Hi. Question on growth rates from a new user.
From the Tabular Projections tab, I copied the Account Balances from the Account subtab, and the Growth balances from the Growth subtab into a separate spreadsheet. I then did a simple calculation of growth balances/account balances to reverse engineer the actual growth rates (the second table below) to confirm it matches the rates set in the Asset Class RoRs (first table below)
(I kept the default 3% inflation rate, so growth rate should equal first table +3%. Period 1 is therefore 7.2% across all Asset categories. Period 2 = 6.7%. Period 3 = 6.4%)
As you can see from the second table, the reverse-engineered growth rates are not consistent. The Roth growth rates are spot on after year 7, but in early years it's a bit more than 7.2% The other rates have a variability that is anywhere from a rounding error to something more significant, especially in the first few years.
Maybe this has to do with taxes? or Cashflows?
Re: Cashflows. Note for example in 2030 in Growth of Regular Investments the RoR is 6.21%. In that year I separately have a major expense (house purchase) that draws from the Regular Investments. So perhaps that impacts that year's withdrawal. But why would those first few years be so much higher than the 7.2%?
Thanks in advance!
RoR Growth Rate Inputs from Asset Class Tab
| Year | Regular | Your Tax-Deferred | Spouse Tax-Deferred | Roth | |
| Period 1 | 2024 | 4.20% | 4.20% | 4.20% | 4.20% |
| Period 2 | 2034 | 3.70% | 3.70% | 3.70% | 3.70% |
| Period 3 | 2044 | 3.40% | 3.40% | 3.40% | 3.40% |
My reverse engineered growth rates. Formula = growth balances/account balances
| Growth of Regular Investments | Growth of Husband's Tax-Deferred Savings | Growth of Wife's Tax-Deferred Savings | Growth of Roth Savings | Period | |
| 2024 / 54 / 50 | 10.01% | 7.20% | 7.26% | 7.42% | Period 1 = 7.20% |
| 2025 / 55 / 51 | 8.00% | 7.20% | 7.26% | 7.40% | |
| 2026 / 56 / 52 | 7.82% | 7.20% | 7.26% | 7.39% | |
| 2027 / 57 / 53 | 7.69% | 7.20% | 7.25% | 7.37% | |
| 2028 / 58 / 54 | 7.60% | 7.20% | 7.25% | 7.36% | |
| 2029 / 59 / 55 | 7.32% | 7.20% | 7.21% | 7.23% | |
| 2030 / 60 / 56 | 6.21% | 7.20% | 7.20% | 7.20% | |
| 2031 / 61 / 57 | 7.05% | 7.20% | 7.20% | 7.20% | |
| 2032 / 62 / 58 | 6.98% | 7.20% | 7.20% | 7.20% | |
| 2033 / 63 / 59 | 7.03% | 7.20% | 7.20% | 7.20% | |
| 2034 / 64 / 60 | 6.54% | 6.70% | 6.70% | 6.70% | Period 2 = 6.70% |
| 2035 / 65 / 61 | 6.53% | 6.70% | 6.70% | 6.70% | |
| 2036 / 66 / 62 | 6.53% | 6.70% | 6.70% | 6.70% | |
| 2037 / 67 / 63 | 6.53% | 6.70% | 6.70% | 6.70% | |
| 2038 / 68 / 64 | 6.52% | 6.70% | 6.70% | 6.70% | |
| 2039 / 69 / 65 | 6.52% | 6.70% | 6.70% | 6.70% | |
| 2040 / 70 / 66 | 6.53% | 6.70% | 6.70% | 6.70% | |
| 2041 / 71 / 67 | 6.52% | 6.70% | 6.70% | 6.70% | |
| 2042 / 72 / 68 | 6.52% | 6.70% | 6.70% | 6.70% | |
| 2043 / 73 / 69 | 6.54% | 6.70% | 6.70% | 6.70% | |
| 2044 / 74 / 70 | 6.30% | 6.27% | 6.40% | 6.40% | Period 3 = 6.4% |
| 2045 / 75 / 71 | 6.29% | 6.26% | 6.40% | 6.40% | |
| 2046 / 76 / 72 | 6.30% | 6.26% | 6.40% | 6.40% | |
| 2047 / 77 / 73 | 6.30% | 6.25% | 6.40% | 6.40% | |
| 2048 / 78 / 74 | 6.35% | 6.25% | 6.27% | 6.40% | |
| 2049 / 79 / 75 | 6.33% | 6.24% | 6.26% | 6.40% | |
| 2050 / 80 / 76 | 6.34% | 6.24% | 6.26% | 6.40% | |
| 2051 / 81 / 77 | 6.34% | 6.23% | 6.25% | 6.40% | |
| 2052 / 82 / 78 | 6.34% | 6.22% | 6.25% | 6.40% | |
| 2053 / 83 / 79 | 6.35% | 6.21% | 6.24% | 6.40% | |
| 2054 / 84 / 80 | 6.35% | 6.20% | 6.24% | 6.40% | |
| 2055 / 85 / 81 | 6.35% | 6.19% | 6.23% | 6.40% | |
| 2056 / 86 / 82 | 6.35% | 6.18% | 6.22% | 6.40% | |
| 2057 / 87 / 83 | 6.35% | 6.17% | 6.21% | 6.40% | |
| 2058 / 88 / 84 | 6.35% | 6.15% | 6.20% | 6.40% | |
| 2059 / 89 / 85 | 6.36% | 6.14% | 6.19% | 6.40% | |
| 2060 / 90 / 86 | 6.36% | 6.12% | 6.18% | 6.40% | |
| 2061 / 91 / 87 | 6.36% | 6.10% | 6.17% | 6.40% | |
| 2062 / 92 / 88 | 6.36% | 6.08% | 6.15% | 6.40% | |
| 2063 / 93 / 89 | 6.36% | 6.06% | 6.14% | 6.40% | |
| 2064 / 94 / 90 | 6.36% | 6.04% | 6.12% | 6.40% | |
| 2065 / 95 / 91 | 6.36% | 6.02% | 6.10% | 6.40% | |
| 2066 / 96 / 92 | 6.36% | 5.99% | 6.08% | 6.40% | |
| 2067 / 97 / 93 | 6.36% | 5.96% | 6.06% | 6.40% | |
| 2068 / 98 / 94 | 6.36% | 5.93% | 6.04% | 6.40% | |
| 2069 / 99 / 95 | 6.35% | 5.90% | 6.02% | 6.40% | |
| 2070 / / 96 | 6.36% | 5.99% | 5.99% | 6.40% | |
| 2071 / / 97 | 6.36% | 5.96% | 5.96% | 6.40% | |
| 2072 / / 98 | 6.36% | 5.93% | 5.93% | 6.40% | |
| 2073 / / 99 | 1.28% | 1.18% | 1.18% | 1.28% | |
| 2074 / / | 0.00% | 0.00% | 0.00% | 0.00% |
@kpress I cannot answer this conclusively without seeing your actual file, but I'll just bring up two questions:
1) Do you have the Account Growth Timing set to mid-year on the Financial Assets > Management page? If so, it would definitely be affecting your analysis and it's not likely that you could reverse engineer it accurately.
2) If you have the Account Growth Timing set to start-of-the-year on the Financial Assets > Management page, are you using the prior year ending balance divided by the current year growth amount when calculating the annual growth? That's the way the tool does it.
If neither of these explains what you're seeing, you can send me a representative export file and I'll be happy to check it out.
Stuart
Thanks Stuart. It was the Account Growth Timing set to mid-year. I switched to start of year, and it's now consistent and accurate. Thank you!
