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Old 10-20-2015, 08:24 AM   #21
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 3,958
Let's list the reasons for making an inflation assumption:
1) I have a non-COLA'd pension
2) ??

I think the important assumption is the difference between investment returns and inflation. Historically, that has varied a lot.

In a planning worksheet, I'd rather assume 0% inflation, then enter my investment return as a "real" rate. If I had that pension, I would make an assumption about how fast it shrinks. Then my numbers make intuitive sense.

Note that if I own any TIPS, I've got a locked in differential (vs. the CPI). The 20 year yield today is about 1%.

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Old 10-20-2015, 02:05 PM   #22
Dryer sheet wannabe
Join Date: Sep 2015
Location: San Jose
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Wow, lots of well-informed people here! Thanks!

It's been a real exercise in learning for me...going from never retiring to possibly early retiring.

I appreciate all your help! Thanks!

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