Retiree Inflation Rate?
I am 58 and planning to retire in a few months. *I am trying to project future income needs, based on my current budget, then increasing it in future years an assumed inflation rate.
I have very few items in my budget that aren't subject to inflation (for example, no mortgage). *18% of it is for health care cost (premium, deductible, co-pays.) which will rise at a higher than average inflation rate.
What percent inflation factor do you think I should use when I project future inflation-adjusted income needs? * I am thinking that 5% is realistic. *But because 5% inflation increases my income needs so rapidly over the years, it makes a huge difference in my projection of whether I can retire safely. * I have used FIRECALC but I think it uses a general inflation rate (CPI or PPI as I recall), not a "retiree rate", which might be higher.
Is 5% about right? * What inflation factor do you folks use?