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View Poll Results: What inflation rate is closest to the one you are you using for 2007?
<1% 0 0%
1% 1 2.04%
1.5% 0 0%
2% 3 6.12%
2.5% 3 6.12%
3% 15 30.61%
3.5% 9 18.37%
4% 7 14.29%
4.5% 2 4.08%
5% 4 8.16%
5.5% 0 0%
6% 3 6.12%
>6% 2 4.08%
Voters: 49. You may not vote on this poll

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What Inflation Rate Will You Use?
Old 01-16-2008, 09:18 AM   #1
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What Inflation Rate Will You Use?

For those of you SWRers who increase your annual spending by inflation each year, what kind of a raise are you giving yourself this year?

-- Trying to fix the poll -- may delete and repost.
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Old 01-16-2008, 09:22 AM   #2
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Al, I'm going with a flat 3%. Some categories have obviously gone up way more than that, but in those areas (like gas for the cars) we'll make up for the more than 3% jump by cutting back a little in another area or two. Or three.
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Old 01-16-2008, 09:27 AM   #3
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I don't give myself an inflation adjusted raise. I do the straight 4% (actually 3%) of portfolio value at end of the year - which means I sometimes get a pay cut.

Audrey
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Old 01-16-2008, 09:35 AM   #4
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Al, now both polls are working. I'll see if I can get the other one deleted and leave this one.
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Old 01-16-2008, 09:39 AM   #5
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Thanks, REW.
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Old 01-16-2008, 10:07 AM   #6
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What about those of us who don't inflation adjust? We might be a large group.

Audrey
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Old 01-16-2008, 10:12 AM   #7
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Quote:
Originally Posted by audreyh1 View Post
What about those of us who don't inflation adjust? We might be a large group.

Audrey
Isn't there a <1% option on the poll? Seems awfully close to zero adjustment, or at least close enough for me.
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Old 01-16-2008, 10:50 AM   #8
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Quote:
Originally Posted by REWahoo View Post
Isn't there a <1% option on the poll? Seems awfully close to zero adjustment, or at least close enough for me.
I disagree. It's not an inflation adjustment at all. In any case, 0% doesn't work, because that implies you are taking out the same as the prior year which would not be true.

There needs to be a "don't inflation adjust" option IMO.

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Old 01-16-2008, 10:54 AM   #9
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OK, I get it.
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Old 01-16-2008, 12:45 PM   #10
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Quote:
Originally Posted by audreyh1 View Post
What about those of us who don't inflation adjust? We might be a large group.

Audrey
Don't vote or vote for the percentage you would hypothetically use if you did inflation adjust.

I think what T'Al's going after is what level of inflation do folks think they need to use to keep real spending constant if that is their strategy/goal.

Whether to inflation adjust or not is another subject and would be an interesting thread in itself.
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Old 01-16-2008, 12:49 PM   #11
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I do the straight 4% also .
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Old 01-16-2008, 02:09 PM   #12
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I'm going to use this to help me decide what value I will use.

I noticed that with FireCALC, if I use CPI, I get a higher success rate than if I use 3% (On the spending models page).
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Old 01-16-2008, 02:39 PM   #13
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I am not making withdrawals however, if I were I would plan on an inflation rate closer to 6%. I would also hope to come in under budget. While I agree with ReWahoo that I think my spending will go up somewhere in the 3% range, the CPI was 4.1% and I think that is low and does not take into the full effect what energy is going to do to the price of food and other items. So I would plan on a larger number and be pleasantly pleased if it came in lower.
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Old 01-16-2008, 03:13 PM   #14
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FYI,

Here's the "official rate" (just updated for 2007).

Historical Inflation data from 1914 t the present

Don't complain to me about the numbers. Everybody has their "own rate", depending on where they live, and their lifestyle (along with "time of life").

- Ron
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Old 01-16-2008, 07:41 PM   #15
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I've been doing the SS version of CPI for three years so far. 2008 will be the fourth. So far, so good. 2.3% this year.

Dan
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