Inflation Assumptions

Customize Global Inflation Rates in RightCapital

Aligning assumptions with your desired outcomes is essential in ensuring tailored advice for each financial plan. The °°° More Menu > Assumptions > Inflation tab of the Advisor Portal allows you to review and update five inflation rates that will be used by RightCapital's Monte Carlo and Cash Flow projections. Your selections here will be used as the global inflation assumptions across all of your client plans:

Default Inflation Assumptions

RightCapital uses five different inflation assumptions to project goals and expenses. The default inflation assumptions were derived by referencing studies and planning tools from leading financial institutions and industry experts. We plan to review the data on an annual basis. The default inflation assumptions are as follows:

Inflation Type

Default Value

General inflation:


Health care cost inflation:


Education cost inflation:


Social Security inflation:


Tax inflation:


General Inflation

The first inflation type is General Inflation. This inflation rate is used to adjust living expenses and general goals. The general inflation rate is also used for a number of other functions in RightCapital, including:

Health Care Cost Inflation

The Health Care Cost Inflation rate is used to adjust the Health Care and LTC expenses within RightCapital. This inflation rate will be used for:

Education Cost Inflation

The Education Cost Inflation rate is used to adjust education goals within RightCapital. This inflation rate will be used for:

Social Security Inflation

The Social Security Inflation rate is used to adjust the following:
  • Social Security payments every year, both prior to filing and for those who have already started receiving benefits

  • PIA bend points, earnings test (AET) exempt amounts, and other variables needed to calculate social security benefits

  • The Social Security salary base (also known as the taxable wage base) every year for the purpose of calculating the maximum Social Security benefit

The default Social Security inflation rate of 2.5% is based on historical cost of living adjustments (COLA) by the SSA.

Tax Inflation

The Tax Inflation rate is used to adjust a number of contribution limits and tax bracket thresholds, including:
  • Yearly contribution limits for retirement accounts (employer-sponsored plans and IRAs)

  • Ordinary income, capital gains, and medicare premium (IRMAA) tax bracket thresholds

  • Estate tax exemption thresholds (federal and state)

Inflation Timing For Future Items

Underneath the five inflation rates, advisors have the ability to specify whether the values entered for cash flow items such as goals, income, savings, or expenses will 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, real estate income, or asset/property purchase goals. This is exclusively a global setting, and cannot be adjusted on a client-by-client basis.

Client-Specific Inflation Assumptions

Global assumptions in RightCapital are used as a starting point whenever you create a new household. However, within the Gear Icon > Settings > Other Assumptions tab of each client plan, you can choose to change the inflation assumptions for just that individual plan. Making changes to inflation assumptions here will not impact your global assumptions or any of your other financial plans:
Contact Us

For additional assistance within RightCapital please contact our Support team.

Educational Webinars

RightCapital is committed to enabling your success. Each week, we cover essential planning modules and product updates.

RightCapital in Action

Check out our YouTube channel where we highlight Advisor Success Stories and share more Tips & Tricks!