"Inflation adj" checkbox works but spreadsheet column is very misleading.

[music-and-ski]

My mom's pension isn't indexed to inflation. So, I uncheck the box "Inflation adj". When I download the detailed spreadsheet, it shows a column of pension adjusted for inflation regardless of the state of that checkbox. But, the year-by-year starting balances seems to be correct.

Here's an example. I put in $10000 non-inflation adjusted. The spreadsheet downloaded shows the value increasing in the "Withdrawal Change 1" column.

I was terrified for a moment! I'm glad I was able to check the "Starting Portfolio" calculation, which I think is correct. It's just the data year-by-year in the column that's misleading:

Withdrawal Change 1
10364.9635
11338.19951
12676.39903
13527.98054
14233.57664
15206.81265
16618.00487
18929.44039
21167.88321
22944.03893
23795.62044
24793.18735

 

[ERD50]

IIRC, we've decided that the spreadsheet is a separate output that might not tie directly to the computations for the final output? Or, it might get corrected/adjusted somewhere else?

I'd suggest to try some very simple numbers to verify what it's doing. There's another tool that provides an output for any year you select, that might help: https://ficalc.app/

edit: Wait a minute, I'd expect the "withdrawal Change" to increase, that reflects inflation for that year. Pension is income.

2nd edit: OK, I think that column name doesn't change when you change that entry from income or spending, it just calls it "withdrawal" (probably changes sign). I clicked inflation adjusted and that column didn't change, but the end portfolio looked better ( more positive, as expected with an inflation adjusted pension vs non-inflation). So I guess that is adjusted elsewhere.

-ERD50

 

[music-and-ski]

I'd suggest to try some very simple numbers to verify what it's doing.

I did that. See the link I posted. The second part of the spreadsheet does not match the first part, proving that the spreadsheet is wrong. But, if I copy the fixed value over the inflation adjusted values for the entire column, then everything matches. So, the calculations are correct inside of Firecalc. It's just that the spreadsheet that is generated mistakenly puts in inflation-adjusted numbers in the column even after the user unchecks the box.

edit: Wait a minute, I'd expect the "withdrawal Change" to increase, that reflects inflation for that year. Pension is income.
-ERD50

Sadly I was told by my dad that his pension (that my mom is collecting as a survivor) isn't indexed. But, my dad wasn't that savvy on these things, maybe he was wrong! Most pensions are indexed, which is probably why no-one noticed this before.

THANKS.

 

[ERD50]

....
Sadly I was told by my dad that his pension (that my mom is collecting as a survivor) isn't indexed. But, my dad wasn't that savvy on these things, maybe he was wrong! Most pensions are indexed, which is probably why no-one noticed this before.

THANKS.

Not most private pensions. In fact, I think it's rare. Private pensions, or at least all I'm familiar with, are insured by payments to the PBGC, and I don't think they cover any sort of inflation index in their guarantees.

Public pensions - yep, all that I know of (just a few) have some form of inflation index.

DW's small pension is a 'COLA-lite', a 3% non-compounding increase each year.

-ERD50