The calculator gives you the opportunity to indicate whether the initial monthly pension amount you recieve in the future when you retire will increase as a result of inflation. You can also indicate if pension payments you will receive during retirement will grow with inflation. If your defined benefit does not increase when the CPI does or is not in some other way indexed for inflation, you will find that it will become less helpful in paying your li ving expenses as time passes. Rate of Return Use these fields to enter the return you anticipate earning on average each year before taxes. The input cells for tax-deferred retirement accounts give you the option of changing your rate of return once you have retired.
Retired investors are usually more conservative.
They select more stable investments which offer a lower rate of return because they do not have the time to recoup losses. Because interest is typically the largest source of income within your retirement plan, your rate of return is critical. Overestimating your return will have a substantial effect on the outcome of the calculations. You may indicate on the bottom of the input screen which of your investments are adjusted for inflation. If you indicate that a particular account is indexed for inflation, your rate of return will be adjusted accordingly both before and after retirement.