Read? Personal Inflation Rate and Market Inflation Rate - Revisit
Most retirees are not affected by inflationary pressure coming coming from housing, children education, children expenses, and etc.
So don't overly scared by your FI using typical 5% inflationary rate. It is too scary!
Uncle8888 used 3% inflation rate for his retirement planning. Reasonable or not???
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Give and take here and there. Do not forget retirees also higher risk for high blood pressure, diabetes, high cholesterol...etc.
ReplyDeleteSo may have to factor in these "extras"
Yes, I think 3% inflation rate should be OK unless you have big ticket expense such as Car, Housing and Children education.
ReplyDeleteFor medical expense, one would mitigate the downside by having medishield. :)
University tuition fee goes up 5-10% every 2-3 yrs. Scary inflationary rate.
ReplyDeleteIndeed it is very scary. That's is the main reason why student in US had mounting student loan debt.
DeleteIt is 'fortunate' if our kid is smart and able to obtain schoolarship from institution else the parent will have to food the bill. Alternatively, get them obtain student loan from local bank lor...
but thinking further, when we are in retirement age, we should be no longer have such 'burden' like child education or home loan.
DeleteThat's why we have to plan for retirement during young. No?