Guard against inflation in retirement THANKS to inflation, workers will be able to sock away more in retirement funds in 2015. BUT, also thanks to inflation, retirement is getting costlier. So while you're congratulating yourself for the gains in your super fund this year, be aware that they might not be enough to cover your retirement expenses. That's the conclusion of recent data from investment firm BlackRock, which calculates what it calls CoRI indexes that track retirement savings against inflation targets, longevity expectations, interest rate changes and other measures. Median retirement savings among 55-year-olds rose about 16 per cent in the year ended September 30 but the projected cost of retirement jumped by about 18 per cent, according to BlackRock. Every $1 of future retirement income for those 55-year-olds, based on current life expectancy, takes savings today of more than $15, the company said. A year ago, the figure needed was about $12. "That's a pretty dramatic change," said Chip Castille, head of BlackRock's US Retirement Group. As interest rates come down, the cost of providing retirement income goes up. There was less volatility for investors in their 60s because they have a shorter time horizon to retirement. The indexes are constructed to deliver liability-driven results, meaning that a target income number is matched to fixed-income investments. And in a low interest rate environment, it takes more invested dollars to meet future income needs. The company sells mutual funds based off the indexes that are named for the target year when an investor turns 65. They are predominantly invested in long-duration and corporate bonds and derivatives - somewhat similar to an annuity concept, without the cost or the guarantees of an annuity. "I think the data show it's important to concentrate not only on the value of your investments, but on how they move" in relation to factors such as inflation, Castille said.