We are not so concerned of inflation as our net worth is largely our home - property. Given that property is a good hedge against inflation, if inflation is high our property will appreciate in value at a higher rate. So by time we reach 60, it is possible our property value will double. So it could be worth $4m or more. We will then sell, we could even downgrade to a
HDB flat if it makes sense. Please don't tell me you can't retire with $4m?
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Originally Posted by Unregistered
What is your current income? Why do you say your salary has stagnated? Because if it is really so, you are in deep deep trouble. With inflation, your stagnated income will decrease in real terms every year, meaning you will not be able to save $30k pa. Your net worth of $2.3m now might even reduce by the time you reach 60.
An inflation rate of 3% pa will reduce your net worth by half after 20 years when you reach 62.
Best to upgrade skill to get higher pay or plan to work beyond 65. 3% inflation fallacy hurts retirement savers - MarketWatch |