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"Current Amount" for Consumption

I started playing with ESPlanner+ this weekend, as a new user. I've been trying to tease out the numbers that compose the "Current Amount" Consumption on the profile main report. There's something very perplexing.

Running the Economics-based reports, with and without Monte Carlo simulations, there's a significant difference in the "Current Amount" consumption for each case. The Monte Carlo run comes up with a number that 25% less than the normal run, for the same input data. Why would that be?

The normal run is closer to my math, but still off (13% low), when I calculate my implied expenditures [salaries + asset income (as determined by ESPlanner)] - [taxes + housing expenditures + retirement contributions + annual net savings]


It's probably related to differing saving recommendations. If you look instead at the annual consumption (discretionary spending) on the Annual report for the entire life-set of years, you'll see a different number based on the different expected returns. The Current Amount you see is only for the current year. I think it's easier to see when you look at the full set of years in the annual report. But if you have to save more, your consumption remaining will be less.


I'm confused by your response. My understanding of "current consumption" is from p. 37 of the ESPlanner's manual, which states...

"Current consumption is calculated as the household’s current total income minus the sum of its
current saving, its current special expenditures, its current taxes, its current life insurance premiums
(assuming your household purchases the amounts of life insurance recommended), and its current
housing expenditures."

It's my baseline input to the program, independent of ESPlanner recommendations, or future changes to consumption and savings. Why would it be reduced, based upon my selection of Monte Carlo simulations?


Topamo, one possibility for the observed difference is the rate-of-return assumed for your portfolio. When running a Monte Carlo simulation, that rate is a function of the asset allocation (in the “Planning Method | Monte Carlo | Build Portfolios” window); otherwise, that rate is a fixed constant (in the “Economic Assumptions | Nominal Rates of Return” window).