One of the major threats to a retirement fund is inflation. With rare exceptions, the cost of living will always increase — you could buy a satay stick for one cent in the 1960s and those of us who grew up in the 1980s will remember how a big a sum $500 used to be. As such, a lot of people who make sweeping statements — such as “I’ll only need $1,000 a month to survive” — may be far off the mark.
Here’s a look at how much your lifestyle might cost in 2047.
In the following example, we will work out the cost of items today and how they would change by 2047. This follows an assumption that the overall rate of inflation is 3%. This is more or less in line with Singapore’s core inflation* over the past decade and most developed countries have a comparable rate of …Read the full article →