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Inflation generally doesn't hurt the value of stocks in a 401(k). You still own the same percentage of the underlying public corporations. Inflation only hurts your bond holdings. This is one reason why it's best to keep at least some of your retirement fund assets in stocks even as you approach retirement age rather than shifting entirely too bonds.

TIPS also provide a way to hedge against inflation in retirement funds.

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Inflation does hurt the underlying companies, and thus stocks are not immune.

Except in cases with extremely high inflation most contracts are not inflation adjusted. By the time a company is paid the merchandise sold is worth significantly more in fiat terms. In high inflation an entity is loathe to trade assets for dollars and so the economy will slow.

Your point is generally false as long as inflation remains at a reasonable level (no hyperinflation). You can chart out stock market index returns versus inflation if you don't believe me.

I was speaking of relatively high inflation (>10%). The fed has been extremely good at keeping inflation stable so we have not seen this in a long time.

This is not a criticism of current fed policy with respect to its relatively low inflation targets. While the effects I mentioned still occur, they are vastly outweighed by other concerns at low inflation levels.

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