Modeling the Impact of Inflation on Retirement Savings Portfolios

June 2024

Authors:

Brian Kaul
Lisa Parker, ASA, MAAA
Ben Leiser, FSA, MAAA
Risk & Regulatory Consulting, LLC

Description

The primary purpose of this paper is to demonstrate, through a basic stochastic projection model, how inflation might impact savings and investing for retirement. We do this through inputting into the model a sample of representative scenarios and observing how inflation interacts with the other factors that drive the accumulation of funds in selected portfolios. As described in the disclaimer, the objective is not to gauge what the most advantageous investment strategies are. Rather, it is to illustrate how inflation acts as a component in the results of these strategies.

Materials

Modeling the Impact of Inflation on Retirement Savings Portfolios

Acknowledgments

The researchers’ deepest gratitude goes to those without whose efforts this project could not have come to fruition: the Project Oversight Group for their diligent work overseeing, reviewing, and editing this report for accuracy and relevance.

Project Oversight Group members:

Carol Bogosian, ASA
Adrian Cox, FSA, MAAA
Tim Geddes, FSA, EA, MAAA, FCA
Anna Rappaport, FSA, MAAA
Sara Rix
Andrea Sellars FSA, MAAA
Faisal Siddiqi, FSA, FCIA
Tom Toale

At the Society of Actuaries Research Institute:

Barbara Scott, Senior Research Administrator
Steven Siegel, ASA, MAAA, Senior Practice Research Actuary

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