Agree 100%. Fortunately I hope to hit my number and join the ranks of the unemployable within the next three years (possibly extending for a year so I have some play money). Being out in my inflation estimate by 1-2% pa over three years should have little effect on my number.

Cheers
traineeinvestor

BUT, you still need to estimate correctly how much income you need in retirement (i.e. your starting Number), which is what my 1. – 3. steps above were aiming to do. Yes?

Yep. I was using 3% (slected at a time when CPI numbers were around 2%). I’m no longer sure if that is enough. Maybe 4%? But then again, if most of my money is going to be in equities and real estate I should have a degree of protection against inflation so maybe it does not matter that much if my guess on the rate of inflation is a bit out????

How I calculated my Number already took into account inflation:

1. Pick the annual income that I want in today’s dollars,

2. Double for every 20 years between today and My Date (prorate for shorter or odd periods),

3. Multiple 2. by 20

… that’s my Number allowing for (very roughly) 4% inflation b/w now and then

The good news….given the rate that governments around the world are printing money, becoming a millionaire is getting easier by the day (of course the value of being a millionaire is depreciating at a corresponding rate). In anticipation of at least the prospect of increasing inflation in the years ahead I am debating whether to increase my number to compensate (even if it means working for an extra year or two).

Cheers
traineeinvestor

BTW: thanks for the link; unfortunately, this one only accepts ‘rates of return’ < 20% … not enough for many of my readers!

It lets you change your number and the years you want to reach it by.