Inflation forecast for early retirement

atush

AnotherJoe wrote: »

That doesn't mean anything. They could be in cash, gold, bitcoin, 100% defensive bonds, 100% scary equities or any mixture.

True, we need details to comment effectively

atush

AnotherJoe wrote: »

You don't need to be clever. If you are invested in the general stock market (without getting fancy with specific shares) then in the in the long term your investments will at least match inflation which is why you can ignore it. You don't have to have a SIPP to be invested in the stock market. Or you could have a SIPP and hold one general fund and leave it alone. I wouldn't say that was being "clever" either.
If you are not invested then I'd say you are trying to be clever by thinking you can match or outpace inflation by guessing what it will be which in the long term is riskier than investing, Unless you have so much money that it will outlast you. Which I don't expect is the case or you wouldn't be asking here.

This.

When people say stocks and shares what they mean is Equity. Ie owning parts of companies. And you can do this with single shares (risky) or you can do so with funds or trusts which own shares in hundreds of companies so much less risky. Sure the market goes up and own, but yo cant lose it all as most of the companies wont go down too far or bust.

Thrugelmir

AnotherJoe wrote: »

You don't need to be clever. If you are invested in the general stock market (without getting fancy with specific shares) then in the in the long term your investments will at least match inflation which is why you can ignore it.

That unfortunately is untrue. Stock markets trend loosely with growth (i.e. GDP) not inflation. The S&P 500 actually underperformed the US inflation for an entire decade.

bostonerimus

You should test your plan with a range of inflation rates and investment returns. 3% is probably a good estimate, but throw in 4% and 5% too and have a plan to deal with those too.

AnotherJoe

Thrugelmir wrote: »

That unfortunately is untrue. Stock markets trend loosely with growth (i.e. GDP) not inflation. The S&P 500 actually underperformed the US inflation for an entire decade.

I'm not counting "an entire decade" as "the long term"