Where does the Consumption "Current Amount" on the Main Report come from?
My consumption "Current Amount" on the "Current Recommendation" sheet is around $14,000. The ESPlanner pdf help says that consumption is "all expenditures by the household other than special expenditures, housing expenditures, taxes, and insurance premiums" but when I do the math, that's not what I get. I'm assuming that "Total Spending" equals "all expenditures."
I have double checked all the input values and they look correct. However, I'm sure that currently I'm not living off of $14,000 outside of housing, special, taxes and insurance.
Can someone explain or poke holes in my assumptions?
Thanks,
Al
RSS
Should be that if you sum the total spending columns save for the last column. Alternatively if you subtract special to Medicare Part from total spending you get Consumption. If what you're saying is that if you perform these calculations, you don't get either total spending or Consumption then we have to take a look at your database.
The current recommendations is only for the current year.
Best,
Dick Munroe
Okay, I'll open the kimono a little. If I need to send the entire database, please let me know how. Below is the 2009 row from the Total Spending sheet:
consumption 103,789
special 27,000
net contributions to reserve 0
housing expenditures 23,968
husband account contributions 23,000
spouse account contributions 3,000
all other columns are zero
total spending 180,757
The 2009 Recommendations sheet says:
consumption recommended amount 103,789
current consumption amount 14,828
recommended change 88,961
Total taxes from the Tax sheet is 41,984
So total expenditures (special + taxes + housing + insurance) = 92,952
My confusion is over the current consumption amount: 14,828. There are two questions:
1. Is it calculated from the above numbers? If so, how?
2. I'm trying to get a grip on the model so I can proceed to monte carlo, etc. and I can't understand how my wife and I are living on 14,828 per year--outside of special, taxes, housing and insurance.
Thanks for any help you can provide,
Al
Al:
What I believe you are probably seeing is the impact of some savings in the current year. Look in the Assets and Savings area and see if, for example, you have Net Contributions to Saving, Money Market, etc.
If so, it could be that the 88,961 is somewhere in that panel.
The entire panel of "current recommendations" is trying to reconcile and correct whatever you are over- or under-consuming in the current year. I believe it's always a result of those numbers you enter in Assets and Saving for the current year.
Does that help track it down?
Dan
Dan,
Thanks for staying with me. There is nothing on the Assets and Savings form except the calculated amount for Real Asset Income. It is 96,216 which is a figure I'd like to dream of. How is that calculated? Trying to work that number into my understanding of the way things work, doesn't compute. So I guess I'm still missing a few things.
Coming at this from another direction I looked on page 15 of the pdf help file The definition of "actual consumption in the current year" which I'm guessing is the recommended consumption "current amount" (there is an inconsistency in terminology in the system and documentation that I find unhelpful) is "Actual consumption in the current year is calculated by subtracting from current-year total income the sum for the current year of actual saving, taxes, special expenditures, recommended life insurance premiums, housing expenditures, and retirement account contributions." If I take my current year total income and subtract the sums mentioned, I get a negative number.
Thanks so much for your help. What would you recommend that I do next?
Al
OK--> look at page 28 in the PDF help file. That explains the numbers in that Current Recommendations grid.
The grid appears to be a simple accounting. But let me look at your numbers again. You haven't mentioned the saving column. There must be a negative saving recommendation, right?
So you are not living on 14K consumption. You mention that the asset income is 96,216? So you'd have to have the saving amount to generate that asset income (interest income on your savings).
You should be seeing a negative number in the saving column in annual recommendations and a negative number in the first column of the Saving row in the Current Recommendations.
I can go over all of this with you on the phone if you like and we can use a GoToMeeting to view your computer screen. Let me know if you want to do that. It might easiest to just talk it through so you can get the main concepts as you say.
Dan