The projection engine runs entirely in real dollars: every balance, income stream, and spending number you see is expressed in today's purchasing power, no matter how far out the year.
What that means in practice
- A projected balance of
$900,000at age 80 buys what $900,000 buys today. The engine has already taken inflation out. - Return assumptions are nominal (before inflation): the engine grows balances at the returns you enter, then deflates the results by your Inflation %. Don't subtract inflation from a return before typing it in. The engine already does, and doing it twice would double-count.
- Social Security and federal tax brackets are treated as inflation-indexed, which makes them constant in real terms. That is why there is no separate COLA input: adding one on top of a real-dollar engine would count inflation twice.
Why it works this way
Comparing dollars across a 30-year plan is only meaningful if they are the same dollars. Real-dollar math keeps "can I spend $60k a year?" answerable with one number for the whole retirement, instead of a spending figure that silently grows every year while meaning the same thing.
If a future balance looks smaller than you expected, check whether you were picturing nominal dollars. In nominal terms the account balance would be higher, but so would the price of everything it has to pay for.