Retirement Expense Snap Shot
Retirement Age:

CMC22818CR 07/19

My Retirement By The Numbers at Age {age}

Projected monthly expenses broken down by spending category

Total monthly expenses across all spending categories

My Retirement Journey Through Age {age}

Monthly expenses inflated through end of plan age

Impact of compounded inflation throughout retirement

Did you know?1

Retirement expense projections are for illustrative purposes only and results may vary with each use and over time. Retirement expense projections generated by this tool are calculated by Jackson using 2016-2017 Bureau of Labor Statistics (BLS) Consumer Expenditure Survey Micro Data5 and various measurements from the Bureau of Economic Analysis including the Regional Price Parity price index2  (RPP), the Consumer Price Index for the elderly3 (CPI-E), and the Personal Consumption Expenditures price index4 (PCEPI).

How Did We Calculate these Numbers?
1 National Dollar Conversion

The calculation begins by converting current household income before taxes into national dollar values by using the selected current state's RPP2.

2 Custom Client Expense Linear Regression Model

Next the income expressed in national dollar terms is leveraged by a proprietary analytical model based-upon BLS Consumer Expenditure Survey5 data to find category expense values.

3 Elderly Expense Adjustment

Next the category expense values are updated to reflect elderly spending trends by multiplying each category's expense value by its corresponding CPI-E3 value.

4 Retirement State Spending Trends

Lastly each expense value is converted into the selected retirement state's dollars using a PCEPI4 ratio.

5 Weighted Inflation Factor

To calculate retirement expenses in future dollars, a weighted inflation factor is applied to each expense category, which is then compounded annually until retirement age.

Definitions

Regional Price Parity Index (RPP)2

The RPP determines the inputted state’s purchasing power by weighing its average price level of goods and services against other states' averages.

Consumer Price Index for the Elderly (CPI-E)3

The CPI-E takes into account spending behaviors in households with a member age 62 or above. It represents an average value over a 31-year period from 1983 to 2011. 2011 was the last year data was collected.

Personal Consumption Expenditures price index (PCEPI)4

The PCE index tracks changes in price levels and consumer behaviors at the state and national level and is calculated annually.

Weighted Inflation Factor

The weighted inflation factor is calculated first by adjusting each subcategory inflation value based on the weight of the estimated subcategory expense value to the total category estimated expense value. The weighted inflation values are then averaged together to make a category weighted inflation factor. The subcategory inflation values are calculated by taking a rolling 17-year average of the percentage change in prices as published by the Bureau of Labor Statistics Consumer Price Index for All Urban Consumers report5.

For cases where the average inflation rate over the 17-year rolling period results in a value significantly higher than other categories, the period is extended to a 50-year rolling period. In other cases where a negative inflation rate is returned, a general inflation rate of 2.18% is used. The general inflation rate is calculated by averaging yearly inflation rates, as published by BLS5 over a rolling 19-year period.

  1. "U.S. States Fast Facts and Trivia." U.S. States Fast Facts and Trivia, Digital Properties, LLC, 20 July 1996, www.50states.com/facts/; Maura. “16 Facts About Washington DC You Never Knew Were True.” OnlyInYourState, 2016, www.onlyinyourstate.com/dc/fun-facts-washington-dc/. 
  2. "Regional Price Parities by State and Metro Area." U.S. Bureau of Economic Analysis (BEA), U.S. Bureau of Economic Analysis (BEA), 16 May 2019, www.bea.gov/data/prices-inflation/regional-price-parities-state-and-metro-area.
  3. "Consumer Price Index for the Elderly." U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 2 Mar. 2012, www.bls.gov/opub/ted/2012/ted_20120302.htm.
  4. "Personal Consumption Expenditures Price Index." U.S. Bureau of Economic Analysis (BEA), 31 May 2019, www.bea.gov/data/personal-consumption-expenditures-price-index.
  5. "Archived Consumer Price Index Detailed Reports." U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 31 Oct. 2018, www.bls.gov/cpi/tables/detailed-reports/home.htm.