Their nominal yield provides
you less purchasing power due to inflation.
Same dollars in your accounts, though they would have
less purchasing power due to inflation.
Not exact matches
The
purchasing power of the fixed income stream deteriorates, the investor has
less ability to recoup
purchasing power because of the shorter investment horizon and more conservative allocation, and the investor's potentially higher effective inflation rate (
due to greater exposure to health care costs) tends to make any shortfall more painful.
Due to potentially - large oscillations in the desire to hold cash and to the fact that changes in the money supply can take years to impact the cost of living, this theoretical rate of
purchasing -
power change will tend to be inaccurate over periods of two years or
less but should approximate the actual rate of
purchasing -
power change over periods of five years or more.