- 22 June 2026
Read T. Rowe Price’s framework for distinguishing between different types of drawdowns and responding...
Inflation risk: The quiet test of retirement income
- PROFESSIONAL INVESTORS
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- 22.06.26
- Cash remains useful for short-term spending, but holding too much for too long can weaken future spending power
- The Baillie Gifford Monthly Income Fund aims to provide monthly income while seeking to preserve the value of income and capital over time
Retirement income needs to do more than cover spending today. It also needs to hold up as living costs rise.
That is where inflation becomes a real challenge. It rarely arrives as a single shock. More often, it appears gradually in the weekly shop, insurance renewals, energy bills, holidays, or the prospect of care later in life. Each increase may feel manageable on its own. Over time, though, they can materially change what retirement costs.
Cash has an important role in this picture. It helps cover bills, supports emergency spending and can provide reassurance when markets are unsettled. The difficulty comes when money intended for later life stays in cash for long periods. The balance may look steady, or even higher, while its spending power slips.
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