How does inflation affect a FIRE plan over several decades?
Inflation is the quiet force that can wreck a long retirement, because even a modest 3% average roughly halves your purchasing power over about 24 years — so a budget that feels comfortable at 45 may feel tight at 70 if your withdrawals don't grow. That's why the 4% rule assumes you increase your withdrawal each year by inflation, not keep it flat. It's also the main reason FIRE portfolios stay stock-heavy: stocks have historically outpaced inflation over long horizons, while cash and most bonds lose ground to it. When you set your FIRE number, use today's real expenses and let the inflation-adjusted withdrawal handle future price rises. Watch for categories that inflate faster than average, especially healthcare. Building in flexibility to trim spending during high-inflation, weak-market years adds an important margin of safety.