How do I make an expense or income increase with inflation?

Edit the income, expense or fixed-amount saving entry. For entries that start in the future, you can specify if the amount is in today’s dollars (and then it will be indexed with inflation to the start date), or in future dollars (and then that amount will apply at the start date).

To control its growth after it starts, find Index to inflation once started, Inflation adjustment multiplier and Additional yearly adjustment.

With indexing checked, the annual growth assumption is inflation × multiplier + additional adjustment. At 2% inflation, a multiplier of 1 and additional adjustment of 0 give 2% growth. A multiplier of 0.5 gives 1%; an additional 1% with the full multiplier gives 3%.

With indexing unchecked, only the additional adjustment applies. For a level payment, uncheck indexing and enter zero additional adjustment. A negative additional adjustment can model a gradual decline.

These fields approximate a growth rule; they do not implement every pension contract’s conditional formula. For a step change at a particular age, use separate entries covering the appropriate periods rather than expecting an annual percentage to create that step.

The same indexing controls also apply to CCPC REVENUES where shown. The inflation input is the rate applicable in each projected year: it can come from RATES/YIELDS and CURRENCIES or from the market model used for the run. A positive additional adjustment can represent salary growth above inflation; a negative one can represent gradually declining spending.