Your pension plan projects that your savings will be worth 500,000 EUR in 30 years. If inflation averages 3% per year over that period, which statements are correct?

Question

Answer

The purchasing power of that 500,000 EUR in today's money is significantly lower than 500,000 EUR.

Answer

If the nominal amount is fixed, inflation has no effect on how much you can actually buy with it.

Answer

To plan realistically for retirement, you should think about future amounts in today's purchasing power, not only in nominal euros.

Answer

Inflation reduces the real value (purchasing power) of future money.

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Your pension plan projects that your savings will be worth 500,000 EUR in 30 yea...

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