Hi -- I am new to Pralana, and am just working my way through its many features. One thing I noticed in tabular projections/expenses is that "Essential misc expenses" are expressed in present value, while "essential smoothed spending" is expressed current dollars. For example, I input essential misc expenses of $94,000 for 2026, and in the table it is expressed as $83,566 - the original figure discounted by 3 years at the 4% inflation rate. Maybe (even probably) I'm missing something something, but wouldn't it make more sense to use the same $ methodology consistently across the table? Thanks. David
David,
PRC models many different types of expenses, so a totally consistent methodology doesn't make sense (at least, not to me). Smoothed spending is a very broad category and it is assumed that these expenses escalate at the inflation rate. The same is true for phased expenses; however, miscellaneous expenses is intended as a catch-all for one-off expenses that may or may not be adjusted for inflation. Therefore, the user has the option to have it either way, on a line item basis. If your $94,000 is to be adjusted for inflation, you can just click on the COLA? box to make it that way.
Stuart
Stuart, thanks for the info. Since last posting here, I've noticed one straightforward discrepancy. I'm 70 and started collecting SSI last July. The 2023 annual rate for me is $54672, which I entered in the Income section. However, I noticed in the tabular projections/income section, it carried over as $72,491 for 2023. My wife's projected SSI also appears to be overstated. She is 66, and will start claiming in 4/2026. Her first full year of benefits in 2027 is projected to be $42,651, which I entered in the Income section as well (indicating that she will start claiming at 70). However, it is carried over as $55,157 in PRC for 2027. Thanks for your guidance. -- David
Stuart, an update. RE: the SSI issue above, I re-entered the data. For my own SSI claim, I'm not sure what the issue was with PRC, but it resolved itself. For my wife, it was my bad. I had entered her expected benefit in 2026, when she turns 70, instead of her FRA at 66.3 (as the instructions state). Once I corrected that, the right figures carried over correctly. So, a longwinded way of saying "nevermind" ;<] Thanks. -- David
Stuart, sorry to keep coming back, but new issues keep popping up. In the consumption smoothing section of analysis, when "historical" is chosen as the solution type, the program essentially hangs up --- it ran for 12 hours overnight. I had to crash the program to get out of the loop, and had to re-enter inputs that weren't saved. When I did that, the same issue I described above, about the extra SSI amount being carried over into the tabular projections section recurred, and I haven't figured out how to stop making it do that. -- David
@davidz Would you please email (mail@pralanaconsulting.com) me an export file so I can investigate this issue? For some reason the algorithm isn't converging on a solution.
Stuart
@davidz Thanks, I received your export file. Apparently the history-based consumption smoothing algorithm wasn't converging with your data but I made a small tweak to its design and it's converging properly now. I'll release that adjustment in v2.9 in a couple of days.
The issue with your SSI amount was due to you not specifying that your SS benefits had already started. Therefore, PRC assumed the amount you entered was your FRA amount and then applied the 8% per year additional benefit for the years between your FRA and age 70.
Stuart
