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Confusion re: Living Standard vs. Consumption

Submitted by alan.greenfield... on 22 January 2010 - 5:13pm

While the output of my ESPlanner model shows a smooth Living Standard per Adult, I’m confused about its recommendations for consumption, which don’t appear smooth:

2010 Suggestions are to increase consumption by $18K
2011 Suggestion is to maintain consumption at the suggested 2010 level
2012 Suggestion (when I’ll be 65) is to reduce consumption by $17K
2013 Suggestion (when my wife will be 65) is to reduce consumption by an additional $17K
2014 and beyond: Same as suggested 2013 level --- maintains fixed (“2 can live as cheaply as x”) ratio to Living Standard

What could account for the consumption reduction suggestions for the future, when the current suggestion is to increase consumption? That doesn't appear to be smoothing consumption, unless the program anticipate, for instance, that we won’t need to pay for health insurance when we’re eligible for Medicare, etc.. Is that in fact the case? What else am I missing?

Thanks kindly,
Alan

‹ CONSUMPTION FOR THE CURRENT YEAR Challenge "two adults live as cheaply as 1.6" ›
Submitted by Dan Royer on 22 January 2010 - 7:10pm.
1

I need to think about this, but children in the home cause consumption to rise relative to living standard. Are these years when children may be leaving the nest?

Submitted by alan.greenfield... on 22 January 2010 - 10:40pm.
2

Thanks, Dan, but no, it's just the two of us. (In fairness, there is some [adult] child support, but I put all such expenses in the Special Expeditures category.)

Submitted by Dan Royer on 26 January 2010 - 11:15am.
3

Hi Alan,

Of course it would be much easier for me to answer if I was looking at your database. And you are welcome to create a support ticket and upload your database there for me to download.

Is your standard of living index set at 100% all the way down (in the assumptions area)?

Again, share your database through a support ticket if you want me to look at it.

Dan
ESPlanner

Submitted by alan.greenfield... on 26 January 2010 - 3:47pm.
4

Hi Dan,

I just created the support ticket (700-590) and uploaded the data base.

(It seems to have been assigned to LWilliams.)

Thanks very much,
Alan

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