Edit Planning Assumptions

Choose one return basis for the deterministic projection

Planning Assumptions controls the economic path used by Projection and other deterministic comparisons. Fixed rates apply one expected nominal growth rate and one inflation estimate. Historical data instead uses the supported asset-class and inflation observations from a historical window ending in the selected year.

Neither choice predicts the future. Fixed rates make the assumption easy to see and vary; historical data preserves an observed sequence and its ordering. Use the mode that fits the question, then keep it unchanged when comparing another decision.

Fixed growth and inflation should describe the same nominal world

Expected portfolio growth is one annual nominal return, before subtracting inflation, applied to stock, bond, and cash holdings in a fixed-rate Projection. Holdings with contractual terms or explicit return overrides retain those rules. New plans start at 6%. Inflation is the annual increase applied to expenses and other inflation-linked amounts unless a more specific override exists. A lower growth estimate or higher inflation estimate generally makes the plan more demanding, but the effect depends on taxes, cash flows, and asset timing.

Use assumptions you can explain rather than tuning the rates until a desired result appears. If the decision depends on a narrow range, compare clearly labeled What-ifs instead of replacing the main plan repeatedly.

Historical mode pins a reproducible ending year

The Shared historical end year selects the last observation used by the supported historical series. The chosen year remains pinned when newer reference years become available, which prevents a saved comparison from changing merely because the reference library was updated.

The choices come from the available reference observations shared by stocks, bonds, cash, and inflation. Only ending years with enough observations for the entire plan are offered. A longer planning horizon can therefore reduce the available choices.

Historical mode drives growth and inflation from the historical data, so the fixed Expected portfolio growth and Inflation estimate are not active. Moving the end year changes the sequence being tested and should be treated as a different assumption, not as a routine data refresh.

Test Market Uncertainty has its own return and inflation settings

The deterministic Expected portfolio growth field is not the stock mean for Test Market Uncertainty. Test Market Uncertainty starts with separate 7% stock, 4% bond, and 3% cash means and separately stores volatilities, correlations, inflation, and other settings. A zero-volatility stochastic run can still differ from Projection when those asset-class means differ.

After saving, rerun Projection and check that the selected mode is named with the result. Review any out-of-date analysis notices and rerun results you intend to rely on. Existing results do not incorporate newly saved plan facts, even when you keep their market parameters unchanged.

Choose a general inflation estimate and review special costs

In a fixed-rate Projection, Inflation estimate supplies the general increase in inflation-linked costs. Use a documented planning assumption and compare a higher and lower value in separate What-ifs when the choice could change your decision. A precise-looking estimate is not a prediction.

Some costs have their own growth choices. Medical offers Annual healthcare growth override; College Savings Goals separates tuition inflation and Other-cost inflation. Review those settings before assuming that one general inflation change affects every cost equally. Historical Projection uses its selected historical inflation sequence instead of the fixed estimate.

An amount in future dollars includes the modeled price changes by that year. Today’s dollars removes general inflation to compare purchasing power. Enter an expense on the dollar basis requested by its field; increasing the starting amount for inflation and then applying the same increase again overstates the cost.