(AP) – Inflation can be scary for retirees. True, Social Security provides inflation increases in line with the consumer price index, or CPI. But any portfolio income, save allocations to inflation-protected bonds, isn’t inherently inflation-protected. And if inflation occurs early in your retirement, those higher prices will do more damage throughout retirement, potentially jeopardizing your portfolio’s ability to last.

To gauge your inflation risk and how strenuously you need to defend against it, ask yourself three questions.

1. Where are you spending?
You may not have stopped to consider it before, but CPI is meant to capture the spending experiences of all consumers. Categories like housing receive the biggest weighting in the CPI calculation, while recreation and apparel get smaller weightings.

But a retired older adult who no longer has a mortgage will likely have smaller housing-related outlays, as a percentage of household spending, than the general population, but healthcare expenditures may well be a bigger share of the budget.

Given those variations, it can be helpful to use the CPI’s weightings as a starting point for understanding inflation’s impact on your household. But you can get closer to a personal inflation rate by looking at your actual spending in each of the major categories alongside the inflation we’re seeing in those areas.

2. How much of your income is inflation-adjusted?
Next look at how much of your cash flow needs are coming from income sources that have some inflation insulation.

Social Security is an ideal income source because individuals receive income adjustments that track CPI. Some public-sector pensions also track CPI or offer inflation adjustments that are even more generous. If you have a fixed annuity with an inflation rider, you’ll also see your income adjusted by a fixed percentage per year, though it won’t perfectly track CPI. (You can’t buy an annuity whose payouts are linked to CPI today, unfortunately.)

On the portfolio side, I bonds and Treasury Inflation-Protected Securities are the only investments that are specifically structured to protect against inflation. That’s why building a laddered portfolio of TIPS bonds, with one to mature in each year of retirement, can be a straightforward way to address inflation risk with your portfolio withdrawals. You could invest enough in the TIPS ladder to deliver inflation-adjusted income to cover any fixed living expenses, above and beyond what you can address with Social Security and/or a pension.

Other portfolio constituents don’t offer as precise a structural defense against inflation, but some asset types do have a good track record of gaining during inflationary periods. Commodities-tracking investments, quite intuitively, top the list: As Amy Arnott notes in this article, they gained ground in all six of the inflationary periods she examined. Stock returns, meanwhile, have been inconsistent or poor in inflationary periods. However, they’ve done a phenomenal job of beating inflation over time. Inflation has run at about a 3% rate since the late 1920s, while equities have gained about 10% on a nominal basis. Thus, a way to think about stocks is that they’re a long-run defense against inflation but won’t necessarily protect your purchasing power year in and year out.

At the other extreme, fixed-income sources that deliver income in nominal/noninflation-adjusted terms, whether cash or bonds, will tend to be vulnerable in inflationary periods; rising prices have the potential to gobble up all of your income. There are still good reasons to hold cash and bonds in your portfolio— ballast in recessionary environments, for one thing—but their vulnerability in inflationary environments is a major reason not to overdo them.

3. Where are you in your retirement?
Finally, consider where you are in your retirement. As Jamie Hopkins and others have pointed out, high inflation early in retirement is just another form of sequence risk, like bad market returns early in retirement. The reason is that if inflation flares up early in someone’s retirement period, those higher costs will elevate costs through the whole retirement period; deflation is very rare.

In our retirement spending research, we found that those who started retirement at the beginning of a period with unusually high inflation would have a more difficult time sustaining spending for a full 30-year period. To be clear, not every person who retires into a high-inflation environment will run out of money: There have been historical periods where market returns have been strong enough to offset the drag of higher costs. However, because you can’t know how the market will behave as retirement unfolds, it’s wise to curtail spending (to the extent that you can) if inflation happens to flare up early in your retirement. Amy has written extensively about various dynamic withdrawal strategies that can help improve retirees’ odds of success in varying market conditions and boost their lifetime portfolio income.