Two factors are impacting my planning (54 with a target of 2-4.5 years): low returns with inflation present (which hopefully is a temporary phenomena) and the disappearing COLA (as seen in the Rhode Island adjustment and can be predicted for other for other near bankrupt retirement plans). The second factor has a significant impact long term.
In the past I have forecast a comfortable retirement assuming that inflation is offset by conservative returns and COLA adjustments (Navy Reserve 34 year retirement starting at 60, SocSec). Now if I assume that instead of zero portfolio growth, I see a net loss to inflation of say -3%, then the worth of my portfolio will be cut in half in 24 years without considering a single withdrawal.
Is anyone else forecasting long term losses due to the removal of COLA and how are you factoring it into your plans? Thanks.
In the past I have forecast a comfortable retirement assuming that inflation is offset by conservative returns and COLA adjustments (Navy Reserve 34 year retirement starting at 60, SocSec). Now if I assume that instead of zero portfolio growth, I see a net loss to inflation of say -3%, then the worth of my portfolio will be cut in half in 24 years without considering a single withdrawal.
Is anyone else forecasting long term losses due to the removal of COLA and how are you factoring it into your plans? Thanks.