inflation

claire · 08-24-2006, 02:36 PM

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 .....

**Rich_in_Tampa** · 08-24-2006, 02:38 PM

Have you used Firecalc? It handles that for you. And don't forget taxes

.

claire · 08-24-2006, 02:39 PM

thanks Rich, i will give it a go!

mathjak107 · 08-26-2006, 03:11 AM

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....

. . . Yrs to Go · 08-26-2006, 09:26 AM

Quote:

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......

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.

Sam · 08-26-2006, 09:37 AM

Quote:

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.

So true. 10 to 15K will afford you a comfortable life in Southeast Asia. Central America too.

astromeria · 08-26-2006, 10:43 AM

Quote:

Originally Posted by 3 Yrs to Go

5% on 200,000-300,000 is $10,000-$15,000 per year!

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.

**Martha** · 08-26-2006, 10:51 AM

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.

mathjak107 · 08-26-2006, 01:32 PM

Quote:

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.

exactly that...it needs the social security added in...

claire · 08-28-2006, 05:48 AM

Well thats it then im not going to be able to ER in 4 years time, it will be more like 40

08-24-2006, 02:36 PM	#1
claire Recycles dryer sheets Join Date: Mar 2006 Posts: 90	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 .....

08-24-2006, 02:38 PM	#2
Rich_in_Tampa Moderator Join Date: Feb 2006 Location: Tampa Posts: 5,603	Re: inflation Have you used Firecalc? It handles that for you. And don't forget taxes . __________________ Rich Tampa, FL (10% retired) As if you didn't know..If the above message happens to contain medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any medical purpose whatsoever. Consult your own doctor for all medical advice.

08-24-2006, 02:39 PM	#3
claire Recycles dryer sheets Join Date: Mar 2006 Posts: 90	Re: inflation thanks Rich, i will give it a go!

08-26-2006, 03:11 AM	#4
mathjak107 Thinks s/he gets paid by the post Join Date: Jul 2005 Posts: 2,396	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....

08-26-2006, 10:51 AM	#8
Martha Moderator Join Date: Feb 2004 Location: minnesota Posts: 9,335	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. __________________ . Do not rely on the information provided--my posts are not to be taken as legal advice. Needless to say you must consult with your legal representative. I am not responsible for errors. If I offended you with cya I apologize. If I did not, I tried.

08-28-2006, 05:48 AM	#10
claire Recycles dryer sheets Join Date: Mar 2006 Posts: 90	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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