QWin: Why does Quicken Lifetime planner show a higher pension amount than I entered in future dollar
Why does Quicken Lifetime planner show a higher pension amount than I entered in future dollars? Why pension is fixed and cannot go up with inflation.
I entered 78000.00 with no cola starting at age 58 and the planner is showing ~85000.00 on the first year of collection. I believe is impossible that 78K will be worth 85K in the future.
I hope someone can explain.
I entered 78000.00 with no cola starting at age 58 and the planner is showing ~85000.00 on the first year of collection. I believe is impossible that 78K will be worth 85K in the future.
I hope someone can explain.
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Quicken is applying you inflation rate to that amount every year until you get to the year that you stated it starts at. After that point is where it starts using the cola rate.
So if you want $78,000 say 10 years from now, you have to calculate the value of your money going down by that rate, for 10 years, and then enter that lower amount.
Questions? Check out the Quicken Windows FAQ list
Say you want to plan on buying a car every 10 years in today's money figure $30,000.
You select Expenses -> Special Expense -> New
The first thing that you notice is inflation isn't mentioned.
And sure enough if you put in $30,000 for 10 years it just uses the $30,000 for the amount in future values. And in today's values it will be lower than $30,000 depending on the inflation rate you have set.
Well it is an asset so how about recording it there?
It looks more promising there is a place to put in the inflation rate, but no, it is what it is going to do after you acquire it, just like on the pension.
Seems easy enough to add the option of using either today's or future value - is there any way to know if that has been or would be considered?
With a little work, the Lifetime Planner could be a particularly useful tool. Silly faults such as this pension input, RMD errors, and SS problems mentioned elsewhere, however, make it difficult to recommend.
With all the financial information available within the program, Quicken could easily compete with (or partner with, depending on corporate strategy) web-based tools that currently require manual entry (perhaps taken from Quicken reports). Could be a solid functionality increase, if only....
Questions? Check out the Quicken Windows FAQ list