Being one who looks at money and financial websites, I will often come across articles discussing retirement.  I will see headlines such as “How Much Do You Need to Retire”, or “When Can You Retire”, or “Will You Have Enough For Retirement”.  There are also retirement calculators.

It is a popular subject and not surprisingly, considering most people would like to retire at some point in their lives.  They want to know when they can free themselves from the daily grind.

The problem is that it is very difficult to estimate a good retirement number.  You don’t know what kind of unexpected expenses you may have, including medical.  You don’t know what the economy will be like and what kind of a return you can get on your investments.  One of the biggest things is that you don’t know how long you will live.

Aside from your life expectancy, by far the biggest variable and perhaps the most underestimated factor is price inflation.  You don’t know what your cost of living is going to look like years down the road.  If we have annual price inflation of 10%, then prices will double approximately every 7 years.

The Federal Reserve and the fiat money system makes it extremely difficult to plan for retirement.  It has been bad enough in the past, but now we are looking at $16 trillion in government debt (and growing) and perhaps $200 trillion in unfunded liabilities (and growing).  There are many good reasons to expect substantially higher price inflation in the future.  Meanwhile, your bank savings account right now is probably yielding .1% per year, if you are lucky.

Of course, this is just another reason that we should strive to allow competing forms of money by repealing the legal tender laws.  It will either keep the Fed somewhat honest or else it will put it out of business.

Since getting rid of the Fed isn’t a reality at least yet, you are probably still trying to find a good way to calculate your retirement needs.  While it is difficult to do, I think using real estate as a marker is actually a decent way to do it.  I have written about this before.  Owning houses (or condos) that are paid off will generate income.  The best thing is that rents will tend to keep up with price inflation and are a pretty good marker.

So while it is impossible to accurately calculate your retirement needs because of variables like life expectancy and inflation, you can at least get a decent estimate by using real estate as a marker.