Withdrawals not being inflated

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widebob
Posts: 5
Joined: Wed Mar 18, 2015 1:17 pm

Withdrawals not being inflated

Post by widebob »

i have run some tests using different inflation rate inputs, but none of the runs have the withdrawals being inflated over time. Any ideas?

jimr
Posts: 596
Joined: Thu Feb 28, 2008 6:48 pm

Re: Withdrawals not being inflated

Post by jimr »

All of amounts in the planner are shown in present value dollars.

The best way to see the impact of inflation is to set up a NO COLA cash flow in additional inputs (say for expenses). When you look in the year-by-year detailed view table, you'll see the cash flow actually decreasing, to show its inflation adjusted value declining.

lbhough
Posts: 10
Joined: Tue Dec 02, 2014 8:40 am

Re: Withdrawals not being inflated

Post by lbhough »

Hi Jim - I think I understand that you include inflation in all the calculations as stipulated in the input tables. And I understand that all the output data are showing 'present values'. Am I correct in assuming if I wanted to convert your output table to future values, I could correct each dollar value by the inflation factor ? so if inflation is 2% / year, a value of $100 in your table in years 1, 2, and 3 would have the values 100, 102, 106, etc.

Shouldnt this work ? thanks !

jimr
Posts: 596
Joined: Thu Feb 28, 2008 6:48 pm

Re: Withdrawals not being inflated

Post by jimr »

Yes. I think you've got it.

With compounding the exact sequence of inflated values in your example will be $100, $102, $104.04, $106.12.

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