EFFECTS OF INFLATION ON YOUR MONTHLY GOALS A practical financial analysis must take inflation into account when projecting financial requirements. All the objectives you supplied have been projected using your estimated rate of inflation. Some people find it difficult to believe the profound effect inflation has on income requirements and purchasing power. The following table illustrates the importance of considering inflation.
Assumed Annual Rate of Inflation:
4.00%
Age of Martin/Mary
Desired Monthly Income (Today's $)
Desired Monthly Income (Inflated)
48 / 45 49 / 46 50 / 47 51 / 48 52 / 49
$6,000 6,000 6,000 6,000 6,000
$6,000 6,240 6,490 6,749 7,019
$6,000 5,769 5,547 5,334 5,129
55 / 52 60 / 57 65 / 62 66 / 63 70 / 67
6,000 6,000 6,000 6,000 6,000
7,896 9,606 11,687 12,155 14,220
4,560 3,748 3,080 2,962 2,532
75 / 72 80 / 77 85 / 82 - / 85
6,000 6,000 6,000 6,000
17,300 21,048 25,609 28,806
2,081 1,710 1,406 1,250
Prepared For: Martin and Mary Moderate Prepared By: David M Stitt, CLU, ChFC, CEP, CSA, CFP, RFC
Purchasing Power of Desired Income
DAMOST Consulting