In this video, you will be walked through how to use the steps feature to adjust for a period of higher inflation in your plan.
Transcript
In this video, I will walk you through how to account for higher inflation in your client’s plan for a set number of years.
First, go down to the Expenses section. In this plan, I have a single entry for General Living Expenses, but you may have multiple entries, and you can apply the same methodology to each one. Open the expense, and at the bottom, you’ll see the Inflation Rate being applied, currently set at 2.5% year on year for the life of the plan.
I want to adjust this for a few years to account for higher inflation, so I’ll temporarily set it to 5%.
Next, go to Steps. Right now, this 5% rate would apply for the lifetime of the plan, but I only want it for a few years. To do this, I’ll add a step to step the inflation back down in the future.
Go to the Timing screen, create a new step, let’s call it Step Down Inflation. You can select an icon or leave it as the default. Set this as your step timing and click Done. In this example, at age 46, the inflation rate will step back down to 2.5% year on year.
To confirm, go to Year View > Expenses, select the General Living Expense, and scroll through the years. You’ll see that the 5% inflation applies for a few years, and then the expense steps back down to 2.5%, which will continue for the remainder of the plan.
I hope this was helpful. If you have any questions, you can reach out to support@planwithvoyant.com or click on the client’s name in the top right, select Request Support, enter your question, and share client access. This will send us a link to your plan so we can answer questions specific to that client.