What Happens to Your Retirement Plan if Inflation Stays Above 3 Percent

The problem accelerates because your portfolio might not be growing fast enough to support higher inflation adjustments. If your portfolio returns 6% annually but inflation is at 3.5%, your real return is only 2.5%, something many retail investors tend to forget. After withdrawing this inflation-adjusted number for expenses and cost of living, there is less left for the portfolio to compound on.However, if inflation is running at 3.5%, you will then need $41,400 to maintain the same level of purchasing powe ...