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I am simply more comfortable having an inflation adjusted income stream that will adjust for inflation as it occurs which will cover the majority of my known non-lumpy expenses. Historically, in the aggregate, it does appear that it will do a fine job. This leaves my stocks to cover the small remainder, pay for lumpy expense, and in general make life more pleasant to live while leaving a legacy.

How does your personal inflation rate compare with CPI-U? Higher? Lower?

Cheers.

dcabler,

A) 50% of my retirement expense is covered by social security. Aka, COLA adjusted.

"How does your personal inflation rate compare with CPI-U? Higher? Lower? "

B) It has zero correlation with the official CPI-U.

KlangFool

0 correlation?

That would imply your personal inflation is completely random and has no connection to CPI prices.

That seems impossible if one consumes gas, food, etc.

The largest piece of CPI-U is rental costs.

If one has a paid off mortgage or even a 2.5% mortgage. His/her personal inflation rate is well below CPI-U.

I can say my personal inflation rate is far less than half CPI-U, but I'm retired with little debt.
Any debt I do have is at a 0% rate, with the exception of my 2.6% mortgage which is basically inflation protected cash that I will not pay off (I earn close to 5% on that cash).

Back to CPI-U rental costs.
https://www.americanprogress.org/articl ... ice-index/

given that the average rental index accounts for about one-third of total inflation

I have to agree with Klang, I have no need for TIPs, when I start SS at 70, the CPI adjustment should cover my needs.

Statistics: Posted by retireIn2020 — Wed Oct 09, 2024 10:52 pm — Replies 74 — Views 5868

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