Thursday, June 8, 2017

We Have a New and Improved Actuarial Budget Calculator (ABC) for Retirees

In our continuing effort to make it easier for you to apply the Basic Actuarial Equation discussed in this website to help you develop your Actuarial Spending Budget or Actuarial Budget Benchmark, we (mostly Bobbie) have prepared a new Excel workbook for retirees.  We call this new version the Actuarial Budget Calculator for Retirees V 2.0, and it is now available in our “Spreadsheets” section.  We will maintain the old V 1.0 for a temporary period while you get used to the new version.

What’s New with 2.0?

In general, the new version has a much cleaner look than the old version and provides more guidance on how to use the spreadsheets.  Negative numbers are shown in red.  We discuss the primary changes below by workbook tab.

The Overview Tab

We have moved this tab to be the first tab to encourage you to read it first before jumping into the numbers.

The Input & Results Tab

This is where we have made most of the changes, including:
  • Improving organization of this spreadsheet, including placing inputs on the left-hand side and results on the right-hand side 
  • Providing a warning of potential future cash flow problems, if applicable 
  • Providing a default Lifetime Planning Period (LPP) based on input age and sex.  This default can be changed by the user 
  • Allowing the user to enter either monthly or annual amounts 
  • Providing guidance on input items through hovering the cursor over the red triangle
PV Calcs Tab

We show you all the detail in the calculations used in the workbook.  We try to be as transparent as possible in this regard as we aren’t trying hide anything.

Runout (in nominal or today’s dollars) Tab

We have reorganized this tab to make it easier to follow

Inflation-Adjusted (or real dollar) Runout Tab

We have reorganized this tab similarly to the nominal dollar runout tab

The Budget by Expense and 5-Year Projection tabs have been better organized and negative numbers are shown in red.

We encourage you to kick the tires on our new workbook.  As always, we welcome your feedback on our workbooks or our website and would be happy to have your suggestions for future improvements.