7 ms·

Tony's calculations are wrong because he assumed constant inflation. There will be periods of deflation, and many think that one is starting now. It also won't

• jerf 16y ago
  It's not a terrible thing to do though, because it also reflects uncertainty in your income, albeit in a way that people aren't used to seeing. There is a non-zero chance that 10 million dollars today will end up being 3 million dollars next year, and I don't mean "next year" metaphorically, and I'm not even talking about the nastiness of the current economy, either; that's always true, regardless of the state of the economy, just the odds change.
• webwright 16y ago
  No, he doesn't assume that. He assumes an average rate of inflation with the mean average being above zero, because it's always been that way. http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in... When you're talking about decades of retirement, the compound annual growth rate of inflation is all that really matters. There isn't clear consensus on inflation/deflation in the near term. While last year saw deflation, a lot of economists think that printing money like we are will cause unusual deflation.