O ne million dollars is the holy grail for most investors. We figure that, if we can only accumulate a million bucks by the time we retire, we can live in comfort, or, at the very least, in a style similar to what we enjoyed while we worked. Because figures don't lie, my friends. Unless you die before then, nothing will be left from the nest egg to pass on.
Many people can live very well on that amount, especially if they've paid off their mortgages.
As discussed in column 4, inflation can chew away on your investment much like rust does to a car. In running the numbers, let's assume that consumer prices will rise at 5.5 percent a year. Some people would argue that a 5.5 percent inflation estimate is too high, considering the fact that the consumer price index has risen only 3.0 percent in the last 10 years. But when you look at the index over a longer and perhaps more representative period, from 1966 to 1996, it rose at 5.7 percent. From 1976 to 1996 it rose at 5.6 percent.