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Retirees beat costs

Inflation does not necessarily cause retirees to suffer a severe, irreversible loss of purchasing power throughout their lives, says a study by Towers, Perrin, Forster & Crosby, management consultants.

"Most retirees will see their purchasing power drop somewhat in the first few years of retirement," said Philip M. Alden Jr., vice-president of the firm. "But as long as social security benefits are tied to the consumer price index, purchasing power for many will actually rise in later years."

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Most experts agree that the CPI overstates inflation by 2 to 5 percent a year.

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