Quote:
Originally Posted by walkinwood
Going from a 3% to 4% is a 33% increase in the rate of inflation. That's a pretty huge jump to sustain for a 35 year period.
Another question to ask - does a big change in inflation like this invalidate all the other assumptions that Firecalc is making - ie. would our history have been the same if inflation was so much higher?
|
Since FireCalc uses historical data to prognosticate future returns, it seems (to me) only logical to do the same with inflation, so I've been using 3.25%, based on:
Decade Inflation Chart
Studying the chart a bit, I do wonder about the
likelihood of our seeing inflation as high as that seen in the 191*s, or negative (as in the '20s & '30s),
through the next 35-40 years(?) given the Fed's ability/tools to influence interest rates.
Tyro
Linear Mode
