2015 Conference
October 15–16, 2015
Orlando, FL
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Treatment of Inflation in Financial Planning
Keywords: 5 words maximum
inflation, retirement planning, financial planning, economic forecasting
Very short description for use in the program to help attendees understand more than a title can describe
Financial planning textbooks discuss inflation briefly, and case studies state some assumed inflation rate. For long term planning, such as calculation of the capital needs for retirement, the pre-retirement period is often considered in nominal terms, then with calculation of an inflation-adjusted interest rate for the capital needs at the point of retirement. I review salient issues about inflation from the economics literature, and discuss important financial planning issues related to inflation, for instance the treatment of annuity payments that do not have COLA features. I will propose alternatives to the standard textbook calculation method for capital needs for retirement.
Lead & Corresponding Author
Sherman Hanna, Ph.D., Ohio State University
Job Title
Professor