Inflation assumptions should be viewed critically as well. There is reported inflation and lived inflation, and the two are different. I have no car payment nor a need for a new one, and my mortgage is fixed, so the inflation that hit the used/new car markets and the "owner equivalent rent" that weigh somewhat heavily in USG calculations are meaningless to me. And those are major expenditure categories for most. I'm still working. A COLA increase of 5% after '22 resulted in a net gain for me. Other than groceries, we didn't feel much inflation. We're in our late 50s; we don't buy "stuff" - we have too much already. My spouse is retired and I work in a casual office - so clothing budget is very low. Utilities didn't move much in our area. And while we budget for car and home repairs, we have had very few over the years. Online complaints about a $5 increase in some streaming service are amusing: cancel it if you don't want to pay it, but c'mon, it is $60 a year! Look at your expenses and figure out what may increase and decrease during your retirement. And what is necessary vs what is discretionary. Assuming 4% inflation - which other than the pandemic induced increases of '22 we haven't seen in decades - strikes me as unreal and overly pessimistic.
Comments
Inflation assumptions should be viewed critically as well. There is reported inflation and lived inflation, and the two are different. I have no car payment nor a need for a new one, and my mortgage is fixed, so the inflation that hit the used/new car markets and the "owner equivalent rent" that weigh somewhat heavily in USG calculations are meaningless to me. And those are major expenditure categories for most. I'm still working. A COLA increase of 5% after '22 resulted in a net gain for me. Other than groceries, we didn't feel much inflation. We're in our late 50s; we don't buy "stuff" - we have too much already. My spouse is retired and I work in a casual office - so clothing budget is very low. Utilities didn't move much in our area. And while we budget for car and home repairs, we have had very few over the years. Online complaints about a $5 increase in some streaming service are amusing: cancel it if you don't want to pay it, but c'mon, it is $60 a year! Look at your expenses and figure out what may increase and decrease during your retirement. And what is necessary vs what is discretionary. Assuming 4% inflation - which other than the pandemic induced increases of '22 we haven't seen in decades - strikes me as unreal and overly pessimistic.
Post: Faulty Assumptions
Link to comment from February 26, 2024