Pension And Social Security Payments Are Decreasing Over Time
I looked at my cash flow projections and my pension and Social Security payments are decreasing over time. Why is this?
This happens when the pension and Social Security payments are not keeping up with inflation. If their growth rate is less than the ‘Annual Inflation’ setting, then in today’s dollar terms, these payments are indeed decreasing. The program defaults to showing projected cash flows in today's dollar terms, but you can turn this assumption off using the setting 'Show All Outputs/Graphs In Today's Dollars'.
In the example below, COLA (which Social Security payments grow by) is less than ‘Annual Inflation.’ Also, the pension payments don’t grow at all, which means they don’t keep up with inflation either.