Regular Investments Balance
I'm a new user trying to understand how the calculator uses my input data to produce results so the data and calculations make sense to me. I'm having trouble tracking how the values in the Regular Investments Balance change from year to year. There appears to be little discussion (program or manual) of what parameters, exactly, are used to compute these values. Can you share this information? Thank You.
This is described in a section called "Modeling of Accounts and Cash Flow" on page 9 of the User Manual. The key to this is understanding how the Cash Account works because contributions to the Regular Investments balance occur only one way: overflow from the Cash Account. Otherwise, the Regular account grows due the growth of the underlying assets (fully explained in the Financial Assets sections of the User Manual). Withdrawals from the Regular account occur when the Cash Account has an underflow condition (i.e., withdrawals deplete its balance to its designated floor) and the designated withdrawal order puts the Regular Account at the top of the order, and when the Regular Account is designated as the source of the funds to purchase of annuity. PRC2023 contains a new report that provides the details of the puts and takes for virtually all accounts, so you'll probably find that useful.
Have you considered the Personal Loans feature for modeling unsecured personal loans? The outstanding balance is included in your net worth and, unlike investment loans, the pay-out is done annually with the payments on those going into the Cash account each year.
Regarding your concern over the inflation rate and cash overflows, all PRC calculations are done in terms of future year (ie., then-year dollars) and subsequently converted to today's dollars. The thing that might be causing some confusion is the timing on how inflation adjustments are made to account balances. There's an explanation on that somewhere in the user manual (tabular projections section, I think). Bottom line: if you want to verify PRC's math, you need to do it in future dollars.
Hmmm, no I don't think so. Now that I'm understanding you, though, I think I'm going to add this capability to the candidate list for a future enhancement. Thanks!