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Rising living costs have been a persistent concern for Americans. President Donald Trump says the blame lies squarely with his predecessor — and argues his administration is turning things around.

“We inherited the highest prices ever, and we’re bringing them down,” Trump said at a December 2025 rally in Mount Pocono, Pennsylvania (1).

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“We’re getting inflation — we’re crushing it,” he added. “I mean, the only thing that is really going up big, it’s called the stock market and your 401(k).”

Trump doubled down on these assertions in this year’s State of the Union address, saying his administration’s policies are “rapidly ending” high prices: “Those prices are plummeting downward,” he claimed (2).

There’s some evidence to support his remarks. Inflation has cooled meaningfully from its peak: The U.S. consumer price index rose 2.4% over the year ending January 2026, well below the 9.1% surge recorded in June 2022 (3).

Still, costs remain high. Since January 2020, the price of groceries has risen about 30%, the cost of electricity has surged 41% and the cost of car insurance is up by 56%, according to Bloomberg (4).

In short, Americans are still feeling the “affordability squeeze” — in spite of cooling inflation.

So, what’s going on here?

Here’s a closer look at inflation in 2026 — and how you can capitalize on it.

It’s worth pointing out that despite inflation cooling, it still remains above the Federal Reserve’s 2% target. That means it’s still technically higher than the Fed wants it to be.

And they know it. In its latest statement, the Federal Open Market Committee, which is the monetary policymaking body of the Federal Reserve, said that “inflation remains somewhat elevated (5).” More importantly, the Fed paused its recent streak of interest rate cuts, with policymakers also cautioning that the fight against inflation isn’t over.

The war in Iran further complicates the situation. The resulting rise in gas and energy prices has led to concerns that the conflict may prolong inflation and further delay interest rate cuts — though some economists say it’s too soon to gauge the impact (6).

However, Trump has pointed to paychecks as a sign of his administration’s success.

“You’re getting lower prices, bigger paychecks … you’re getting much higher wages,” he said at the rally in Pennsylvania (1).

Wages are indeed rising, though perhaps not at the pace implied. According to the U.S. Bureau of Labor Statistics, Americans’ wages and salaries increased 3.3% over the 12 months ending in December 2025 — roughly keeping pace with inflation, but not dramatically outpacing it (7).

But Trump’s strongest argument was in the markets, as gains flowed through to retirement accounts last year. According to Fidelity, the average 401(k) balance climbed 9% over one year to $144,400 in Q3 of 2025 — an all-time high (8).

Even that comes with some caution, considering both the S&P 500 and Nasdaq Composite have experienced a slight pullback year-to-date, likely due in part to escalating geopolitical tensions. This matters because 401(k)s are typically heavily invested in these funds, and are therefore susceptible to volatility.

The good news? History shows that investors don’t have to rely on perfect policy or ideal economic conditions to protect their purchasing power.

Across cycles — and regardless of who occupies the White House — savvy investors have found ways to shield themselves from inflation’s bite.

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When it comes to preserving wealth and fighting inflation, few assets have stood the test of time like gold.

Its appeal is simple: Unlike fiat currencies, the yellow metal can’t be printed at will by central banks. It’s not tied to any one country, currency or economy, and in times of economic turmoil or geopolitical uncertainty, investors often flock to it — driving prices higher.

Over the past 12 months, the price of the precious metal has surged by nearly 80% (9).

Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has repeatedly emphasized gold’s importance in building a resilient portfolio.

“People don’t have, typically, an adequate amount of gold in their portfolio,” Dalio told CNBC in 2025 (10). “When bad times come, gold is a very effective diversifier.”

JPMorgan Chase CEO Jamie Dimon has also struck a bullish tone, suggesting that in the current environment, gold could “easily” rise to $10,000 an ounce (11).

If you’re looking for a way to invest in gold that can also provide significant tax advantages, you could consider opening a gold IRA with the help of Thor Metals.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of gold — making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties. After all, unlike fiat currency, gold can’t be printed at will during a period of high inflation or a market collapse.

To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases. Just keep in mind that gold is often best used as one part of an otherwise well-diversified portfolio.

Like gold, real estate has also proven to be a powerful hedge against inflation.

The reason is simple: When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.

The present is no exception. Over the past five years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped nearly 40%, reflecting strong demand and limited housing supply (12).

Of course, high home prices can make buying a home more challenging, especially with mortgage rates still elevated. And being a landlord isn’t exactly hands-off work — managing tenants, maintenance and repairs can quickly eat into your time (and returns).

But there’s good news on the housing horizon: You don’t need to buy a property outright — or deal with leaky faucets — to invest in real estate today. Real estate investment platforms like Arrived offer an easier way to get exposure to this income-generating asset class.

Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning any passive income without the extra work that comes with being a landlord. Plus, when or if the property sells, you get a cut too.

To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.

If diversifying into multifamily and industrial rentals appeals to you, you could also consider investing with Lightstone DIRECT, a new investing platform from the Lightstone Group, one of the largest private real estate companies in the country with over 25,000 multifamily units in its portfolio.

Since they eliminate intermediaries — brokers and crowdfunding middlemen — accredited investors with a minimum investment of $100,000 can gain direct access to institutional-quality multifamily opportunities. This streamlined model can help reduce fees while enhancing transparency and control.

And with Lightstone DIRECT, you invest in single-asset multifamily deals alongside Lightstone — a true partner — as Lightstone puts at least 20% of its own capital into every offering. All of Lightstone’s investment opportunities undergo a rigorous, multi-stage review before being approved by Lightstone’s Principals, including Founder David Lichtenstein.

How it works is simple: Just sign up with your email, and you can schedule a call with a capital formation expert to assess your investment opportunities. From here, all you have to do is verify your details to begin investing.

Founded in 1986, Lightstone has a proven track record of delivering strong risk-adjusted returns across market cycles with a 27.6% historical net IRR and 2.54x historical net equity multiple on realized investments since 2004. All told, Lightstone has $12 billion in assets under management — including in industrial and commercial real estate.

As such, even if multifamily rentals don’t appeal to you, Lightstone could still serve you well as an investment vehicle for other real estate verticals.

Get started today with Lightstone DIRECT and invest alongside experienced professionals with skin in the game.

Aside from traditional assets like gold and real estate, what other options do you have for hedging against inflation?

Trump’s claim that “the only thing that is really going up big, it’s called the stock market and your 401(k)” may sound like a quip, but many market experts still agree that stocks can play a role in protecting portfolios during periods of inflation.

For example, Mike Wilson, chief investment officer for Morgan Stanley, recently told Reuters that in the current environment, “high-quality equities and gold are the best hedges (13).” That’s because when companies are able to raise prices to offset rising costs, stocks can serve as an inflation hedge, allowing their revenues and earnings to grow alongside inflation.

Of course, not all stocks are the same. For investors who don’t want the pressure of correctly picking winners and losers, there’s a simpler way to gain exposure to high-quality companies — one endorsed by legendary investor Warren Buffett.

“In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett has famously stated (14).

The beauty of this approach is in its simplicity: It gives investors exposure to 500 of America’s largest companies across a wide range of industries, providing instant diversification without the need for constant monitoring or active management. It provides consistency.

Platforms like Robinhood are designed to make investing simpler and more approachable.

If you prefer a more hands-on approach, you can also buy and sell individual stocks, fractional shares and options (for qualified traders) — backed by 24/7 support. Stocks, ETFs and their options trades are commission-free.

With access to popular ETFs like the Vanguard S&P 500, you can build diversified exposure without needing to pick individual stocks.

The platform also offers both a traditional IRA and a Roth IRA, so you can choose the tax strategy that fits your retirement plan.

With its recurring investment feature, you can set up automatic investments of your preferred fractional shares, stocks and ETFs on your own schedule.

Over time, this helps make investing a habit and steadily grows your portfolio.

Earn up to 3% on eligible account transfers to a taxable Robinhood account through March 25th. Risks and terms apply. Robinhood Gold ($5/mo) subscription may apply.

Finally, Trump’s claim about “higher wages” leaves out a large segment of the population: retirees who are no longer earning a paycheck. And for them, inflation can hit especially hard.

As you get closer to retirement, every dollar starts to matter more. Rising health care costs, uncertain markets and fixed incomes can make it harder to stretch your savings — especially if you’re trying to plan for decades ahead.

That’s why you might want to consider joining senior-focused organizations like AARP for discounts on almost everything — from prescriptions and dental plans to travel, entertainment and insurance.

As one of the most trusted organizations for older Americans, AARP not only offers money-saving perks, but they can also help you make informed financial and health decisions. AARP members get access to guides that can help you make the most of Social Security, choose the right Medicare plan and uncover other government benefits — potentially saving you thousands.

Sign up with AARP today and get 25% off your first year.

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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

@WhiteHouse (1); The New York Times (2); U.S. Bureau of Labor Statistics (3), (7); Bloomberg (4); Board of Governors of the Federal Reserve System (5); Forbes (6); Fidelity (8); GoldPrice (9); @CNBCInternationalLive (10); @fortune (11); S&P Global (12); Reuters (13); CNBC (14)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.