Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
How Does Inflation Adjusted Work
Old 10-06-2005, 09:15 PM   #1
Dryer sheet aficionado
 
Join Date: May 2004
Posts: 44
How Does Inflation Adjusted Work

My question is how to input into FIRECalc an expected addition to my portfolio that will be, for example, $200,000 in year 24? The worksheet says it will use inflation adjusted numbers. What does that mean for my situation? Should I just enter the $200k in year 24 or enter an amount that is adjusted down for year 1 so that it would roughly equal $200K in year 24 (i.e at 3% inflation, it'd be worth about $100K in yr 1) and so would enter only $100K in year 24. May be making this more complicated than needed but appreciate your help so I don't over/under estimate the effect of this addition in the future. Thanks.
__________________

__________________
astroboy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: How Does Inflation Adjusted Work
Old 10-07-2005, 02:20 AM   #2
Full time employment: Posting here.
bosco's Avatar
 
Join Date: Jul 2005
Posts: 987
Re: How Does Inflation Adjusted Work

Quote:
Originally Posted by astroboy
My question is how to input into FIRECalc an expected addition to my portfolio that will be, for example, $200,000 in year 24? The worksheet says it will use inflation adjusted numbers. What does that mean for my situation? Should I just enter the $200k in year 24 or enter an amount that is adjusted down for year 1 so that it would roughly equal $200K in year 24 (i.e at 3% inflation, it'd be worth about $100K in yr 1) and so would enter only $100K in year 24. May be making this more complicated than needed but appreciate your help so I don't over/under estimate the effect of this addition in the future. Thanks.
If the $200k you are referring to is in today's dollars, then enter it as $200k. If you will be receiving $200k in 24 years with no inflation adjustment, (worth maybe 75 or 80k in today's dollars), then enter 75 or 80k or whatever fits your inflation assumptions. Best to keep everything in current dollars, and that's what these calculators typically do.
__________________
I have an inferiority complex, but it's not a very good one.
bosco is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Inflation Adjusted Results babyape FIRECalc support 1 03-15-2007 03:45 PM
Please talk me out of continuing to work! tangomonster Hi, I am... 31 07-11-2006 07:21 PM
Inflation and CPI sgeeeee FIRE and Money 6 01-21-2005 08:18 PM
Inflation or No Inflation? Donner FIRE and Money 16 01-19-2005 01:58 PM
Inflation assumptions Peter FIRE and Money 5 12-19-2003 01:48 PM

 

 
All times are GMT -6. The time now is 02:47 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.