Current v. Future Dollars
Current and Future dollars on the system correspond to the current value of a dollar as opposed to the future value of a dollar (adjusted for inflation).
Current Dollars = the value today. Future Dollars = the value in the future (ex. $10,000.00 in 2019 may not be $10,000.00 today. Setting future dollars avoids having to make the inflation calculation.)
Since the goal of the system is to plan financially for the future, there needs to be a way to provide the assumption that the value of the dollar will change. In order to understand how this affects a plan, the system allows you to think in terms of current or future dollars.
The value of the future dollar is determined by setting up the inflation rate. To adjust the inflation rate, navigate to the General Information section of Client Data.
Current / Future Dollars in “Other Expense” and/or “Other Income”:
When entering in an Other Expense/Other Income, under the Account Details section, you can choose the yearly amount to be in Today’s Dollars (Current) or Future Dollars. Please see the article referring to entering in “Other Expenses/Other Income”.
The same setting can be seen when entering in “Other Income”.
To illustrate the difference of entering in Current and Future dollars, please refer to the following example:
The client would like to illustrate in their plan an annual expense of $1,500.00 to be used for a Camping Trip and to be categorized as a “Generic Expense”. This expense is planned to occur from January of when the owner of the plan retires to December of the Owner Death.
With the selection of Today’s Dollars, and the expense to occur when the owner retires (year of 2022) the actual cost of the expense will be calculated as $1,824.00 in the year that the expense will start.
If we switch it to Future dollars, we then can see that the expense cost in Today’s dollars are reduced to $1,232.00 and the future expense will be $1,500.00.
*These numbers are calculated based on the inflation rate set up on the General information tab of the Client Data section.