[Matthew]

Nobody said inflation will stay 3% for 30 years…. the long term average is 3%. 2-3 years of not even record inflation won’t change that 30 year average… this isn’t anything new.

Also, your personal inflation matters the most. A 50% increase in your food budget takes you from 10% of your budget, to 15% of your budget… that shouldn’t be breaking your plan. That’s a 5% increase….

Those that retired lean will obviously feel these changes much more.

[Bill]

Obviously inflation is real, but the inflation adjusted returns of the market are about 7% and the 4% rule includes inflation.

Also, you should have seen good returns over the last 5 years, right? You should be ahead of the game even next of inflation.

[Sonja]

I think 7% inflation would be a safer average to use. Or up to 10% because it did get that high and allows for a margin of error.

[Kaycee]

So, this is a common misconception, but when inflation slows, things don’t get cheaper. They are just continuing to increase at a slower rate.

Except for increases that have been driven by supply and demand mismatches, it isn’t really realistic to expect that your outlays are going to go down. Rather you need to

Be hoping for more of a plateau or sustainable rate of increase.

I think best case we can expect inflation to hover around 4 – 5% for the near term.

Monthly inflation was .4% in April and x 12 that gets you to 4.8%. Since annual inflation in April was 4.9% it looks like we are leveling things out.

[Author]

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