FIREcalc and inflation assumptions

[Twild]

Am I correct in my assumption that that Firecalc uses historical data for rates of returns on stocks and bonds, but uses a fixed inflation rate for simulation? If this is so it seems to me that what really matters for portfolio sustainability is not inflation, or the rate of return, but the differential between them. Historically when inflation rises so does the yield on fixed income vehicles. Wouldn't it be better to incorporate this differential between historical bonds and inflation in the model?

[Coach]

I believe FIRECalc by default uses historical CPI for inflation rate. You can select alternatives -- historical PPI or a fixed rate -- on the "Spending Models" tab.

Coach

[youbet]

Quote:

Originally Posted by Twild Am I correct in my assumption

No.

I agree with Coach's explanation.