Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
Although you can choose any rate of inflation and return, I prefer to use rates based on some actual historical numbers. The latest 'history' I have available for both S&P500 returns and inflation are for the period 1961-2006. I calculate the average annual inflation rate for that time period at 4.3%, and the average annual S&P500 return at 8.46%, for a net 'real' return of 4.17%. More conservative folks than I use 2%, and there are lots of folks who use more than 4.17% (i.e. 8%-3% = 5%). If that happens, I'll be thrilled, but I prefer a more conservative number. YMMV,

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.