Data Entry: Global Inflation Assumptions
Review and customize inflation assumptions
Navigate to Advisor Portal > Assumptions > Inflation to review and update inflation assumptions.
Default inflation assumptions
RightCapital uses five different inflation assumptions to project goals and expenses. The inflation assumptions are global variables that can be customized.
Inflation assumptions were derived by referencing studies and planning tools from leading financial institutions and industry experts. Historical return data (over the past 40 years) was used to derive the default return assumptions. The inflation assumptions are as follows. We plan to review the data on an annual basis.
Custom inflation assumptions
Advisors can set the inflation rates within the Assumption section. Any adjustments will apply globally across all client plans. This inflation will be used in the following way:
General inflation: Adjust expenses and general goals
Health care cost inflation: Adjust the health care expenses and LTC
Education cost inflation: Adjust the college goals
Social Security inflation: Used for the following calculations:
- Adjust the social security payment every year for those who have started the benefit.
- Adjust PIA Bend point and other variables needed to calculate social security benefit.
- Adjust the Social security salary base every year for the purpose of calculating maximum social security benefit.
Tax inflation: Used for the following calculations
- Adjust the max contributions on employer-sponsored plans and IRAs
- Adjust taxable income brackets
Under the global inflation settings advisors have the ability to specify whether the values entered for cash flow items such as goals, income, savings, or expenses inflate between now and the start date of the item.
If the box is checked, items with a future start date will be adjusted for inflation beginning today. This will not impact pension income, annuity income, loan income, business income, estate income or asset/property purchase goals.