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The key phrase in the Schwab
formula is “in today’s dollars.” If,
for example, you are 10 years away
from retirement, you will need to
increase the $920,000 previously
mentioned to allow for the effects
of 10 years of infl ation.
Of course, you can’t predict the
exact infl ation rate; all you can do is
estimate. Even if you assume that to-
day’s infl ation rate will remain about
the same in the next 10 years, that
$920,000 in today’s dollars will be
about $1.4 million in 2019.
Because the current low rate of in-
fl ation might not continue for much
longer, you should adjust your esti-
mate of required retirement income RE T I RE N O T H I NG
®
to compensate for the latest rates.
Never retire your spirit. Never let go of your curiosity or
How to compensate
zest for life. And never, ever surrender your independence.
for infl ation
Financial consultant Ingrid K. Lamb,
At Presbyterian Homes, we have a different kind of
CPA/PFS, CFS, of Chesapeake Beach,
mission. We answer to a different bottom line. Here,
Md., points out Social Security and
we put your independence above everything else.
some private pensions are adjusted
to help counteract the harmful ef-
Presbyterian Homes is a not-for-profit organization
fects of infl ation. However, retir-
with a national reputation for creating extraordinary
ees depending on investments for
communities for older adults for over 100 years.
a signifi cant part of their income
Communities that are alive with people, intellectual
might fi nd that’s not enough. “One awareness, enduring friendships.
way of compensating for infl ation
is to invest part of your portfolio in
Give up nothing. And above all else, retire nothing.
dividend-paying stocks that have a
long payment history and a record of
steady dividend increases,” she says.
Lamb also says that while the
In Illinois: Evanston • Lake Forest • Arlington Heights
underlying value of the stocks might
800-896-9095 • www.presbyterianhomes.org
vary with market fl uctuations, divi-
dends continue based on the number
of shares owned.
please send me more information about
presbyterian homes communities located in:
Maury Randall, professor of
fi nance at Rider University in
a74 Evanston a74 Lake Forest a74 Arlington Heights
Lawrenceville, N.J., agrees that a
retirement portfolio should contain
name: _________________________________________________________________
some stocks as a hedge against infl a-
address: ______________________________________________________________
tion. “Another method of protecting
yourself is investment in [treasury
city-state-zip: ______________________________________________________
infl ation-protected securities] (TIPS). phone: ________________________________________________________________
These treasury bonds provide a return
based on the current rate of infl ation,”
return to: marketing department, presbyterian homes,
3200 grant st., evanston, il 60201
he says. “So, when infl ation rises,
M A R C H 2 0 0 9 M I L I T A R Y O F F I C E R 7 1
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