Using an appropriate inflation (or growth) rate for each aspects of your financial life is key to successful retirement planning. Your salary, mortgage payments, property taxes, child-related expenses, personal expenses, Social Security benefits, healthcare costs, and investments will likely all grow at different rates.
For example, projecting your savings with investment return, while keeping all your expenses in current dollars can result in running out of money much sooner than expected. Ignoring inflation in both your expenses and income won't necessarily "cancel out" either. For example, healthcare costs have been growing much faster than Social Security benefits in recent years.
To keep MoneyBee accessible to everyone, we provide reasonable defaults for each inflation and growth rate that applies to you. For each default, we explain clearly on what data and analysis it is based and let you change it if needed.
We believe that prudent retirement planning should be based on our best assumptions about the future. And since life almost never plays out exactly as planned, we need to regularly update our analysis based on our latest data. This way, we can make timely incremental adjustments along the way.
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