What you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI) which has a long-term average change of 2.5 percent annually, from 2000 to 2010. The long term inflation rate used by the Civil Service Retirement Fund Board of Actuaries is 3.0%.
The Federal Ballpark E$timate uses 3.0% as a default rate, but will allow you to choose any rate between 0% and 15. You should choose assumptions -- or range of assumptions -- that are right for you based on your particular circumstances.