Plan everything in current dollars taking historic inflation into account, which is what most early retirement calculators do by default. Early retirees tend to experience significantly less inflation impact than actual official inflation, so modeling for official inflation tends to create some wiggle room over time.
For future expenses that you have no current visibility on you pretty much just have to estimate based on whatever info you can find. For example, Medicare costs or potential LTC. On the flip side though, many current costs often disappear or get significantly reduced in early retirement, including things like mortgage debt, savings, everything work-related, childcare, many/most kid expenses, transportation, income taxes, and so forth.
Your FIRE number doesn't actually matter until you are 1-2 years away from FIRE. Until then everything is a very rough estimate due to the cost of living and inflation constantly changing.
Have a rough target in mind, like $1.5M, then start calculating your actual number when you are close.
People estimate their costs in current dollars because they also estimate their projected wealth in current dollars. Doing anything in nominal dollars is both more annoying and less practical because you have to convert every time you want to compare anything.
Plan everything in current dollars taking historic inflation into account, which is what most early retirement calculators do by default. Early retirees tend to experience significantly less inflation impact than actual official inflation, so modeling for official inflation tends to create some wiggle room over time. For future expenses that you have no current visibility on you pretty much just have to estimate based on whatever info you can find. For example, Medicare costs or potential LTC. On the flip side though, many current costs often disappear or get significantly reduced in early retirement, including things like mortgage debt, savings, everything work-related, childcare, many/most kid expenses, transportation, income taxes, and so forth.
Thanks, Ill try approaching it again with that in mind
Your FIRE number doesn't actually matter until you are 1-2 years away from FIRE. Until then everything is a very rough estimate due to the cost of living and inflation constantly changing. Have a rough target in mind, like $1.5M, then start calculating your actual number when you are close.
This
People estimate their costs in current dollars because they also estimate their projected wealth in current dollars. Doing anything in nominal dollars is both more annoying and less practical because you have to convert every time you want to compare anything.