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Arconic Employees: Inflation Worries Impacting Retirement Savings

'Arconic employees must recognize that inflation, rising health care costs, and tariffs can erode their retirement savings, making it crucial to plan proactively to safeguard their financial future.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Arconic employees should understand that proactive financial planning is key to mitigating the long-term impact of inflation and rising health care costs, so that that their retirement savings can sustain them through unexpected financial challenges.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

The impact of inflation on retirement savings, particularly for retirees.
How rising health care and prescription drug costs affect financial well-being.
The importance of proactive financial planning for retirees, especially those at Arconic.

According to the Schroders 2025 U.S. Retirement Survey, ¹ 92% of retirees express concerns that rising costs are eroding their savings, making inflation a persistent worry. Despite signs of decreasing inflation, these concerns remain prevalent among retirees, including many Arconic employees. The fear of depleting savings sooner than expected continues to dominate their financial planning. Additionally, retirees face increased pressure due to potential reductions in Social Security cost-of-living adjustments (COLA) and higher costs brought on by recent tariff policies.

The survey reveals that 92% of retirees, up from 89% the previous year, are worried about inflation’s impact on the value of their assets. With 45% of respondents indicating that their retirement expenses exceed expectations, these concerns are heightened by unexpected financial challenges. 'Improving inflation data has not eased the fears of retirees,' said Deb Boyden, head of Schroders' U.S. defined contribution. 'Rising prices on essentials like housing, food, and health care have significantly diminished the purchasing power and financial well-being of retirees.'

Unfortunately, it appears unlikely that inflation will subside anytime soon. Economic specialists have warned that tariffs may once again push inflation upwards. Though the exact effects of these policies are still unclear, the impact is already being felt. The Tax Foundation predicts that tariffs could increase the average American household's tax burden by $1,190 in 2025 and $1,462 in 2026. ² Retail giants like Walmart have hinted at price hikes, suggesting that many households, including those of Arconic employees, may face greater financial strain.

Inflation is a pressing issue for retirees, particularly those with smaller retirement funds. Many individuals nearing retirement age at Arconic companies may not be financially prepared for the rising costs of living. Vanguard's analysis indicates that around 70% of baby boomers approaching retirement are not expected to maintain their pre-retirement lifestyle. ³ As a result, many retirees may struggle to afford the quality of life they envisioned in their later years due to insufficient savings.

'Retired Americans, including Arconic retirees, are understandably concerned about how inflation could affect their savings in light of potential tariffs,' explained Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

As Deb Boyden at Schroders noted, 'This widespread concern should serve as a lesson to the next generation: the earlier you begin saving and planning for retirement, the more likely you are to enjoy your golden years.'

For those who rely on fixed incomes, such as many Arconic retirees, inflation can be particularly damaging. Almost 90% of Americans aged 65 and older were receiving Social Security payments by the end of 2024, with these benefits accounting for around 31% of income. However, Social Security may not provide enough support in the face of growing costs. The Senior Citizens League has projected that COLA will only be 2.5% in 2025, down from 3.2% in 2023, and well below the 8.7% adjustment in 2022, driven by pandemic-induced inflation. ⁴

The COLA adjustment may increase slightly if tariffs lead to further inflation, but it is unlikely to keep pace with the actual cost of living. The Consumer Price Index for Urban Wage Earners and Clerical Workers, used to determine COLA, is based on data from the third quarter of the year. However, retirees—including those at Arconic—might continue to struggle with inflation's effects on their savings and purchasing power, even with an increased COLA.

Prescription drug costs remain a key concern, especially for retirees. Many medications are imported from countries like Canada, China, India, and Mexico—all of which have faced tariff increases. The U.S. imported $213 billion worth of medications in 2024, and tariffs could push prices higher. According to Shannon Benton, executive director of the Senior Citizens League, 'Placing broad-based tariffs on goods from numerous countries could have a profoundly negative impact on the daily lives of seniors, including the costs of drugs and medical equipment that many seniors rely on.'

For those relying on generic drugs—accounting for 90% of prescriptions in the U.S.—tariffs may be especially burdensome. The thin profit margins in the generic drug industry may force international producers to absorb tariff costs, potentially raising prices and further burdening retirees like those at Arconic. If tariffs persist, foreign producers could exit the U.S. market, further driving up costs for medications.

Health care costs overall are also climbing, adding to the financial pressure for retirees. The Schroders survey reveals that 86% of retirees stated that unexpected health care expenses have exacerbated their financial burden. With health care now being one of the largest expenses in retirement, rising inflation will make it even harder for retirees, including those at Arconic, to manage their finances.

