The subject of inflation is interesting, as it affects our lives, and in particular as we look ahead to the future. Calculating needs on the basis of some type of percentage of increase, is a normal way of planning for retirement.
Probably correct in broad terms, but not necessarily true when it comes to individual items of expense.
Taking a few minutes to use the Government's Inflation Calculator
Inflation Calculator: Bureau of Labor Statistics
...can produce some interesting results.
Curiosity made me wonder how my final pre-retirement salary in 1986 would compare with today's workers, I was surprised to find out that it would have more than doubled....
On the other hand, other expense items don't work as well, using the CPI Calculator...
Example:
In 1954, my first year's college expense, was $1500, which, by using the calculator, would translate into $13,000 today. In fact, the current actual one year total cost, at the same school, is $63,000.
A loaf of bread in 1942, cost $.11 .... Using the calculator, today's cost would be $1.58... our actual cost for the same plain white bread is $.89 at Aldi's.
The Fairlawn Theatre feature movie cost in 1944, (including Pathe News and a Chapter picture... was $.14. The CPI Calculator says inflation would make that $1.82 today... Our local theater admission is $7.50 now.
My neighbor bought a new basic Ford 4 door sedan in 1953 for $1500. The CPI would make that $13,000 today. The base cost of a Ford Focus was about $18,000... by College cost standards, not too bad.
From a 1980 income tax calculation, my total cost, (subsidized by my employer) for medical insurance for my family of 6, was $1200... which would be inflation adjusted to $3400 today... and you can put your own number to what it might actually be today.
In 1972, we bought ground round hamburg for $.39/lb. which would be $2.17 today. Instead the cost is closer to $$4.00.
No special reason for these exercises, except for general interest, and of course your mileage will vary... So, just for fun... try your own calculations for things like gasoline, housing, or perhaps the cost of a new roof, or maybe an airline ticket.
Lastly... to save a comment...
"And your point is....?)
nada...
Probably correct in broad terms, but not necessarily true when it comes to individual items of expense.
Taking a few minutes to use the Government's Inflation Calculator
Inflation Calculator: Bureau of Labor Statistics
...can produce some interesting results.
Curiosity made me wonder how my final pre-retirement salary in 1986 would compare with today's workers, I was surprised to find out that it would have more than doubled....
On the other hand, other expense items don't work as well, using the CPI Calculator...
Example:
In 1954, my first year's college expense, was $1500, which, by using the calculator, would translate into $13,000 today. In fact, the current actual one year total cost, at the same school, is $63,000.
A loaf of bread in 1942, cost $.11 .... Using the calculator, today's cost would be $1.58... our actual cost for the same plain white bread is $.89 at Aldi's.
The Fairlawn Theatre feature movie cost in 1944, (including Pathe News and a Chapter picture... was $.14. The CPI Calculator says inflation would make that $1.82 today... Our local theater admission is $7.50 now.
My neighbor bought a new basic Ford 4 door sedan in 1953 for $1500. The CPI would make that $13,000 today. The base cost of a Ford Focus was about $18,000... by College cost standards, not too bad.
From a 1980 income tax calculation, my total cost, (subsidized by my employer) for medical insurance for my family of 6, was $1200... which would be inflation adjusted to $3400 today... and you can put your own number to what it might actually be today.
In 1972, we bought ground round hamburg for $.39/lb. which would be $2.17 today. Instead the cost is closer to $$4.00.
No special reason for these exercises, except for general interest, and of course your mileage will vary... So, just for fun... try your own calculations for things like gasoline, housing, or perhaps the cost of a new roof, or maybe an airline ticket.
Lastly... to save a comment...
"And your point is....?)
nada...
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