The Personalized Retirement Spending Index
A purpose-built inflation measure for retirees. Fixed-basket. No substitution. No hedonic adjustment. Three lifecycle phases. Personalized to your geography, housing, and Medicare situation.
The full white paper
A complete methodology specification with theoretical foundation, formal equations, data sources, validation framework, and honest limitations. Roughly 8,500 words.
Read the white paper →Validation framework
A separate working paper specifying the empirical validation: cohort construction from Consumer Expenditure Survey and Health and Retirement Study microdata, Diebold-Mariano hypothesis testing, sensitivity analysis. Status: framework specified, implementation in progress, results to be published with peer review.
Read the validation paper →Why this matters
The Consumer Price Index — the inflation number that anchors virtually every retirement projection in the United States — was designed to measure macroeconomic price changes for urban workers. It uses substitution adjustment, hedonic quality adjustment, and Owner Equivalent Rent for housing. Each of these methodological choices was defensible for its purpose. None of them is appropriate for retirement planning.
The PRSI replaces that flat CPI assumption with a fixed-basket measure tailored to what retirees actually buy, modeled across three distinct lifecycle phases and personalized to the household. Most of the gap versus CPI-U is concentrated in healthcare and long-term care.
How the index is built
The PRSI has two layers — a measured base and a personalization layer on top.
The measured base. Category inflation comes from the FixedBasket index — an independent, open-methodology fixed-basket index that measures the price growth of a constant bundle of real goods directly from primary sources (observed retail prices, energy, employer health premiums, market rents, tuition, and more), with no CPI input, no substitution, and no hedonic adjustment. FixedBasket is a sister project that PlanRetirement also operates; its full methodology is published openly and is reproducible from frozen inputs.
The personalization layer. On top of that measured base, PlanRetirement applies its three-phase lifecycle re-weighting (Active 65–75, Slower 75–85, Care 85+) and personalizes to your state, housing situation, and Medicare posture. Long-term care — which the fixed-basket index does not cover — is modeled as a PlanRetirement overlay using Genworth Cost of Care data.
In short: FixedBasket measures the rates; PlanRetirement applies them to your life. The base index is open and auditable; the personalization is ours.
About the CPI comparison line
Wherever we show a “vs CPI” figure — on the charts, on your dashboard, in the inflation X-ray — that number is a 2.5% long-run assumption, consistent with the Social Security Trustees' intermediate inflation projection. It is not a live monthly reading of the BLS CPI-U series.
We do this deliberately. A trailing-window average of a monthly series swings with whichever month you happen to open the page, which makes a 30-year comparison look precise when it isn't. A stable long-run figure is the honest way to compare two long-run assumptions against each other. It also cuts against us: a higher CPI assumption would make our own personalized rate look more favorable by comparison, not less.
If you want to compare against a different CPI figure, the underlying rates are published — and you can switch your own plan between our personalized rates and a flat standard-CPI assumption in Quick adjust on the dashboard.