I am confused. If I enter my assets as of right now (say, October 31, 2009), and enter my savings rates for the current calender year, the output reports appear to show my account balances as they would be at the end of 12 months from now.
What I would like to do is to enter my assets as they will be at 12/31/09, and my anticipated savings rates beginning with 2010. Is there a way to do that?
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I don't think current Esplanner version allows for that. I would just roll-over my saving rates with guesstimates up to 31 Dec 09. Or to be conservative, assume that your current savings are flat through to 31 Dec 09.
Right. ESPlanner reports end of period things in real terms, so savings are assumed to be beginning of period (since the future IS unknowable, except in this case where it's really December and we're at the end of the period). Now its easy enough to figure this out (although hard to explain).
Beginning of period assets (nominal) = $1M. Interest rate = 6%. Inflation = 3%.
End of period assets (nominal) = BOPA * IR = $1M * 1.06 = $1.06M
End of period assets (real) = EOPAN / I = $1.06M / 1.03 = $1,029,106
So knowing this, you can adjust your initial assets by some factor and you should come out with the same number that you have at this time.
So a little algebra to find the factor:
$1M = x * ( 1.06 / 1.03 )
$1M * ( 1.03 / 1.06 ) = x
x = $971,698
and if you plug this into the value for beginning of period assets (nominal) above, you get EOPAR = $1M.
Change values for inflation and interest rate as appropriate.
Be aware that by doing this you're, effectively, changing the timing of the interest accumulation for regular assets, so while this hack may be useful to figure out December assets in December, it may not be advisable to do earlier in the year.
Best,
Dick Munroe