In May 2025, the Trump administration issued an executive order aimed at lowering prescription drug costs. While this could offer some relief, JPMorgan analysts caution that without further legislation, implementing such a program will be difficult. ⁵ Even with policy changes, prescription drug prices in the U.S. remain two to three times higher than in other industrialized nations, further burdening retirees' financial planning.

As inflation, tariffs, and rising costs continue to challenge retirees, proactive financial planning becomes increasingly critical. Arconic employees nearing retirement should be especially mindful of how inflation threatens their purchasing power and financial well-being. Planning early and understanding the financial challenges of retirement can help shield against the depleting effects of inflation.

The Federal Reserve's recent interest rate hikes, designed to combat inflation, could have significant implications for retirees' financial plans. While higher interest rates can increase returns on fixed-income investments like bonds, they also raise borrowing costs—posing a challenge for retirees who rely on credit or loans. This shift in interest rates may complicate retirement planning for many, including Arconic retirees, who may need to adjust their asset allocations.

Inflation, tariffs, and rising health care costs are creating additional financial strain for retirees, including those at Arconic. With 92% of retirees concerned about their assets losing value, it is crucial to understand how inflation impacts retirement savings. Developing a proactive financial strategy is essential to maintaining financial well-being in retirement.

Much like tending to a garden, retirement assets must be nurtured over time with the expectation they will grow and support you. Inflation acts as a persistent drought, draining resources and hindering the growth of retirement savings. Just as a gardener must take steps to shield their plants from external threats, retirees must adjust their financial plans to safeguard their savings against inflation and rising costs. Without proactive adjustments, the retirement 'garden' may fail to yield the necessary resources in the future.

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Sources:

1. Schroders. ' Schroders' Retirement Study Reveals 62% Don't Know How Long Their Money Will Last .' 20 May 2025.

2. York, Erica; Durante, Alex. ' Trump Tariffs: Tracking the Economic Impact of the Trump Trade War .' Tax Foundation, 2 Jun. 2025.

3. Vanguard. ' More boomers prepared for retirement, but gaps persist .' 17 Jun. 2024.

4. Senior Citizens League. ' Cost-of-Living Adjustment for 2025 Announced at 2.5% .' 10 Oct. 2024.

5. Constantino, Annika Kim. ' Trump's plan to slash drug prices may struggle to get off the ground - here's what to know .' CNBC, 12 May 2025.

Other resources:

Kramer, Michael J. 'The Impact of Inflation on Retirement Savings.' Forbes , 10 Jan. 2024, pp. 5-7.

Brown, Linda. 'Healthcare Inflation and Retirees: Managing Rising Medical Costs.' The Wall Street Journal , 23 Mar. 2024, pp. 22-24.

Williams, Sarah. 'Social Security, COLA, and the Economic Impact of Inflation.' The Senior Citizens League , 15 Feb. 2024, pp. 12-14.

Sanders, Tom. 'Tariffs and Their Impact on Retirees' Spending.' The Tax Foundation , 5 Nov. 2023, pp. 9-11.

Johnson, Mark. 'The Financial Planning Crisis for Arconic Retirees.' Bloomberg Businessweek , 25 Jan. 2024, pp. 30-32.

What retirement benefits and options are available to employees of Arconic Corporation under the Arconic Corp. Pension Plan A, and how do these benefits change based on factors such as age, service length, and retirement category? Employees of Arconic Corporation should understand their eligibility requirements for normal retirement, early retirement, and disability benefits as outlined in the company's pension plan documentation.

The Arconic Corp. Pension Plan A provides retirement benefits based on a formula that considers average earnings and service length, with normal retirement eligibility at age 65 and at least five years of service. Early retirement is available at age 55 with 10 years of service, with benefits reduced based on actuarial assumptions. Disability benefits are available after 10 years of service, and preretirement death benefits offer 50% of accrued benefits to surviving spouses(Arconic Corporation_ Ja…).

How does the frozen state of benefits and service accruals impact current and future retirees at Arconic Corporation? Employees should evaluate how the freeze, effective April 1, 2018, affects their retirement planning and what measures they can take based on their individual circumstances to optimize their retirement benefits.

The frozen state of benefits and service accruals, effective April 1, 2018, means no new service credits or compensation increases are factored into pension calculations for current employees. This freeze affects retirement planning as employees must now rely on frozen benefits and other savings plans to meet retirement needs. It’s important for employees to reassess their financial goals and consider additional investments to optimize retirement benefits(Arconic Corporation_ Ja…).

