Why does the pension amount decrease over time


The federal gov't pension includes a COLA (just like social security). When inputting the pension information I enter the degree of inflation index amount equal to the inflation number entered in assumptions. I would expect the pension to then report as the same value in each future year (just like social security values). However, the pension amount decreases each year. So, it is still being discounted.


dan royer's picture

That indexing assumption works a little differently than you imagine. If the pension is fully indexed to inflation, then enter 100%. This will cause the amount to stay constant all the way down the column (i.e., it will get the COLA just like SS).

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