Telly
Thinks s/he gets paid by the post
- Joined
- Feb 22, 2003
- Messages
- 2,419
Hi,
I have been playing with FireCalc, and other calculators too. I like FireCalc's inclusion of Soc. Sec. into the mix. Here are my questions:
Quest. #1:
For S.S., when it says "uses inflation adjusted dollars", how should I interpret that?
For example, if I knew that my annual S.S. benefit in TODAY'S dollars was $10,000, but would not actually draw it till year 12, what does it do? Does it take the $10,000 TODAY, adjust UPWARDS for whatever inflation was in the respective 12 year period in the model, and use that as the starting amount for drawing S.S? Does it do that?
Does it then also adjust it upwards each year that the benefit is taken (years 12 - and on), at 100% of the inflation index for each successive year taken?
Quest. #2
Withdrawal Change, Inflation-Adjusted or not.
I understand that if I have a defined-Benefit Pension that starts in 5 years, I would enter the amount, and year 5, and turn OFF the inflation adjustment.
But what about a predicted reduction in income needed in the future? Say I projected that in 5 years that my income needs would drop by 10,000 of TODAY's dollars. Do I input $10,000, and 5 years, and turn ON Inflation-Adjusted?
I would want the $10,000 reduction (adjusted upwards to something greater for the inflation to year 5) to occur in year 5, and in year 6, the income start to increase inflation-adjusted from the new base established in year 5. Will all that happen by turning ON the Inflation-Adjustment for that FireCalc Withdrawal Change?
Thanks for any help given
I have been playing with FireCalc, and other calculators too. I like FireCalc's inclusion of Soc. Sec. into the mix. Here are my questions:
Quest. #1:
For S.S., when it says "uses inflation adjusted dollars", how should I interpret that?
For example, if I knew that my annual S.S. benefit in TODAY'S dollars was $10,000, but would not actually draw it till year 12, what does it do? Does it take the $10,000 TODAY, adjust UPWARDS for whatever inflation was in the respective 12 year period in the model, and use that as the starting amount for drawing S.S? Does it do that?
Does it then also adjust it upwards each year that the benefit is taken (years 12 - and on), at 100% of the inflation index for each successive year taken?
Quest. #2
Withdrawal Change, Inflation-Adjusted or not.
I understand that if I have a defined-Benefit Pension that starts in 5 years, I would enter the amount, and year 5, and turn OFF the inflation adjustment.
But what about a predicted reduction in income needed in the future? Say I projected that in 5 years that my income needs would drop by 10,000 of TODAY's dollars. Do I input $10,000, and 5 years, and turn ON Inflation-Adjusted?
I would want the $10,000 reduction (adjusted upwards to something greater for the inflation to year 5) to occur in year 5, and in year 6, the income start to increase inflation-adjusted from the new base established in year 5. Will all that happen by turning ON the Inflation-Adjustment for that FireCalc Withdrawal Change?
Thanks for any help given