Dollars vs. Today's Dollars in Pension and Annuities tab
Specifying D or TD in Pension and Annuities tab has no effect on annual payout of pension. The pension shows a 3% decline per year in both cases. How do I get this to report correctly?
Specifying D or TD in Pension and Annuities tab has no effect on annual payout of pension. The pension shows a 3% decline per year in both cases. How do I get this to report correctly?
View our range of other financial planning products powered by the Economic Security Computation Engine
Disclaimer: The suggestions and recommendations provided by Economic Security Planning, Inc.'s software tools and planning services do not constitute financial or investment advice. The creators of Economic Security Planning's software are not certified, registered, authorized, or any other form of financial planners. Economic Security Planning, Inc. is not an investment adviser registered with the U.S. Securities and Exchange Commission or any state securities agency, is not a registered broker-dealer and maintains no other regulatory credentials associated with the management of financial assets. Economic Security Planning, Inc. does not guarantee that the suggestions and recommendations derived from its software tools and planning services will necessarily achieve a secure economic plan. Like any software products, Economic Security Planning, Inc.'s software tools may have errors in its underlying code, and the assumptions about the future that it makes and that users input may prove false. In addition, output from the software tools and planning services may incorporate data obtained from third parties and such data (including any calculations that is based on such data) is provided on an “as is” basis. From time to time the output may contain errors that may be based upon, among other things, human data entry, aggregation and decompilation of data, processing of data through third party calculation engines and other processes that can give rise to errors. The company's financial plans and recommendations, including all of such plans and recommendations provided by its direct planning services, should be viewed as suggestive and informative educational inputs into your financial decision-making. None of our products or services recommend the purchase of specific financial products.
Copyright © 2023, ESPlanner || Patent Number: US 6611807 B1
Design by Zymphonies
Comments
dan royer
Sat, 03/07/2015 - 17:07
Permalink
The D or TD will impact the
The D or TD will impact the amount it shows in a future year--but set to 100% if you want it to fully keep pace with inflation, 50% if you want it to track inflation at half, etc.
bencro
Sat, 11/07/2015 - 20:13
Permalink
There are other fields that
There are other fields that offer a choice between Today's Dollars or Dollars (Special Expenditures is one). What is the definition of "Today's Dollars" and what is the definition of "Dollars" in this context?
dan royer
Mon, 11/09/2015 - 19:59
Permalink
Today's dollars always refers
Today's dollars always refers to dollars denominated in the dollars of the current year--2015 as I type now. "Dollars" is referring to the nominal amount, not the inflation-adjusted amount. So if inflation is at 3% then next year if you had a special receipt of $100 it would want to know if you want that amount denominated in 2015 dollars--in which case you'd enter it as today's dollars, and you'd see it enter as $103. But perhaps it's just somebody that owes you $100 and they said they'd pay you next year. Since there was no discussion about interest or adjusting for inflation, you'd simply get paid in "dollars" which means when you put that in it would show up as $97 in "today's dollars" which is the same as $100 in 2016.
Or say I have a friend that is paying child support of 10K per year for the next 5 years. The court didn't tell him he has to adjust for inflation each year, so he's simply paying in "dollars" and when we enter it in "dollars" we see that the $10K is actually getting easier to pay each year, cheaper, because he is paying off with cheaper dollars each year--much like a mortgage.
If you are going to put in a special expense for a new furnace in 5 years. Say that would cost you $3000 today. So should you enter it as a $3K expense in dollars or today's dollars for five years from now? I'd enter it in today's dollars because I want to assume that the price of that furnace is going to go up with inflation each year. On the other hand, I guess I could say to myself--hey, I'm going to put these three $1000 bills in this jar and get them out in 5 years and I'm going to buy what I can buy with them in five years. In that case, I'd enter it as "dollars."