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lifetime planner inflation adjustment

Vincent SheuVincent Sheu Member ✭✭
I am using the latest Quicken Premier 2017 R4. Regarding the lifetime planner, it is not clear how it adjust with inflation (set at 3%). For example, if my social security benefit is $1000, does it adjust to $1030 in the next year, then add another 3% in the next year...? Also, if I set my monthly expense to be, say, $3000, does it adjust my monthly expense to be $3090 monthly in the next year and then add another 3% in the following year and so forth?

Comments

  • UnknownUnknown Member
    edited March 2017
    In the Quicken 2017 HELP File: 

    Inflation

    Inflation rate is the percentage you expect the cost of living to rise each year. The Life Event Planners increase your living expenses by this amount each year unless you specify a different rate of increase.


    Since your social security is NOT based on the rate of inflation, your social security is NOT adjusted.  COLA (cost of living adjustments) which increases your social security annual amount need to be accounted for by changing the social security income entry manually. 

  • Vincent SheuVincent Sheu Member ✭✭
    edited October 2018
    Thank you, gmalis1.
    Just to clarify, once I started collecting social security benefit, I should go into the retirement planner and change current year's benefit based on current year's COLA, right?
  • UnknownUnknown Member
    edited March 2017

    Thank you, gmalis1.
    Just to clarify, once I started collecting social security benefit, I should go into the retirement planner and change current year's benefit based on current year's COLA, right?

    That is correct.  The thing about the retirement planner, it's not a static thing.  You will have to make adjustments in the data as you go along sometimes.

    The social security benefit is one of those that you will need to manually update annually.  Even before your retirement and collecting social security, that amount does change from year to year based on your income for the past years and the COLA.  

    I periodically go to SSA.gov and check that amount (like every six months or so).  
  • Vincent SheuVincent Sheu Member ✭✭
    edited March 2017

    Thank you, gmalis1.
    Just to clarify, once I started collecting social security benefit, I should go into the retirement planner and change current year's benefit based on current year's COLA, right?

    Thank you.  Really appreciated.
  • UnknownUnknown Member
    edited March 2017

    Thank you, gmalis1.
    Just to clarify, once I started collecting social security benefit, I should go into the retirement planner and change current year's benefit based on current year's COLA, right?

    Even though I agree that what you should be doing in retirement (adjusting it when you know the actual amount), when I look at what the Lifetime Planner is doing, it does take into account inflation, but the assumption is that the COLA is equal to the inflation number you set.

    If you look at the number for social security in each year you will see that it stays the same.  It can't do that if inflation wasn't being compensated for.

    If you enter a salary, and say set the yearly increase to zero, you will see the affects of inflation as each year Quicken will show a smaller and smaller number.

    This what you should expect when you look at any income that is being shown in today's values, and isn't keeping up with inflation.

    The fact that the Social Security number is constant in today's value amounts implies that it is exactly keeping up with inflation.  If you switch the graph to future value amounts you will see the Social Security number increasing.  And it will be increasing by the amount you set for inflation.
  • UnknownUnknown Member
    edited March 2017

    Thank you, gmalis1.
    Just to clarify, once I started collecting social security benefit, I should go into the retirement planner and change current year's benefit based on current year's COLA, right?

    BTW Note that you can reduce the prediction for Social Security by a percentage.  So if you feel that your inflation rate is going to be say 4%, but the government's number for Social Security is going to be 3% then you can adjust it down by 1%.
  • UnknownUnknown Member
    edited October 2018
    "does it adjust my monthly expense to be $3090 monthly in the next year
    and then add another 3% in the following year and so forth?
    "

    Yes, provided that you put in an inflation rate of 3%.

    Look at these examples (note inflation set to 4%):
    Today's values:
    image
    image
    Future value numbers:
    image
    image
  • UnknownUnknown Member
    edited October 2018
    To change to future value numbers, select the gear icon in the Plan: Results graph.
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