Are retirement withdrawal amounts adjusted for inflation?

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frp user
Posts: 65
Joined: Fri Feb 29, 2008 12:55 pm

Are retirement withdrawal amounts adjusted for inflation?

Post by frp user »

Very Cool Jim,
Nice work. Hope you keep it up.
In inputting the yearly retirement withdrawal amount, (Say $50,000), is that figure adjusted for inflation?
In other words, when I tell the program I want 50,000 per year, but I dont want it until 2027, that 50,000 figure is more equivelant to say, 70,000. (Just throwing out a number). Is that withdrawal figure adjusted?

Thank You-
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admin
Site Admin
Posts: 79
Joined: Thu Feb 28, 2008 5:27 pm

Re: Are retirement withdrawal amounts adjusted for inflation?

Post by admin »

Thanks for the kind words on the planner.

The short answer is that the amount is adjusted for inflation. All amounts on the main input tab are represented in present (2006) dollars and are automatically adjusted for inflation.

For example, if you enter an expense amount of $50,000 that starts in 2027, an amount with the purchasing power equivalent to $50,000 in today's dollars will be withdrawn from the portfolio starting in 2027 (after adjusting for any retirement income) and the purchasing power of the withdrawal will be maintained throughout the plan.

The only exception to this automatic inflation adjustment is if you use the "additional inputs" tab and intentionally specify "no cola" additional income amounts, such as payments from a non-indexed annuity or pension.

Please let me know if you need additional clarification on this or any other part of the planner's functionality.

Best Regards,

Jim
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