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Comment by dv_dt | Hacker News Reader

Treasury Inflation-Protected Securities, often called TIPS?

https://www.treasurydirect.gov/indiv/products/prod_tips_glan...

I don't know... I have the feeling that the inflation rate calculated in those formulas is much lower than the actual inflation rate experienced by the population, and it's kept artificially low because otherwise many inflation-adjusted entitlements paid by the government would grow out of proportion.

Maybe it's just because I live in California, but over the past 10 years I have observed inflation in my main expense categories (mostly rent and restaurants) go up a steady ~10% a year, which clearly doesn't match what the TIPS have been returning, so had I had all my nest egg in TIPS, my purchasing power would have shrunk by quite a bit.

1) TIPS inflation isn't solely to cover state of California only. It is a nation-wide average.

2) Your main expense categories are just a subset of consumer expenditure that the bureau of labor statistics use to measure price levels of goods and services.[1]

https://www.bls.gov/news.release/pdf/cesan.pdf

To add to this, your personal inflation rate will be larger because the CPI takes into consideration a similar item. So when the economy is good, a kraft dinner is replaced with a steak dinner, when the economy drops, the opposite is done. So you pay not see the inflation rate change in your daily expenses.

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