Before You Use This Planner
This planner is for educational cash-flow projection only. It is not financial, investment, tax, legal, medical, or retirement-planning advice. Results are shown primarily in today's dollars (inflation-adjusted purchasing power), also called real dollars, so users can think in terms of current purchasing power rather than inflated future dollars. Results depend entirely on the assumptions you enter, including inflation, pension COLA, CCRC fee increases above inflation, real investment return, asset drawdowns, and the number of years projected.
This planner projects the period you expect to remain in the independent living level of a retirement community or Continuing Care Retirement Community (CCRC). It does not estimate assisted living, memory care, skilled nursing, health care, tax effects, refundable entrance-fee provisions, or future care-level changes.
Age is not required because calculations are based on the year you expect to enter the independent living level and number of years you expect to stay at that level. Before making a major decision, review your numbers with qualified financial, tax, legal, and family advisers.
Understanding Today's Dollars
This planner shows most values in today's dollars, also called inflation-adjusted purchasing power. This approach helps users compare future years using current purchasing power instead of inflated future dollar amounts.
General inflation is removed from the projections so future years can be compared more easily using current purchasing power instead of inflated future dollar amounts.
- Social Security is generally shown as level in today's dollars because Social Security COLA is assumed to approximately offset ordinary inflation.
- Ordinary non-housing living expenses are also generally shown as level because they are assumed to rise approximately with general inflation.
- A pension without COLA loses purchasing power over time and therefore declines in today's dollars.
- CCRC fee increases are entered only as increases above normal inflation. For example, if general inflation is expected to average 3% and CCRC fees are expected to rise 5%, enter 2% as the CCRC increase above inflation.
- Investment return is entered as real return after inflation. For example, if investments are expected to earn 6% yearly and inflation is expected to average 3%, the real return would be approximately 3%.
Planner Summary
Yearly Cash Flow Report
All table amounts are shown in today's dollars / real purchasing power. Investment Return shows the yearly real-dollar return applied to remaining investments after annual income and expenses are considered.
| Year | Pension | Planned Monthly Asset Withdrawals |
Social Security |
Total Income |
Non-Housing Expenses |
CCRC Fees |
Total Expenses |
Net Cash Flow Before Investment Growth |
Investment Return |
Ending Assets |
|---|
Underlying Calculations
- Pension: fixed nominal pension is reduced each year to show declining real purchasing power. If pension COLA is selected, the pension is adjusted by the relationship between pension COLA and inflation.
- Planned Monthly Asset Withdrawals: shown as cash available for expenses in today's dollars, but treated as coming from the retiree's own assets.
- Social Security: treated as level in today's dollars because Social Security COLA is assumed to approximately offset inflation.
- Non-Housing Expenses: treated as level in today's dollars because Social Security COLA is assumed to approximately offset inflation.
- CCRC Fees:fee increases are entered as increases ABOVE normal inflation because the planner already removes general inflation when showing today's-dollar purchasing power.
- Net Cash Flow Before Investment Growth: total cash available minus total expenses, shown in today's dollars.
- Investment Return the real-dollar investment return applied to remaining investments after annual income and expenses are considered.
- Ending Assets: beginning assets plus outside income, minus expenses, plus or minus real investment growth or loss. Asset drawdowns are shown as cash available, but they are not counted as outside income because they come from the retiree's own assets.