<topic sku="dlxbiz" tNum="288001" author="leighanw" xmlns="x-schema:hhTopicSchema.xml"><index><title>Learn about the Taxes & Inflation page in the Lifetime Planner</title><category>lifeplan</category><klink type="cncpt">Tell me about the Taxes & Inflation page in the Lifetime Planner</klink></index>
<content>
<p>On the <emph>Taxes & Inflation</emph> page of the Lifetime Planner, you can establish:</p>
<ul>
<li><emph>Your effective income tax rate.</emph> When you specify the state in which you live, Money automatically calculates your effective income tax rate. You can, however, enter a different rate. Money calculates your effective income tax rate based on demographic averages for your state. For each year in your lifetime plan, Money applies the correct effective income tax rate based on the income you'll have that year.</li>
<li><emph>The inflation rate Money uses.</emph> The value of your house, your assets, and the investments in your lifetime plan will grow relative to the rate of inflation. Historically, the rate of inflation has averaged 3% per year. Money uses this rate when forecasting, but you can enter another rate. Money automatically applies this rate to any specified expenses that will change relative to the rate of inflation.</li>
