Originally Posted by walkinwood
Going from a 3% to 4% is a 33% increase in the rate of inflation. That's a pretty huge jump to sustain for a 35 year period.
Another question to ask - does a big change in inflation like this invalidate all the other assumptions that Firecalc is making - ie. would our history have been the same if inflation was so much higher?
Since FireCalc uses historical data to prognosticate future returns, it seems (to me) only logical to do the same with inflation, so I've been using 3.25%, based on: Decade Inflation Chart
Studying the chart a bit, I do wonder about the likelihood
of our seeing inflation as high as that seen in the 191*s, or negative (as in the '20s & '30s), through the next 35-40 years
(?) given the Fed's ability/tools to influence interest rates.