EVERYTHING IS GOING SWIMMINGLY: Inflation Puts More Retirees at Risk of Running Out of Money: Rising prices require bigger withdrawals from retirement savings.

Retirees took more money out of their savings to keep up with rising prices, raising the risk of depleting their nest eggs.

The rise in spending since 2021 shows how pernicious inflation can be for those in or near retirement, especially since higher prices can also erode the value of the cash and fixed-income investments many plan to live on in the near future, according to a study Boston College released Wednesday.

“High inflation later in life is often harmful to retirement security,” said Laura Quinby, a senior research economist at Boston College’s Center for Retirement Research and co-author of the study.

Though inflation has cooled from the 9.1% pace it set for the 12 months ended in June 2022, it remains above the Federal Reserve’s 2% annual target rate. Prices rose 3.4% in April from a year earlier, according to the latest Labor Department data released Wednesday, compared with an annualized 3.5% pace in March.

Higher withdrawals are one reason Boston College projects that inflation caused a 14.2% decline in the financial wealth held by middle-income retirees between 2021 and 2025. (If rising interest rates trigger a recession, their wealth would decline 16.6%.)

Note that “inflation has cooled” just means the rate at which prices are rising has slowed. Things still cost more than they used to, and they’ll still cost more next year than they do this year. It doesn’t actually mean that things have gotten better, just that they’re getting worse more slowly.