When we think of financial planning, we naturally focus on the future. We start by getting really clear about where we are today, then we spend time thinking about where we want to be 10, 20 or even 30 years from now. Part of the process includes deciding how much we’ll want to spend, when we’ll want to spend it and how much we can save. Someone has to decide when the plan will end, too, and estimate a year of death, perhaps for two people.
So any plan will involve projections. Before we can draft them, we need to make a bunch of assumptions, or guesses, about what will happen to things like interest rates, inflation and the stock market.
Read the rest of the article at the New York Times.