It is known as an investor’s worst enemy and the silent assassin of savings.It has even been called “public enemy number 1” – all these unflattering titles belong to inflation.A 6% inflation rate will almost halve the value of your money over 10 years – turning, for example, R10,000 into R5,584.After 20 years, your R10,000 will lose 70% of its purchasing power and be worth only R3,118, according to Old Mutual Investment Group.This is why we need our investments to deliver returns that outperform inflation – what is known as a “real” or inflation-adjusted return.“Inflation is the most important index,” Zain Wilson, portfolio manager at Old Mutual Investment Group, said.The following examples from the “Long-Term Perspectives 2019” report, published by Old Mutual Investment Group, illustrate the impact of inflation on our everyday lives.A mid-sized family sedan (1600cc) which sold for R272,000 in 2018 will set you back R478,000 in 10 years and R1.1m in 25 years’ time, assuming an inflation rate of 5.8%, which has been the average vehicle inflation rate since 1990.One year’s tuition and boarding at a top private school cost R215,000 in 2018, but in 10 years it will cost R518,000 and in 25 years, R1.9m.One year of kidney dialysis in a private hospital cost R192,000.A decade from now it will cost R502,000 and R2.1m 25 years from now, assuming a rate of 10.1% medical inflation.Looking back in time, we can see how inflation has pushed up the price of some SA favourites: in 2018 you would have paid R74.90 for a Spur burger; in the 1970s it was 30 cents.The variability of inflation is a challenge for budgeting, Old Mutual’s report notes.The inflation rate is an average of all consumers in the country.If your expenditure is skewed towards goods or services with very high inflation rates, such as education and healthcare, your personal inflation rate will be much higher than the country average.In this case, you will need to earn or save more for these future expenses.If your retirement income – whether you buy a guaranteed annuity or draw from investments – does not at least grow in line with inflation, you will either experience a decline in your standard of living or you will run out of money before you die.At a 6% inflation rate, a fixed monthly retirement income of R10,000 a month today will decline in real terms to about R1,700 a month after 30 years, the number of years you could live for in retirement.This highlights how important it is to plan carefully and ensure that you invest to achieve inflation-beating returns in the long run.“Inflation is not like a bear market,” Wilson said.“You don’t have minus 20% inflation one year and then plus 20% the next year.“It is a persistent and continuous killer over time; a continuous uphill battle.”