Historically, inflation is in the U.S. causes prices to rise an average of 3-4% a year. Though is may sound insignificant, the reality is very different. Over 20 years at 4% annual inflation your expenses will double. When you are retired and relying on various sources of income be sure to factor in the inflation rate. Here is a 20 year table beginning with $50,000 of expenses in year one. The table is based on 4% annual inflation.
- Year 1 $50,000
- Year 2 $52,000
- Year 3 $54,080
- Year 4 $56,243
- Year 5 $58,493
- Year 6 $60,833
- Year 7 $63,266
- Year 8 $65,797
- Year 9 $68,428
- Year 10 $71,166
- Year 11 $74,012
- Year 12 $76,973
- Year 13 $80,052
- Year 14 $83,254
- Year 15 $86,584
- Year 16 $90,047
- Year 17 $93,649
- Year 18 $97,395
- Year 19 $101,291
- Year 20 $105,342