pjm-7
Recycles dryer sheets
I was cleaning out some old boxes this morning and came across some financial planning, investing information that I had stored away. The shocker was a Retirement Income Work Sheet that was put out by Franklin Mutual Funds in 1986.
There was a Inflation Table (I will condense).
Age Year of Retirement Inflation
Now at age 65 Factor
60 1991 1.34
55 1996 1.79
50 2001 2.40
40 2011 4.29
35 2016 5.74
30 2021 7.69
25 2026 10.29
A. How much income will you need each month if you were to retire today?
B. Enter the inflation factor from the table for your year of retirement.
C. Multiply A by B. Assuming an average 6% rate of inflation, this monthly income, at retirement, will be approximately the same as what you would need if you were to retire today.
I know my budget back in the mid-1980's was about $2000/month. Using the factor above for 2016 of 5.74 results in a monthly budget of $11,480 ($2000 x 5.74). Holy Smokes!!!! I ER'd last year and my "basic" budget is still about $2000/month (annual budget is a bit more for one-time projects, etc.)
If people ever wonder if the financial industry wants you to "over save" (or buy way more life insurance than you would ever need) here is proof of some scare tactics.
There was a Inflation Table (I will condense).
Age Year of Retirement Inflation
Now at age 65 Factor
60 1991 1.34
55 1996 1.79
50 2001 2.40
40 2011 4.29
35 2016 5.74
30 2021 7.69
25 2026 10.29
A. How much income will you need each month if you were to retire today?
B. Enter the inflation factor from the table for your year of retirement.
C. Multiply A by B. Assuming an average 6% rate of inflation, this monthly income, at retirement, will be approximately the same as what you would need if you were to retire today.
I know my budget back in the mid-1980's was about $2000/month. Using the factor above for 2016 of 5.74 results in a monthly budget of $11,480 ($2000 x 5.74). Holy Smokes!!!! I ER'd last year and my "basic" budget is still about $2000/month (annual budget is a bit more for one-time projects, etc.)
If people ever wonder if the financial industry wants you to "over save" (or buy way more life insurance than you would ever need) here is proof of some scare tactics.