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NiSource Employees: Inflation Worries Impacting Retirement Savings

'NiSource 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.

'NiSource 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 NiSource.

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 NiSource 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 NiSource 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 NiSource 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 NiSource 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 NiSource 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 NiSource—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 NiSource. 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 NiSource, 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. NiSource 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 NiSource 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 NiSource. 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 NiSource Retirees.' Bloomberg Businessweek , 25 Jan. 2024, pp. 30-32.

As an employee of National Grid, what are the key eligibility criteria for participating in the Pension Plan specifically for Niagara Mohawk Power Corporation employees? How might these criteria impact your personal retirement planning and the benefits you expect to receive upon retirement from National Grid?

Eligibility Criteria for Niagara Mohawk Pension Plan: Employees of Niagara Mohawk Power Corporation who are represented by Local Union 97 of the IBEW and work at least 20 hours per week or accumulate 1,000 hours in a Pension Plan year are eligible. Participation begins automatically on the first day of employment. These criteria directly impact retirement planning by determining when employees begin accruing pension benefits and how much they will receive at retirement(National_Grid_2023_Niag…).

Within the framework of the National Grid Pension Plan, how does the cash balance formula work in calculating retirement benefits, and what implications does this have for employees of Niagara Mohawk Power Corporation when considering their long-term financial outlook?

Cash Balance Formula: The National Grid Pension Plan for Niagara Mohawk employees uses a cash balance formula that provides monthly pay-based credits (starting at 4% and increasing with years of service) and interest credits. These accumulate in a hypothetical account, growing until retirement, allowing employees to track their retirement benefits much like a savings account. This formula impacts financial outlook by providing predictable growth tied to service and pay(National_Grid_2023_Niag…).

For employees at National Grid, what are the specific rights and options available during the pension benefit application process? How do these rights protect the interests of individual employees and ensure they receive fair treatment under the Niagara Mohawk Pension Plan?

Pension Benefit Application Process: National Grid employees must apply for their pension benefits by submitting the required forms at least 90 days before retirement. Spousal consent is required if opting for any form of payment other than the default. This ensures employees understand and select the best payment option for their circumstances, protecting their interests under the Niagara Mohawk Pension Plan(National_Grid_2023_Niag…).

Given the different types of credits that contribute to the pension benefit for employees of National Grid, how are Pay-based Credits and interest credits calculated? What strategies might Niagara Mohawk Power Corporation employees employ to maximize these credits before retirement?

Pay-based and Interest Credits Calculation: Pay-based credits are determined by years of service, starting at 4% of pay and increasing to 8% after 20 years. Interest credits are based on an annual interest rate tied to the Treasury securities and corporate bond rates. Employees can maximize these credits by continuing to work and contributing to their pension balance(National_Grid_2023_Niag…).

How do pension benefits work for Transition Group Employees specifically within National Grid's framework, and what unique provisions apply to them under the Pension Plan as compared to regular employees of Niagara Mohawk Power Corporation?

Pension Benefits for Transition Group Employees: Transition Group Employees under the National Grid Pension Plan have benefits calculated using both the former final average pay formula and the cash balance formula, with the greater benefit being paid out. This differs from regular employees who only receive benefits calculated under the cash balance formula(National_Grid_2023_Niag…)(National_Grid_2023_Niag…).

What are the repercussions for National Grid employees in terms of benefit loss or limitation if they have not met the Vesting requirements under the Niagara Mohawk Pension Plan? How can understanding these repercussions influence an employee's decision-making regarding their career and retirement?

Impact of Vesting Requirements: Employees must complete three years of service to become vested in the Niagara Mohawk Pension Plan. If they leave before vesting, they lose all accrued pension benefits. Understanding vesting requirements is crucial for career and retirement planning, as it ensures employees retain their pension benefits if they meet the criteria(National_Grid_2023_Niag…).

As a current employee at National Grid, what does the termination of the Pension Plan imply for accrued benefits under the Niagara Mohawk Pension Plan? Specifically, how do federal protections through ERISA and the Pension Benefit Guaranty Corporation come into play for employees seeking assurance regarding their retirement funds?

Termination of Pension Plan and Federal Protections: If the Niagara Mohawk Pension Plan is terminated, accrued benefits are protected by ERISA and insured by the Pension Benefit Guaranty Corporation (PBGC). Employees can feel assured that their benefits will be secured up to the PBGC's limits in case of plan termination(National_Grid_2023_Niag…).

How does the National Grid Pension Plan accommodate the unique situations of employees during times of disability or military service, and what steps should Niagara Mohawk Power Corporation employees take to ensure their benefits continue during these periods?

Disability and Military Service: Niagara Mohawk employees receive service credits during periods of disability or military leave, ensuring continuous pension accrual. Employees should ensure their disability or military status is properly documented with the company to avoid interruptions in their pension benefits(National_Grid_2023_Niag…).

When considering the various forms of pension payments available to retirees from National Grid, what are the potential advantages and disadvantages of choosing an annuity versus a lump-sum payment for employees from Niagara Mohawk Power Corporation?

Annuity vs. Lump-Sum Payment: Retirees at National Grid have the option to choose between an annuity, providing a steady income for life, or a lump-sum payment. The annuity provides financial stability, while a lump sum offers flexibility. The choice depends on individual financial needs and retirement goals(National_Grid_2023_Niag…).

For those looking to gain further clarity on the nuances of the Niagara Mohawk Pension Plan, what are the most effective ways for employees to contact National Grid for assistance? How can engaging with the Pension Service Center enhance an employee's understanding of their benefits and rights?

Contacting National Grid for Pension Assistance: Employees seeking more information about their Niagara Mohawk Pension Plan can contact the National Grid Pension Service Center or use the online pension modeler. Engaging with the Pension Service Center provides personalized guidance, helping employees understand their benefits and make informed decisions(National_Grid_2023_Niag…).