FAQ: How to Model Alternate Scenarios with Different Pension Start Dates

Incorporating different pension amounts into specific retirement scenarios is currently a manual effort, but here's how you can effectively manage it:

Steps to Adjust Pension Amounts by Scenario

1. Copy the Scenario:
   • Navigate to your current projection and create a duplicate scenario for testing.
2. Adjust Retirement Details:
   • Update retirement age or pension start dates as needed for the new scenario.
   • Make sure to incorporate potential changes to pension values due to earlier or later retirement.
3. Calculate Future Pension Value (see video for visual):
   • Use the information provided by the pension plan to estimate the future value:
     • Start with the base pension amount (e.g., $15,690).
     • Inflate this value by applying the expected inflation rate for the appropriate number of years.
     • Account for any early retirement reductions or other adjustments (e.g., bridge benefit reductions).
4. Enter Pension Data:
   • Input the adjusted pension amount in the Pension column within the scenario's advanced options.
   • Ensure the entry remains in the Pension column so it is eligible for income splitting.
5. Apply Inflation or Growth Rates:
   • Set the annual growth rate for the pension
6. Recalculate at Age 65:
   • If there is a bridge benefit or other age-specific change, adjust the pension accordingly for age 65 and beyond.
7. Run the Calculation:
   • Recalculate the scenario to incorporate the adjusted pension values.
   • Compare the new outcomes against the baseline to assess the impact of the change.