The Consumer Price Index, or CPI, is a means of measuring and tracking changes in consumer prices over time. The U.S. Bureau of Labor Statistics produces its CPI each month, listing data on changes in the prices paid by urban consumers for a couple hundred categories of goods and services, such as food, medicine and transportation.
Financial advisor Stacy Francis, president and CEO of Francis Financial, calls the CPI one of the most important factors in good financial planning, from budgeting day-to-day expenses to planning retirement.
CPI "has a big impact on ... your retirement because it means that when you retire, things are also going to be more expensive," she said.
How should you respond to the inflation, or rise in prices, tracked by CPI?