Inflation is insidious to retirement planners because it is invisible.  We don't see it until it has already happened.  We measure inflation indirectly as price increases, but all price increases are not necessarily inflationary. 

When we look at a dollar bill from year to year it looks the same.  But each year that dollar buys less and less.  It is not the value of the goods and services we buy that changes, but rather the value of the dollar we purchase them with, that changes. 

Inflation robs us of our wealth, particularly our retirement nest egg.  Without any action on our part, year after year the purchasing power of each dollar in our retirement nest egg diminishes. 

In the sections below are discussed some important aspects of inflation.

©2008, Simon Revere Mouer III
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