Your charts are set to Today's dollars
Your home and your jewelry do grow 1% a year in your plan. Today's dollars shows every future amount as what it would buy today. Your plan assumes prices rise faster than 1% a year (3.2% unless you changed it), so each year your home and your jewelry buy a little less, and their bars get shorter.
- 1Look at the chart's title. If it ends with (Today's Dollars), that is the view you are seeing.
- 2Open Display at the top right of the chart and choose Future dollars. Your home and jewelry now grow 1% a year.
Both views show the same plan. Nothing in it changes when you switch; only the way the amounts are counted.
One click to switch, and one to switch back.
The same home, two ways
Here is the Real Estate Equity chart for our example couple, Chris and Jamie. Their home is worth $850,000, has no mortgage and is set to grow 1% a year. Their plan uses 3.2% inflation.
Today's dollarsThe home's bar shrinks
Future dollarsThe same home grows 1% a year
The numbers behind those bars, and the jewelry beside them:
| At age | 58 | 59 | 60 | 61 | 62 | 63 |
|---|---|---|---|---|---|---|
| Home, Future dollarsGrows 1% a year | $854,948 | $863,498 | $872,133 | $880,854 | $889,662 | $898,559 |
| Home, Today's dollarsThe same home, in today's money | $839,382 | $821,489 | $803,976 | $786,837 | $770,064 | $753,648 |
| Jewelry, Future dollarsGrows 1% a year | $25,146 | $25,397 | $25,651 | $25,907 | $26,167 | $26,428 |
| Jewelry, Today's dollarsThe same jewelry, in today's money | $24,688 | $24,161 | $23,646 | $23,142 | $22,649 | $22,166 |
Why it shrinks in today's dollars
Follow the home for one year:
The home gained $8,500, but everything else got 3.2% more expensive. So a year from now, the home will buy what about $831,900 buys today. That is roughly 2% less buying power every year, which is why its bar keeps getting shorter.
Switch the view
Every Dashboard chart has a Display button at its top right. Under Dollars, choose Future dollars or Today's dollars.
The choice applies to every chart and to the numbers panel beside them. On a very wide screen the same choice sits in the chart's top bar instead of behind Display.
Which one should I use?
- Future dollars are the amounts you would see on a statement in that year. Use them to check a balance or a home value against what you expect.
- Today's dollars show buying power. Use them to judge whether your money will pay for the life you have now: $100,000 in 30 years buys far less than $100,000 today.
If you expect them to keep up with inflation
Many people expect a home to rise about as fast as prices in general. If you do, set it that way, and its bar will hold steady in today's dollars instead of shrinking. Open Accounts at the top of the screen and click the edit button beside the asset.
Your home
Set Annual Appreciation % to the rate you expect. To keep pace with your plan's inflation, use the same number as Inflation % (below). The field's hint gives a typical range of 2% to 4% a year.
Your jewelry, and other assets
Other assets have one more choice, Appreciation Type. Choose Inflation and the asset grows at your plan's inflation rate, whatever you set it to, so it holds steady in today's dollars. Custom uses the percentage you type.
Your plan's inflation rate
It is in the Returns and Allocations box in the settings panel, as Inflation %. New plans start at 3.2%. Today's dollars take this much inflation out of every year, so it decides how fast a 1% asset shrinks in that view.
