Inflation poses a significant threat to retirees, especially if it occurs early in their retirement. While Social Security offers cost-of-living adjustments based on the CPI, most other portfolio income is not inherently protected. To assess inflation risk, retirees should consider their spending patterns, as CPI averages may not reflect individual circumstances. Healthcare, for example, might represent a larger personal expenditure than its CPI weighting suggests. Evaluating the inflation-adjustment of income sources is crucial, with Social Security and some pensions offering protection. Treasury Inflation-Protected Securities (TIPS) and Series I savings bonds are the only investment vehicles specifically designed to counter inflation. Commodities can perform well during inflationary periods, while stock returns are inconsistent in the short term but historically outpace inflation. Fixed-income assets like cash and bonds are particularly vulnerable to rising prices eroding their value. The timing of inflation also matters; high inflation early in retirement amplifies its negative impact throughout a retiree's life. This early inflation is akin to sequence risk, potentially depleting portfolios faster. Therefore, retirees facing early inflation may need to adjust spending to mitigate financial risk.