• Question
  • Inflation estimate

    Asked on 5/24/2012

    Having difficulty picking an inflation guess for the future - what are your recommendations - and why ? It seems I am very conservative than most. (I have been using 3.5%)

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  • Categories: Retirement Planning, Inflation and COLA

Answers

  • NewRetirement User

    72 year old from Kent, WA

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  • Hi - thanks for your question.

    For the Assumptions in our Calculator we assumed the following:

    Optimistic scenario: Inflation = 0.5% per year (based on the market forecast for inflation arrived at by comparing the 10 year TIPS to the 10 year nominal Treasury)

    Pessimistic scenario: Inflation = 3% per year (historical average over the last 20-30 years)

    It's always safer to plan for a more conservative case, which you are if you assume a 3.5% inflation rate.

    You can find all of our Assumptions in links on the Analysis pages of the NewRetirement Calculator:

    https://www.newretirement.com/retirement-calculator/default.aspx

  • Login to rate this answer:   Answered on 5/29/2012
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.