Your retirement savings may be growing in dollar terms. But that does not necessarily mean your purchasing power is growing with it.

That question is especially relevant right now. The latest Consumer Price Index showed prices were 3.4% higher in July than a year earlier, and another inflation report is due September 11, just days before the Federal Reserve meets again on September 15-16.

For retirees and people approaching retirement, the bigger issue is not simply how much money is in an account. It is how much that money can still buy.

Your Savings Can Grow While Your Buying Power Falls

As of September 3, the national average savings account was paying about 0.63% APY, while the average one-year CD was paying about 2.05%.

Compare that with annual inflation of 3.4%.

Someone earning interest may still be falling behind if the cost of living is rising faster than the return on their savings.

That does not mean cash or CDs are bad places for money. They can play an important role in providing liquidity, stability and access to near-term funds. And some high-yield savings accounts currently offer rates around 4%, considerably above the national average.

The important point is simply this: A growing balance does not automatically mean growing purchasing power.

Retirement Costs Can Rise Even Faster

Headline inflation also does not affect everyone the same way.

Retirees may spend a larger portion of their income on expenses such as health care, housing, insurance and food-and some of those costs can rise faster than the overall inflation rate.

Health care is a good example.

Fidelity estimates that a 65-year-old retiring in 2026 could spend an average of $185,500 on health care and medical expenses throughout retirement. That estimate increased 7.5% from just one year earlier.

Social Security does provide some protection through annual cost-of-living adjustments. Benefits increased 2.8% in 2026.

But every retiree has a different mix of expenses. A national inflation number or Social Security adjustment may not fully reflect what an individual household is experiencing.

The Fed Adds Another Variable

Interest rates are another part of this equation.

The Federal Reserve meets September 15-16, shortly after the next inflation report is released.

If inflation remains high, rates could stay elevated. But if economic conditions weaken and the Fed eventually lowers rates, banks can also reduce the rates they pay on savings accounts and other deposits.

That creates a challenge for retirement savers: inflation can reduce the value of their dollars while the interest available on conservative savings can change with Fed policy.

It is one reason retirement planning is not only about accumulating money. It is also about protecting purchasing power over time.

Where Gold Can Fit

That is where diversification becomes important.

Gold is not guaranteed to rise with inflation every year, and its price can move significantly in the short term. But over longer periods, gold has historically had a long-term upward trajectory and has served as a store of value and has behaved differently from cash and many traditional financial assets.

According to the World Gold Council, gold has outpaced U.S. consumer price inflation over the long term since 1971.

For investors concerned about purchasing power, that history is one reason physical precious metals may be worth considering as part of a broader retirement strategy.

What About a Gold IRA?

For people who already have retirement savings in an IRA or other eligible retirement account, a self-directed Precious Metals IRA can provide another way to gain exposure to physical gold and other qualifying metals.

IRS rules allow certain gold, silver, platinum and palladium coins and bullion to be held within an IRA when specific requirements are met and the metals are held by an appropriate trustee or custodian.

A Gold IRA does not replace stocks, bonds, cash or other retirement assets. Some investors use precious metals to diversify a portion of their retirement savings and reduce their dependence on any single type of asset.

The Bigger Question Is Purchasing Power

Retirement planning often focuses on reaching a certain account balance.

But the number in the account is only part of the story.

Inflation remains elevated. Some conservative savings rates remain below inflation. Certain retirement expenses, including health care, continue to rise quickly. And the future direction of interest rates remains uncertain.

For retirement savers, the more important question may be whether their money is positioned to maintain its purchasing power over the years ahead.

If you're interested in learning whether physical gold, silver or a Precious Metals IRA could fit into your retirement strategy, call Lear Capital at 855-271-2873 to speak with a precious metals specialist and learn more.