Transcript:
Inflation Adjustment Insight – Overview and Usage
This article explains how to use the Inflation Adjustment Insight in Voyant to model periods of sustained high inflation or deflation within a financial plan. This insight is designed to help advisers demonstrate how changing economic conditions can affect client outcomes and support meaningful planning conversations.
Where to Find the Inflation Adjustment Insight
- Open a client plan.
- Navigate to the Insights section.
- Use the search bar to quickly locate the Inflation Adjustment Insight by typing its name.
- Select the insight to begin.
What the Inflation Adjustment Insight Does
The Inflation Adjustment Insight allows you to:
- Temporarily increase or decrease inflation assumptions
- Apply the adjustment to a specific period of the plan
- Analyze the impact on net worth, goals, and expenses
- Identify any resulting shortfalls caused by inflation changes
This adjustment is modeled on top of the inflation rate already set in Plan Settings.
Understanding “Additional Annual Inflation”
The Additional Annual Inflation field represents the increase or decrease above your existing inflation assumption.
Example:
- Inflation in Plan Settings: 3%
- Desired inflation to model: 5%
- Additional Annual Inflation entered: 2%
This ensures the insight layers the adjustment correctly without overriding your base assumptions.
Setting the Inflation Adjustment Period
You can control when inflation changes apply by:
- Using the timeline slider
- Selecting a specific life stage, such as retirement or working years
Example Scenario:
To model 5% inflation for 10 years during retirement:
- Current inflation in Plan Settings: 2.5%
- Additional Annual Inflation: 2.5%
- Select a 10-year period in retirement
- Click Get Started
Understanding the Results
Once the insight runs, you will see:
- Net worth impact caused by the inflation change
- Any resulting shortfall
- A breakdown of affected plan elements, including:
- Original inflation rate
- Adjusted inflation rate
- Goals and expenses impacted (for example, retirement income or holiday goals)
Comparing to the Original Plan
As with all insights:
- Click Compare Plan
- Choose any chart type (for example, Net Worth)
- Compare results side-by-side with the original plan
This makes it easy to demonstrate the long-term effect of inflation changes visually.
Reviewing Inflation Effects in Year View
To see how inflation impacts expenses year by year:
- Select Year View
- Navigate to Expenses
- Review the years during which the inflation adjustment applies
This view helps pinpoint exactly where costs increase.
What Is and Is Not Adjusted by This Insight
Adjusted for Inflation
- Goals and expenses (excluding gifting goals)
- Pensions and annuities only if they escalate by CPI, RPI, or LPI
- CPI-linked income such as state pensions
Not Adjusted
- Investment and savings accounts
- Income streams not tied to inflation
- Insurance policies
- Tax table assumptions
- Real money calculations
Adjustments During Working Life
If the inflation adjustment is applied during the working life stage:
- Future goals and expenses set at present value will be adjusted
- The updated amounts will appear in the results list
- The revised values reflect the inflation-adjusted cost when those goals occur
Using This Insight with Clients
The Inflation Adjustment Insight is more than a numerical tool—it’s a conversation starter.
Use it to:
- Demonstrate how prolonged inflation affects long-term plans
- Explore mitigation strategies such as:
- Increasing cash reserves
- Adjusting retirement spending
- Considering inflation-linked investments
Need Help?
If you need assistance:
- Click the client name in the top-right corner
- Select Request Support
- Enter your question and share client access if needed
You can also contact Voyant Support directly.