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adjust your inputs for inflation  

 

Jo G
(@jo-g)
Active MemberCustomer
Joined: 2 months ago
Posts: 11
Topic starter  

manual pg 116

"Explanation of Variable Spending

… You should also revisit this analysis at least annually after updating PRC with your latest information to evaluate potential changes to your spending as a function of market performance, changes in inflation, and other factors."

Curious when and or how often you guys adjust your inputs for inflation on the Home page? On an annual basis? Do you input the latest inflation figure from the government as one of your scenarios? Or any other comments you want to share about how you arrive at your inflation figure.

Inflation is a biggie when planning, and to complicate it , it seems that many things aren't included in the government's figure. Thank you.

PRC Gold 2021, a rookie/beginner to both PRC & Excel


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Greg Golich
(@golich428)
New MemberCustomer
Joined: 2 months ago
Posts: 3
 

I only make changes to inflation on an annual basis when I update everything else. I have looked at the sensitivity of my plan to inflation two different ways. Keeping all other inputs the same, I have created scenarios using my expected rate and much higher rates in the other two scenarios. The other way to look at the sensitivity is to use the sensitivity tab and do the what if?

To come up with an inflation value to use, I consider several things: 1. recent history (10 years), 2. results of various consumer surveys of expected inflation for the next 10 years, 3. market expected inflation base on TIP's and Treasury Nominal Bond rates and 4. FOMC monetary policy. Hope that helps.


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Michael Larimer
(@michaellarimer)
New MemberCustomer
Joined: 1 month ago
Posts: 1
 

New user of PRC Gold...was curious if someone would like to share some typical inflation numbers...

I've kept the 3% General Inflation rate, which is high for now but probably OK over time...

And have a hunch healthcare is a lot higher, have read maybe 15 to 20%...

This already may be in the Forum somewhere, if so just point me there...

Thanks... 😎


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