Nancy walks through the Boldin Planner's assumption settings that drive your projections. You can adjust default rates for inflation, Social Security cost-of-living increases, housing appreciation, and future tax rates, with some assumptions changing based on your forecast scenario.
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Hi everyone, this is Nancy from Bolden and I want to welcome you to Day four of our Get Started series designed to guide you in accurately setting up your plan. In today's video I'll discuss Bolden's assumptions. Assumptions form the foundation upon which your projections are built and in order to give you the most accurate projections possible, the Planner allows Planner plus members to control a number of important assumptions. Let's navigate to the Rate Assumptions section to look at the essential assumptions housed there. When you first sign up with Bolden, the default rates are populated. These are based on long term historical data and align with our optimistic pessimistic model designed to support you in preparing for the multiple risks associated with financial planning. We are viewing the Bolden default assumptions in this demo plan and choosing appropriate rates is an essential piece of ensuring that your plan has a solid foundation. General inflation will be applied to the expenses in your plan and is also used for increases in important figures such as the tax brackets, IRMAA thresholds and standard deduction. Medical inflation, which tends to be higher than general inflation, will be applied to the medical, Medicare and long term care expenses in your plan. The Social Security cost of living adjustment impacts your Social Security projection and as per current legislation, the Social Security COLA is tied to an inflationary index. As a result, when general inflation rises, the Social Security COLA also rises, though not by the same rate. As with many financial planning considerations, we don't know whether this will always be the case and this is not the default in the software because the defaults align with our optimistic pessimistic model. For example, should there be a reduction in Social Security benefits or the link between general inflation and the Social Security cola, End Social Security benefits may be lower than currently expected. The housing appreciation rate will be applied to all real property in your plan. Another important assumption are future tax rates. Our default assumes that the current tax rates apply through longevity age and you can use the tax toggle to view your plan under the assumption that the higher pre tax cuts and Jobs act tax rates apply after 2025. Additional assumptions that are impacted when you select the optimistic average or pessimistic forecast are the rates of return on your accounts and assets, growth on income, and colas on pensions and annuities, which we'll be discussing in other sections of this series. Thank you for joining me in today's video. I'll see you in Get Started Series five where I'll discuss the Profile and Goals section of the Planner.
