# How Inflation Can Affect Your Roth IRA Balance

By: [Team Stash](/content/learn/author/team-stash/index.html)  
Published: Feb 06, 2018  
•  Updated: Jun 09, 2026

#### In this article:
1. [**How Inflation Affects Your Roth IRA**](/content/learn/how-inflation-can-affect-your-roth-ira-balance/#how-inflation-affects-your-roth-ira/index.html)
2. [**How Inflation Affects Common Investments**](/content/learn/how-inflation-can-affect-your-roth-ira-balance/#how-inflation-affects-common-investments/index.html)

Do you depend on a Roth IRA to help fund your retirement?  
If so, you should know that even something as reliable as a [Roth IRA](/content/learn/what-is-a-roth-ira/index.html) isn’t impervious to market factors. One of the most important to know about is inflation.

## How Inflation Affects Your Roth IRA

A Roth IRA is a type of individual retirement account. It’s different than a [traditional IRA](/content/learn/traditional-vs-roth-ira/index.html). A traditional IRA allows you to contribute pre-tax dollars toward your retirement fund. A Roth is different, you fund it with money that you’ve already paid taxes on.

The [IRS can increase retirement contribution limits](/content/learn/roth-ira-complete-guide/index.html) based on inflation. The government agency will do this for 401Ks, IRAs and other retirement accounts so that people can put more money away so that their nest eggs have a better chance of keeping up with inflation.

## How Inflation Affects Common Investments

If you’re worried about inflation, you’ll want to understand how inflation impacts different types of the four most common investments:

- **Stocks:** When inflation goes up, [the price of stocks may go down](/content/learn/whats-causing-markets-to-drop/index.html). However, over the long-term, stocks may rebound after a period of adjustment.

- **Bonds:** Bonds are usually impacted more by inflation. While they offer fixed-price interest payments, the value of that interest is influenced by inflation. For example, a five-year bond may pay $300 every six months, but that $300 buys less as inflation goes up. This is why demand for bonds also drops when inflation goes up.

- **ETFs:** The same is true for ETFs, but ETFs often offer investors easy access to positions in commodities like gold, oil, and agricultural products. This could be considered an advantage as [commodities tend to do well when inflation is up](https://money.usnews.com/investing/articles/2016-08-19/how-to-hedge-against-inflation-with-commodities).

Combined with the unique advantages of a Roth IRA, ETFs may be part of an effective retirement planning strategy.