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Inputting figures for future annual spending reductions

Posted: Thu Nov 18, 2010 2:33 pm
by marc
Thank you very much for this calculator! It is a great resource.

I'm looking for the proper way to input data for future expense reductions. In my case, I'll be retiring before I reach the age for Medicare. I'm estimating my private insurance will run about $16,000/yr until I reach 65. Once at 65, hopefully I'll reduce my annual retirement spending for health insurance by $10,000.

I'm also a boat owner. I'm figuring once I reach 75, I'll likely ride on other people's boats rather than my own. That will free up another $10,000 in my annual retirement spending. How do I show these expense reductions on the Planner?

Thanks for your help.
Best Regards,

Re: Inputting figures for future annual spending reductions

Posted: Thu Nov 18, 2010 5:03 pm
by jimr
Hi Marc,

Thanks for the question. The "Additional Inputs" feature of the planner is probably your best bet for handling the special cases you mentioned.

On the main page of the planner where it asks for "Retirement Spending," enter the base expense level that you expect to stay consistent throughout your retirement (current expenses minus boat and extra cost for private health insurance before medicare).

Then click on the "Additional Inputs" button, which will launch a new window where you can enter more details about your plan. Look at the bottom of this new window where you can specify additional details about the "Cash Flows" of your plan (eg income, savings, and expenses).

Here are the steps to follow to enter additional expenses at the bottom of that window:
1) select "Other Expenses" for the cashflow type
2) select "Retirement Year" for start year
3) For end year, select the year that the expense will end (age 65 for health ins. or age 75 for the boat).
4) enter the amount of the expense (10k for health insurance, 10k for boat)
5) Click the Add button to create the expense.

Repeat the above steps for each special expense that you have in your plan. After you click "Run Simulation," be sure to click on the "detail view' tab and verify that the "Planned Expenses" column looks reasonable for each year of your plan.

Hope that helps. Don't hesitate to post again if you have other questions.


Re: Inputting figures for future annual spending reductions

Posted: Fri Nov 19, 2010 8:09 pm
by marc
Thanks Jim,
That's a good approach.