How to Keep Your 401(k) Safe from Inflation

• Author: Jenny Wolff
• Posted: 2026-01-26

If you have a 401(k) retirement plan, it's important to know that inflation can slowly reduce the value of your savings. As prices for goods and services rise, the money you save today may not buy as much in the future.

Taking steps now can help protect your money and keep your retirement plans on track.
 

Steps to Protect Your 401(k)

 

• Diversify Your Investments: Spread your savings across different types of investments, such as stocks (equities), bonds, real estate, and commodities. This helps reduce risk because if one investment doesn't do well, others may perform better.
• Invest in Inflation-Protected Securities: Some investments are designed to keep up with inflation, like Treasury Inflation-Protected Securities (TIPS). Including these in your portfolio can help keep your savings aligned with rising costs.
• Consider Stocks: Over many years, stocks have generally grown faster than inflation. Companies can often raise their prices when costs go up, which may help your investment keep pace with inflation.
• Look at Bonds: Bonds can still be a good choice, especially if they are short-term, newly issued, or protected against inflation. They might not earn as much when inflation is high, but they add stability to your portfolio.
• Add Commodities: Investments in things like gold, oil, or agricultural products can also protect your savings from inflation. You can invest in these through special funds (ETFs) to make your portfolio more diverse.
• Think About Real Estate: Investing in real estate through Real Estate Investment Trusts (REITs) can help too. Usually, property values rise with inflation, and REITs offer the chance to earn income without having to own and manage properties yourself.

It's also smart to check your 401(k) regularly. Make sure your investments are still balanced and in line with your goals and the current economy.
 

Recent News: 401(k) and Home Ownership

Recently, there was talk about letting Americans use their 401(k) savings as a down payment for buying a home. Some thought this could make buying a house easier.

However, former President Donald Trump did not support the idea. Instead, he focused on making homes more affordable by stopping large investment companies from buying single-family houses.

Home prices are still high, and it’s getting harder for people to buy. Trump believes 401(k) savings should be protected for retirement, not used to pay for housing.
 

Summary

To protect your retirement savings from inflation, make sure your investments are diverse and include assets that usually keep up with price increases.

Keep an eye on your account, adjust when needed, and remember that using 401(k) savings for other purposes might not always be the best idea.

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Check out: IRS Introduces New $6,000 Tax Deduction for Seniors