(PartiallyPolitics.com) – The College Retirement Equities Fund (CREF) and the Teachers Insurance and Annuity Association of America (TIAA) have recently gone viral after their predictions made in 1996 in a magazine publication have been viewed as being extremely accurate.
As part of their predictions, they had stated that burgers and fries would cost $16, which proved to be less than what that same combo would cost at Five Guys this year, where the total amount would come to $24 for the combo. In terms of their predictions for a vacation costing $12,500, that price tag is not crazy if one is looking at an international trip for four people. The one prediction they were off on was that a basic car would cost $65,000. While basic cars remain cheaper than the prediction, the price tag is not far off what you would pay for a pickup truck or large SUV.
However, while some might argue that their predictions were psychic they just show that the members are prepared. TIAA executive wealth management advisor Jeffrey Mellone argued that looking at inflation, or financial data over a long period of time makes the rates of inflation predictable. Financial planners have the capability of looking at how prices have changed over the past few decades in order to create models that predict how much gas, groceries, and movie tickets will cost in the future.
Mellone pointed out that these predictions are very important because they needed to plan for the future cost of living instead of the current cost of living when looking at retirement. He added that for people that are transitioning into retirement, the question is how they will be able to ensure security in the future when things are getting more expensive.
Copyright 2024, PartiallyPolitics.com
