"Clearly older Americans experience a higher degree of inflation over time - outpacing the general inflation measure as well as the rate at which Social Security increases over time."
Health care cost inflation has been about double the general inflation rate for some time, but is starting to moderate now. Personally, I think it will continue to diminish until it isn't too much higher than the general rate, but I'm a lousy forecaster.
Good overview. Slide 11 is eye-opening:
The next slide indicates it's primarily due to health care costs. Everything comes back to that, doesn't it? Success seems to hinge on how well we handle this particular cost category, but we have only so much control over it.
Studies show that discretionary spending tends to drop as one gets older. Looks like what's saved there is likely to be eaten up by health care. That's why when I use FIRECalc I never click on Bernicke's Reality Retirement Plan, which reduces spending with age.
But look at slide #23. Bernicke's studies showed the same thing. Spending declines with age. There are always anecdotes to show otherwise, but for the population as a whole, this seems to be true.
I like slide 6. Anyone check the math on slide 15?
Health care cost inflation has been about double the general inflation rate for some time, but is starting to moderate now. Personally, I think it will continue to diminish until it isn't too much higher than the general rate, but I'm a lousy forecaster.