Economics • • By Sarah Jenkins
How Inflation Affects Your Coast FIRE Calculations
Why calculating in real, inflation-adjusted dollars protects your future purchasing power.
How Inflation Affects Your Coast FIRE Calculations
Inflation erodes purchasing power over time. A dollar today will buy less in 30 years.
Real vs Nominal Returns
Always discount your expected nominal return (e.g., 10%) by expected inflation (e.g., 3%). This yields a real return of ~6.8%, meaning all future dollar projections remain in today’s actual purchasing power!