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08-24-2006, 02:36 PM
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#1
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Recycles dryer sheets
Join Date: Mar 2006
Posts: 91
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inflation
The other day i had a shock because i realised that my ER plans/calculations had not allowed for inflation
silly as it sounds but i hadnt really thought about it or appreciated the implication of inflation on lump sum savings, we dont have any pensions or index linked investments
I suppose this means that we have to save even more which would take longer which would extend working life
sometimes there seems to be no end to this .....
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08-24-2006, 02:38 PM
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#2
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Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
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Re: inflation
Have you used Firecalc? It handles that for you. And don't forget taxes  .
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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08-24-2006, 02:39 PM
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#3
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Recycles dryer sheets
Join Date: Mar 2006
Posts: 91
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Re: inflation
thanks Rich, i will give it a go!
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08-26-2006, 03:11 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2005
Posts: 6,192
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Re: inflation
this is one of the biggest errors i see my co-workers and friends make all the time...they save up 2 or 300,000 and then figuring todays expenses tell me how they can live forever on it and invest it all in cd's to boot......they forget that by 24 years or so they need 2x the amount they are living on just to stay even....
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08-26-2006, 09:26 AM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Re: inflation
 Quote:
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Originally Posted by mathjak107
...they save up 2 or 300,000 and then figuring todays expenses tell me how they can live forever on it and invest it all in cd's to boot......
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Yikes, where do you live?? 5% on 200,000-300,000 is $10,000-$15,000 per year! Either you are living large in Southeast Asia or dumpster diving for dinner in "anywhere" USA.
__________________
Retired early, traveling perpetually.
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08-26-2006, 09:37 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 2,155
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Re: inflation
Quote:
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Originally Posted by 3 Yrs to Go
Yikes, where do you live??* 5% on 200,000-300,000 is $10,000-$15,000 per year!* Either you are living large in Southeast Asia or dumpster diving for dinner in "anywhere" USA.
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So true. 10 to 15K will afford you a comfortable life in Southeast Asia. Central America too.
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08-26-2006, 10:43 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Aug 2005
Posts: 1,375
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Re: inflation
Quote:
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Originally Posted by 3 Yrs to Go
5% on 200,000-300,000 is $10,000-$15,000 per year!
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But if you add Social Security at, say, another $10-15,000/year and maybe a small pension of $5000 on top, you're talking about $25-35,000, at age 62 anyhow.
__________________
You can't always get what you want, but if you try sometimes, you might find you get what you need.
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08-26-2006, 10:51 AM
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#8
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: inflation
I have a friend who is single, her children grown. She is in her mid 40s and makes about $22,000 a year. Not atypical in my city. I have been working with her on how to plan for retirement. We worked out a goal of saving about $150,000 so she could retire at 67. With social security, the possiblity of a reverse mortgage, she would do fine on the 150,000. Her savings rate is not at the level right now to get to her goal, but her house will be paid off in not many years and she can up her saving rate then.
She will be vulnerable to disaster, but she is planning and doing the best she can.
__________________
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No more lawyer stuff, no more political stuff, so no more CYA
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08-26-2006, 01:32 PM
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#9
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2005
Posts: 6,192
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Re: inflation
Quote:
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Originally Posted by astromeria
But if you add Social Security at, say, another $10-15,000/year and maybe a small pension of $5000 on top, you're talking about $25-35,000, at age 62 anyhow.
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exactly that...it needs the social security added in...
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08-28-2006, 05:48 AM
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#10
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Recycles dryer sheets
Join Date: Mar 2006
Posts: 91
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Re: inflation
Well thats it then im not going to be able to ER in 4 years time, it will be more like 40 
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