Retired? Don’t worry about inflation? Sorry Jane Bryant Quinn, I think you missed this one.

In the December 2018 issue of the AARP Bulletin Jane Bryant Quinn writes about “Money for Life” Part of her formula includes the following:

Sorry Jane, while I have great respect for your expertise, I think you missed the boat on this one.

Her assumption regarding what is taken from savings is use of the 4% rule which says you can take 4% from your savings plus inflation each year and not run out of money or at least have it last thirty years.

In recent years that rule has come under question. Some experts say it’s too little at least in early years, others say it’s too inflexible and doesn’t recognize that during severe down stock markets it may be risky taking that much. And then there is the fact that when qualified plans (IRAs/401(k)) are involved the IRS dictates your withdrawals after age 70 starting around 4% but increasing each year thereafter.

I can tell you seniors are very worried about inflation and each year are convinced that the Social Security COLA is woefully inadequate. The Federal Reserve Bank of Atlanta allows you to enter personal data and they compare your personal CPI with the national CPI. MyCPI has frequently outpaced the national CPI.

The experts tend to overlook the human aspect of their advice. Average people are frequently not equipped to deal with the ups and downs of the markets, nor are they sophisticated investors and they worry. And they tend to be conservative investors, perhaps too conservative … too conservative to rely on the 4% rule.


  1. I do not worry about inflation, because I live way below my means, now. I have $3,043 per month income and my total household costs per month are $1,326. That includes everything, Lot rent, utilities, life insurance, home and car insurance, internet, phone and TV streaming service, food and $50 per month in gasoline. My total medical expense for 2018 = $300 for my wife and I. All extra money is going to pay off credit card debt.

    Prior to starting Social Security at age 62 in March 2018 I did use credit cards, that will be paid off in Nov 2019, but interest on credit card debt will be zero from March 2019 to Nov 2019. I love zero interest credit card debt, it has saved me hundreds of dollars per month by transferring high interest credit card debt to zero interest credit cards, that will be paid off before any interest charges. .

    I would caution everyone to stop using credit cards before retirement. I have learned a hard lesson, about credit card debt, it is not worth the future pain.
    The only thing worth going into debt for is a home or car and pay the loan off as soon as possible. I have not had a car payment since 1986 and plan on paying cash for my next car in a few years.


    1. What if your medical bills jumped to $5,000? What if your car doesn’t last a few more years? Certainly the cost of many of yiur purchases will go up over the next several years. What if?


      1. My medical bills are covered by very good insurance and my wife and I are in good health. If they did jump to $5,000 I would be able to make a $416 per month to payment and pay the bill off in 12 months. As far as my car goes, I do all the car maintenance required to keep it going, thanks to my father, a mechanic, who taught me how to work on cars, from age 13 to 20 I worked in his repair shop. Then I enlisted in the USAF and learned Aviation Electronics skills that have helped me troubleshoot automotive electrical and computer malfunctions. Worse case, if the car could not be repaired, I would use the city bus, like I did from 2013 to 2015, while i saved up for my next car purchase. I would save $196 per month on gasoline and car insurance, that could be added to my car purchase fund. After Nov 2019 I will be able to save $1500 per month, that car fund will grow very fast.


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