. Use it well and don't waste the good years. Enjoy this segment. And by the way, be one of a kind.
We lived through record inflation over the years, and while the headlines have cooled off, The real costs happen now for retirees especially. This isn't just an annoyance, it's a financial risk with long-term consequences. From higher healthcare plans and costs to shrinking bond returns, inflation can quietly undermine your retirement plan. So today we're looking at how to fight back, not just with the numbers, but with smarter decisions about income, investing, and spending. So my first question for you, Mike, is where are retirees feeling the pinch most right now?
Well, even if inflation is technically easing, food, housing, healthcare are still far above pre-pandemic price levels. The interesting part about inflation, Gary, is that it really impacts the things that are most important to retirees. See, things like, if you look at the inflation numbers that have come out and you dive deep into the Department of Labor Statistics, You see things like gas prices are actually negative, right? You see, and you see a lot of other things that are negative, but things that are really impacting retirees— food, housing, and healthcare— are even higher than what inflation has been reported.
Yeah, unfortunately, I see some retirees have to choose between getting their medication and getting food. And that's really sad, Mike.
It is. And it's a lifestyle trade-down. It's something that nobody really wanted or really envisioned for the end of their life to be like. It's really interesting, Gary, because we spend the first 18 years or so being at the mercy of what our parents wanted to be. We're in the education phase of life. And so we eat what they give us.
Sure.
Right? And we don't really have a lot of choice at that point. Then we start making money and we work and we build and we start having our own choices and we get our own preference. And then we get to the end of life and there we are being restricted again. Now it's just by Uncle Sam. It's not mom and dad.
Absolutely.
And Uncle Sam is ultimately because of taxes, because of the rising prices that are happening, we're being impacted on the choices that we get even late in life.
Right. Which leads us to this. Why is inflation so dangerous for fixed income retirees?
When income doesn't adjust for inflation or adjust too slowly, it's like getting a pay cut every year. I just was with some clients this past week. They retired from the Port of Virginia. The Port of Virginia has a pension retirement system that does not have cost of living adjustments. And so when he retired in 2002, the same pension that he got then is the same pension he has now. Now, he has gotten some cost of living adjustments with Social Security, but could you imagine trying to live on the same amount of money you had in 2002? There are ways, Gary, though, that retirees can hedge this risk. It's one of the reasons you save during your working years in the 401 or Thrift Savings Plan or IRAs. So that then you have appreciating assets that you could then turn into income that increases in retirement. And you could even guarantee that with a guaranteed annuity, like a pay raise for yourself.
Sure.
Those assets that you have that continue to appreciate can produce dividends. But there's many ways to hedge against that. But fixed income people, the folks at One Oak Financial know you may be struggling now, but we also know that if you're on a fixed income, you're going to be struggling a whole lot more in the future. And there are solutions that can help you.
Yeah, I'm going to give the phone number in just a couple of minutes. Mike and the team can definitely help you out. How about traditional safe assets? Are they still safe in an inflationary environment?
Well, CDs and bonds used to be the comfort zone for retirees, but rising rates and inflation complicate that picture. Um, you have to remember, guys, if you're getting like a 4% CD, rate on, uh, on your money. And you have— and that 4% interest is still being taxed. And so here in the great state of Virginia, for instance, if you, if you're in the 12% tax bracket and you, and you have state taxes of a little over 5%, that 4% rate after taxes is really only about 3. 2 or so of real money. And inflation is about the same. It's actually just a little bit less than that right now.
So it's a wash pretty much.
It's a wash. And so your money is the same. But remember, for retirees, the real inflation for retirees is higher because the things you spend money on, healthcare, food, travel, housing, is more expensive. And so by having things in CDs, You're even, you're even, you're even losing the purchasing power by having the money in the bank. Smart, smart investors like, you know, Warren Buffett, for instance, we call him the, the greatest investor ever to live. I very seriously doubt Warren Buffett— I don't know this for a fact, but I doubt he has money in CDs.
Yeah, probably not.
I don't think so.
Probably not. The show is the One of a Kind Financial Show. Mike's going to tell you all about the One of a Kind Financial Plan. In just a few minutes. Let's get you on the calendar, all set up with that comprehensive plan, with that one-of-a-kind financial plan. 800-748-1838. 800-748-1838. Or text the word IDEAS to 600-700. Mike with One Oak Financial, folks standing by this weekend ready for your phone call. I'm going to ask you about healthcare inflation too, Mike.
Uh, that's great. By the way, we just got a text in from Warren Buffett. I don't know if it's the actual Warren Buffett, but we'll find out after the show when we call him and we'll see. Maybe he does use CDs, Gary. I don't know.
You never know. We'll find out though.
But the healthcare inflation, according to Fidelity, the average 65-year-old couple retiring today will need around $315,000 for out-of-pocket medical costs. That's a lot of money.
Oh yeah.
