Generally while calculating retirement corpus we estimate our expenses at the time of retirement.But with the passage of time in retirement period(which may extend up to 20,25,30 years) expenses increase sharply every year due to inflation.Should we not make provision for this while calculating retirement corpus? Thanks for your reply in advance.
Ashok-Forget about general calculation. But in reality all retirement calculators will consider your current expenses. This they inflate it to arrive at expenses during your retirement age. Hence, inflation is considered during retirement age. If inflation is not considered, then it is wrong method of calculation.
Thanks for very prompt reply.