In what ways can Arconic Corporation employees ensure they meet the requirements for spousal benefits outlined in the pension plan, especially regarding preretirement and postretirement scenarios? Understanding the specifics of eligibility and benefits, such as the surviving spouse benefit calculations, is crucial for employees planning for retirement.

To ensure eligibility for spousal benefits, employees need to meet certain requirements. Preretirement surviving spouse benefits require at least five years of service, and postretirement spousal benefits reduce the participant’s monthly benefit by 5%, with 50% of the reduced amount paid to the spouse if the participant dies first. Employees should understand these provisions to plan for their family’s financial security in retirement(Arconic Corporation_ Ja…).

What are the implications of the actuarial assumptions used by Arconic Corporation in valuing its pension obligations, and how do these assumptions affect the funding of the retirement plan? Arconic Corporation employees should examine how changes in interest rates and mortality tables influence the company's ability to meet its pension obligations.

Actuarial assumptions used in Arconic Corp.’s pension valuations, such as interest rates and mortality tables, directly impact the funding of retirement plans. Changes in these assumptions can affect the pension plan’s obligations and the amount of required contributions, making it important for employees to understand how these factors influence the stability and sufficiency of their retirement benefits(Arconic Corporation_ Ja…).

Can you explain the process by which Arconic Corporation employees can appeal decisions related to their pension benefits, and what support does the company provide during this process? Understanding the proper channels for appeals and the types of documentation required can be vital for employees facing issues with their pension benefits.

Employees can appeal pension benefit decisions through Arconic Corporation’s formal process, which includes submitting an appeal with supporting documentation. The company provides guidelines on what documentation is required, and employees should follow these closely to ensure their case is reviewed thoroughly. The support provided can include detailed responses to clarify benefit calculations and decisions(Arconic Corporation_ Ja…).

What resources are available to Arconic Corporation employees to help them make informed decisions about their retirement benefits, and how can they access these resources efficiently? Employees should know where to find comprehensive materials and support services concerning their retirement plans.

Arconic Corporation offers various resources to assist employees in making informed decisions about their retirement benefits. Employees can access comprehensive plan documents, financial planning tools, and counseling services through the company’s HR department and retirement plan administrators to ensure they fully understand their options(Arconic Corporation_ Ja…).

How does the Arconic Corporation define "average earnings" for calculating retirement benefits, and what methodologies are in place to ensure accuracy in these calculations? Understanding the basis for average earnings will allow employees to better project their pension benefits and prepare for retirement.

Average earnings, used in calculating retirement benefits, are defined as the average of the five highest consecutive calendar years of compensation within the last ten years for most participants. For certain participants, different rules apply based on service and plan conditions. Employees can review their earnings history to ensure accurate calculations and projections for retirement planning(Arconic Corporation_ Ja…).

What criteria does Arconic Corporation use to determine eligibility for deferred vested benefits, and how can employees maximize their advantages in this area? Employees need to be aware of the vesting schedule and how to plan for potential career transitions while maintaining their benefits.

Eligibility for deferred vested benefits in Arconic Corporation’s plan requires five years of service, and benefits can commence as early as age 55, with reductions based on actuarial calculations. Employees should plan career transitions carefully to maximize their vested benefits, especially when considering leaving the company before retirement(Arconic Corporation_ Ja…).

How can Arconic Corporation employees prepare for the potential tax implications of their pension benefits upon retirement, especially in light of IRS regulations for 2024? Being informed about tax strategies related to retirement income can significantly enhance retirees' financial wellbeing.

Employees preparing for retirement should understand the tax implications of pension benefits, particularly in light of IRS regulations for 2024. Strategies such as tax deferral and proper timing of distributions can help minimize the tax burden on retirement income, significantly enhancing financial outcomes(Arconic Corporation_ Ja…).

What contact methods does Arconic Corporation provide for employees wishing to learn more about their pension plan details, and how can employees best utilize these methods to get their queries resolved? Understanding the effective ways to communicate with the company for assistance is key for employees navigating their retirement benefits.

Arconic Corporation provides multiple contact methods for pension-related inquiries, including direct access to HR representatives and pension plan administrators. Employees are encouraged to utilize these resources effectively by preparing questions in advance and keeping detailed records of their communications for follow-up and clarity(Arconic Corporation_ Ja…).