How do
you then account for inflation?
Not exact matches
I'm okay with having money that we'll definitely use in a couple of years sitting in a bank
account, but if we want to not worry about having to buy in a rush
for fear of
inflation,
then we need to have that money at least keeping up with it.
Lamontagne says that if the Minellis can increase the return on the money in their savings
account from 0.75 % to 3 %,
then based on a projected average annual
inflation rate of 3 %, the couple can live off their money
for decades and still have $ 1 million left at age 90.
Even after you
account for your costs, you can usually see returns that beat
inflation — and
then some.
In order to properly use Monte Carlo in retirement planning, dozens to hundreds of inputs need to change to reach a Real World probability number: Life expectancy, age of retirement, investment payouts, yields vs. share selling, investment returns,
inflation, income goals, Social Security, all of the types of taxes, pension payouts, annual cash flow surpluses and deficits, random earned incomes, replacing vehicles every ten years, allocation mix changes over time; and
then duplicate all of that
for every investment individually,
then for the spouse,
then account for all of that compounding in every year, and the list goes on and on.
The work in question was acquired by its consignor back in May 2006 at Sotheby's New York
for $ 632,000, meaning that it had increased by a full $ 1 million since
then — not a bad return over 11 years, even when
accounting for inflation, fees, and so forth.