2 Replies Latest reply on Apr 14, 2011 12:41 PM by creinsch

    Report: Inflation & Retirement Planning

    creinsch
      http://myretirement.org/n/blogs/blog.aspx?webtag=tiaacrefntbk&entry=180

      This report would of been of more value if it contained some useful information.  All it is, is yet another survey showing that people are not planning for retirement wisely.  My plan does incorporate an allowance for inflation, even though federal and state government agencies continue to deny that inflation is affecting the cost of living.  The problem is that predicting inflation can be done with about the same confidence as predicting weather.  I used the long-term average (1913-2007: 3.42%) What are other people using for their inflation factor?
        • Re: Report: Inflation & Retirement Planning
          JerryD

          Without any basis like you have, I selected an inflation rate of 3.5% for my extensive spreadsheet that I use to project costs, investments, taxes, major purchases, etc. Having selected 3.5% for inflation, I have a goal of 8.5% return on investments resulting in a 5% real return as my ideal.

          Of course, an average inflation rate isn't too useful when we have an 18-20% rate like back in the early 1980's, as I recall, but it helps in one's planning. Thank you for validating my assumption.