Overview
The Inflation Adjustment Insight Report helps illustrate how changes in inflation assumptions may impact a client’s financial plan over time.
Inflation affects both prices and purchasing power. As costs rise, the same amount of money may buy less in the future. This report is useful because it allows the user to model an additional inflation adjustment over a selected timeframe and review how that adjustment impacts the client’s projected cash flow, shortfall, and net worth.
The report is generated from the Inflation Adjustment insight and should reflect the insight scenario results, not the client’s base plan results.
How This Report Is Useful
This report can be used to support conversations with clients about the long-term impact of inflation.
It may be especially helpful when discussing questions such as:
- What happens if inflation is higher than originally expected?
- How would a period of lower inflation affect the plan?
- Could increased inflation create or increase a projected shortfall?
- How might inflation impact the client’s future net worth?
- Are there adjustments the client may need to consider to help protect purchasing power?
By showing the adjusted cash flow, key results, and rate comparison, the report provides a clear way to explain how inflation assumptions affect the overall plan.
Before Generating the Report
Before generating the Inflation Adjustment Insight Report, the Inflation Adjustment insight must be run first.
- To do this, click on insights:
2. Then find "Inflation Adjustment"
Once you're in the insight, you'll want to use the percentage area to insert your inflation adjustment percentage; You can also use the slider tool to adjust which years you'd like to run this insight:
The report is built from the results of the insight scenario. This means the report needs the insight inputs and calculated results before it can accurately display the adjusted cash flow chart, inflation adjustment timeframe, additional annual inflation rate, shortfall, change in net worth, and original versus adjusted rates table.
If the insight has not been run, the report will not have the required insight results to display.
Why this matters
Running the insight first ensures the report reflects the adjusted scenario rather than the client’s base plan. This helps confirm that the report is showing the impact of the selected inflation adjustment and not standard plan data.
Generating the Report
Find Reports on the Tool Bar:
2. Next find the Inflation Insight Report:
What the Report Should Include
The Inflation Adjustment Insight Report should include the following:
- Cash flow chart from the insight results
- Inflation adjustment start and end years
- Additional annual inflation rate
- Shortfall result
- Change in Net Worth result
- Original and Adjusted Rates table
Each section should help explain the effect of the selected inflation adjustment on the client’s plan.