Today's dollars or future ?

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crashmeister
Posts: 2
Joined: Sun Sep 04, 2016 5:47 pm

Today's dollars or future ?

Post by crashmeister »

Hi, I'm new to using the planner. Trying to figure out if the amounts in the details section are in today's $. Seems to be but I cannot tell for sure because simulation prevents COLA under a lot of situations.

Thanks,
Craig.

jimr
Posts: 670
Joined: Thu Feb 28, 2008 6:48 pm

Re: Today's dollars or future ?

Post by jimr »

Everything is shown in today's value dollars.

The easiest way to test this is to zero out Annual Retirement Spending on the main input window and create two 'Other Expense' cash flow entries using the additional inputs window. For the first expense, set the cola to track inflation and for the other one set the cola to no cola.

Next, enable the no cola expense entry and disable the track inflation entry. Now run the simulation. In the detailed view window, you'll notice the expenses amount decreasing each year by the inflation rate, reflecting the loss in real value due to inflation. Next enable the track inflation expense item and disable the no cola item and run the planner again. Now in the detailed view you'll see the expense staying level year to year, indicating that the value is exactly keeping up with inflation.

crashmeister
Posts: 2
Joined: Sun Sep 04, 2016 5:47 pm

Re: Today's dollars or future ?

Post by crashmeister »

Excellent reply. Thank you.

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