MY BOOK.
Well, it is not written yet, but here some of the ideas on chapters/subjects:
One chapter will deal with the reality that the inflation rate actually increases in retirement because:
(1) Your mortgage payment (which used to include principal and interest payments that were fixed) now includes only property taxes and home insurance premiums (which go up faster than inflation - at an average rate of 6-7% over long periods, though recently it has been much more)
(2) Your health insurance premiums (you now have to pay for) and they are a greater percentage of your lower income than they were when you were working. And they increase faster than inflation, too.
(3) Car replacement, of-course, is another big one because cars increase at about a 7% rate because you have to pay for the new features which are part of the price and you cannot opt out of.
If inflation for a worker is 4-5%, then for a retiree it is probably double that at 10% (I will have to run the numbers and see). Hello out there? I run all my retirement estimates based on average inflation rates of 3.2%. All planners who use Monte Carlo use 3-4% too and it makes a big difference if the number is double or triple that!
Now the CPI index does have a new index they are trying to work out called the CPI-E which tries to average the Consumer Price Index for retirees. It is still in beta testing but also is trying to uncover the higher inflation rate being experienced by those in retirement.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.