Because the projection is showing a year-end value. By year end, one full year of inflation has occurred, which reduces the purchasing power of this year’s Social Security benefit. But the next COLA increase does not apply until January. So at year end, your Social Security benefit is temporarily worth slightly less in today’s dollars, even when the long-term COLA assumption matches [...]
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168 ArticlesI have expenses and cash inflows that I set to move with inflation. But their projected values over time stay the same every year.
The program defaults to showing projections in today's dollars, so if a cash flow has a growth rate equal to the inflation rate, the value in today's dollars will indeed stay the same when looking at the projections. You can turn off showing projections in today's dollars for the graphs and Cash Flow Projections section as seen [...]
Is there an easy way to see which holdings are being used for paying expenses?
You can view how expenses are paid by each investment, both by investment growth and principal [...]
Are living expenses in retirement supposed to include the taxes I pay or are they pre-tax?
Do not include income taxes or taxes on investments in the input for Living Expenses in Retirement. The program calculates these for you. However, you will want to include property taxes in either the Living Expenses in Retirement input or add them as a [...]
The owner of one of my investment accounts should be my wife's, but it has my name. How do I change this?
Open the investment under Cash Flow Inputs > Investment Assets and you can change the Owner field there as you see [...]
Is investment growth used for expenses? If there is investment growth not used, where does it go?
Investment growth will be used for expenses if needed. You can read about the order of income sources used . If there is investment growth left over, it is reinvested back into the investment from which it [...]
What Do Living Expenses In Retirement Include
Expected annual living expenses in retirement: Do not include expected taxes here as the program calculates this separately. Include living expenses such as utility and grocery bills. Make sure you enter this in today's dollar terms. In other words, do not attempt to adjust this figure for inflation. The program will do that for you by using the Annual Inflation setting. Note that you do not have [...]
Does WealthTrace use calendar years for financial projections?
Yes, WealthTrace starts with today's date and ends at 12/31 for the current year. After that, each subsequent year's projections will be from 1/1 through 12/31. With one important caveat, cash inflows, outflows, and the growth of cash inflows, expenses, and investments are pro-rated in the first year based on how many days are remaining in the year. The caveat is that one-time inflows or outflows [...]
Are my Medicare premiums deduction from my Social Security payment automatically in the program?
WealthTrace does not deduct Medicare premiums from the Social Security payment. When entering your Social Security payment, you want to use the total payment. Do not deduct Medicare premiums. The program has an option to for you as a separate [...]
Do the annual return assumptions include inflation, or are these real returns?
The annual return figures used in the program are nominal returns, not real (inflation-adjusted) returns. So inflation has not been taken out of them. Put another way, if you have an annual return of 8% for value stocks, and your inflation assumption is 3%, the real annual return for value stocks would be [...]