I see that many do not cater for the deleterious effect of inflation in their planning for their net worth target for retirement.
For eg, one 28 yr old planned to accumulate $5m by 55 yrs old where he hopes to retire. From 28 to 55, that is a good 27 yrs to go.
With an inflation rate of just, 2.5% (last year's was more:
Singapore Inflation Rate | Actual Value | Historical Data | Forecast)
The $5m today will only be worth $2.5m when the guy reach 55 (27 years later).
A friend of mine got a windfall of $1.5m from enbloc at 45 yrs old, 10 yrs ago. He bought a
HDB at $500k and invested the rest in shares for $50k - $60K pa dividends, and promptly retired. Initially the dividend was sufficient for his family expenses, but the family expenses increased year by year due to inflation.
He is now caught in a difficult situation where he had to sell down his shares to supplement his dividends. But as he sold down his shares, his dividends also dropped leading to a "death spiral". He started looking for work again at 55.