And those costs are rising faster than inflation. So if the money is $3.15 in today's dollars and you're on a fixed income or you don't have that money readily saved, we need to work that into your budget to find out how we're going to be able to cope with those costs. And so without a budget, guys, I mean, and most people, we've had this major transformation over the last 25 years, Gary. For all of time, You go back to the beginning of time, up until about the year 2000, people used to keep ledgers and checkbook registers. And sure, now, now they trust technology to do that. And technology will automate it for you. Like it's on your, it's online banking. It's this, guys, the, the, the lack of keeping a register, a budget, right, of where your money is. is causing money to leak out of Americans' pockets every day. And like, so the way to combat inflation, especially when it comes to healthcare, is to track every dollar you have.
Yeah, absolutely. Let's talk about Social Security. You mentioned cost of living. Is the COLA keeping up at all?
Well, the 2025 COLA is set at 2.5%, and the adjustment that's coming according to the Social Security Administration that's coming in January of 2026 is 2.8%, but actual living costs for retirees have risen far more. So that adjustment is not really— and by the way, when you think about that adjustment on your Social Security, you know what else went up this year? One of the deductions that come out of your Social Security, Medicare premiums. Medicare premiums, yeah. And so you're not getting 2.8% more than what you had because those premiums also went up on Medicare.
What about inflation? Does it impact the safe withdrawal rate that we talk about? We always talk about the standard 4% rule. I know it's not one of your favorite rules.
Well, you know, it's not mine. Matter of fact, it's not— the guy who created that, Bill Bengen, who was on the Ideas by Mike podcast back in October, also is not a big fan of the 4% withdrawal rule now. He actually says in the new analysis that he's done, the rate of return or the systematic withdrawals you could take out is 4.7%. I hear you. But when it comes to inflation, the standard rule doesn't account for rising cost. And you could be taking out too much, or some people are taking out too little without realizing it. More free time. And so when it comes to those safe withdrawal rates, we need to kind of analyze your budget and your spending plan to see, is inflation eating away at your purchasing power? And And are you taking the amount you need or taking too much out?
All right. I have a couple more questions for you before we wrap up the segment, Mike. What proactive moves can retirees make to inflation-proof their plans? What, what could they be doing?
Well, from annuities with inflation riders to Treasury inflation-protected securities called TIPS or real estate investment trusts, There are tools that are useful in a retiree's portfolio. And see, Gary, people will say all the time, I don't want an annuity. I don't want a TIP. I don't want to re— I don't want, I don't want, I don't want. You know what else you don't want is you don't want inflation.
Yep.
But it's very— but, and they're both problems, right? When you don't want something because you've heard poor information or it hasn't been explained right, or you feel like you've been sold something. You don't want that and you don't want inflation. Well, one of, one of those is going to happen no matter what, and the other one will help you solve that problem. And so we have to get past the problems and see what solutions are there to combat something that's out of our control, and that is inflation.
Yeah, Mike and his team will definitely help you. All right, Mike, tell us about the One of a Kind Financial Plan.
Guys, I go to— I'm going to tell you about that, but I'm going to tell you a 15-second story. I go to a gym called Orangetheory. And at Orangetheory, we do a workout called Everest, where every minute we go up on the incline from 1% to 15%. And then at that 13-minute mark, we could start going down 14%, 13%. And the coach will say, To us, let's go downhill. Guys, I don't know if you've ever been on a treadmill before going at 14% incline or 13% incline, but you're not going downhill.
Oh, yeah.
Right? That's what inflation is. Inflation stacks on itself every year. So the inflation of 2.6% this year is on top of last year's 3%. It's on top of last year's 4%. So last year's 6%, and the year before that's 9%. Inflation is a problem, guys, and the One of a Kind Financial Plan can help you solve for that. Now, how does it do that? It helps you see what the real taxes you should be paying and helps you control that. It helps you look at your retirement income and see, is the retirement income that you need to take— will you still have money at the end of your life? And if it's not, We look to guarantee your income for life with your assets. It goes to an investment plan to make sure you're taking the right amount of risk so that inflation is not a problem for you in the future. It creates a long-term care plan to combat those end-of-life costs like Fidelity has estimated we all are going to have. And then it creates a legacy plan. Guys, I created the one-of-a-kind financial plan and we are delivering it every week. to dozens of people because I believe you're unique. And if you're unique, if you're one of a kind, you deserve a one-of-a-kind financial plan.
Absolutely. And here's the good news, folks. There's no cost. There's no obligation to get a better handle on your financial situation. It starts out by picking up the phone and dialing this number: 800-748-1838. 800-748-1838. Or text the word ideas to 600-700.
I hope you enjoyed That segment of the One of a Kind Financial Show. We're found weekly on WINS and WTAR in Norfolk, Virginia, and on AM in Midland-Odessa area in Texas, and anywhere you find your podcast. I want to remind you that I, Mike Milligan, am an investment advisory rep with Advisory Alpha LLC. Ideas by Mike, doing business as One Oak Financial, is an unaffiliated entity to Advisory Alpha LLC. All opinions expressed on this mini podcast and on the One of a Kind financial show, radio show, are just of that. The opinions are mine and Gary's. We're here to provide educational content for you, but remember, as always, consult a licensed financial professional before making any decisions. Any tax advice references Social Security Administration should refer to the Social Security Administration and tax advice should reserve be reserved for the IRS website and also consult a qualified tax advisor before making any Tax decisions.
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