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As Inflation Rises, Beware of the Money Illusion. It May Cost You a Lot (wsj.com)
4 points by dustintrex 3 months ago | hide | past | favorite | 2 comments



> People often focus on the actual amount of money they earn or spend, rather than its purchasing power

I'm not sure how true this is. I believe lots of people are aware of the fact that almost everything is getting more and more expensive and thus their dollars are buying them less, but what can the average American really do about it?

> Say you are a 30-year-old worker who plans to retire at age 70. You look at your projected retirement income and feel that $50,000 a year in income would be sufficient. But if that number isn’t adjusted for inflation—and many retirement calculators aren’t—an inflation rate of 3.6% a year (the inflation rate in August ) means that $50,000 would buy you only $12,150 worth of consumption at the time of retirement.

So what's the average 30 year-old worker to do? It's not easy for most workers to increase retirement savings, and the high inflation environment doesn't help.





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