This version of the EDHEC-Princeton Retirement Goal Price Indices represents the minimum capital needed to secure a replacement income normalised to $1 per year in retirement, plus possibly an adjustment for the cost of living. The income cash flows start in January 2033 and last 20 years. In other words, the index is the price of a bond that pays an annual coupon of $1, plus possibly an adjustment for the cost of living during the decumulation period.
The index moves every month as the retirement date approaches and as interest rates fluctuate. As a general rule, lower rates imply greater index values, meaning that replacement income is more expensive, while higher rates result in lower index values.
The index value can be used to measure the purchasing power of retirement savings in terms of replacement income: the replacement income that can be financed with a given amount of savings is obtained by dividing the capital by the index value.
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Historical values
This figure displays the values of two Goal Price Indices since January 2018. The index with no adjustment is the present value of a replacement income equal to $1 per year. The index with a cost-of-living adjustment is the present value of a replacement income equal to $1 per year and growing at 2% per year.
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Data download
Monthly values
Document download
Index construction rules
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