Long term high inflation and our suggested consumption in real dollars goes down a relatively small amount? How can that be?
To test the effects of inflation on a portfolio I turned MC on and kept all the normal defaults in place and entered $1,000,000 in regular assets/mutual funds.
The suggested consumption for my wife and I equaled $36,385.
If I then change the default inflation rate from 3% to 12% our suggested consumption equals $31,438.
How can this be right? Long term high inflation and our suggested consumption in real dollars goes down a relatively small amount?
If I do the same thing with MC turned off our suggested consumption goes from $37,493 to $7,128.
What gives?
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