Cohousing-L Mailing List: Re: Reserves funding levels/percentages?

[Kelly Bachman (happyvalleykelly]

Brian, The “percent funded” example was overly simplified to demonstrate
the concept. The 30-year calculation normally includes factors for
investment income and inflation.  And it is normally updated periodically
to account for changing costs. And if you know you’re going to replace a
furnace with a heat pump, you can include that difference in the
calculation.

Although there are many unknowns, one thing is for sure. Our common assets
are wearing out in a more or less predictable manner. The “percent funded”
helps to plan for that eventuality as best we can.

Kelly

On Sat, May 10, 2025 at 10:55 AM Brian Bartholomew via Cohousing-L <
cohousing-l [at] cohousing.org> wrote:

>  > For example, if a furnace costs $10,000 and is expected to last 10
> > years, the fully funded community will be setting aside $1,000 a
> > year so that when the furnace is ready to be replaced, they have the
> > funds available to do so.
>
> Let's use a real world example. If a furnace costs $10,000 today and
> is expected to last 10 years, but the purchasing power of money is
> being inflated away by deficit spending and stimulus payments at
> 10%/year, and there will be a 25% tariff because the government
> doesn't like where it's manufactured, and a 10% tax because the
> government doesn't like fossil fuels, then the price of the furnace in
> 10 years will be $35,664, and the fully funded community will be
> setting aside $3,567 a year so that when the furnace is ready to be
> replaced, they have the funds available to do so.
>
> Brian
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