Consult only the most current information, as politicians love playing with the tax code, and major changes from year to year are not out of the question.
When doing any kind of financial planning involving the future, key assumptions that estimate critical variables need to be made. An overlooked assumption is for inflation which is how much prices are going to rise.
Key assumptions about the future can make all the difference as to whether your clients meet their financial goals as planned, or fall short and run out of money. Retirement just isn't an abstraction anymore, it's time for Joe and Mary to make a real plan that will allow them to enjoy the kind of retirement they have been dreaming of. The first thing you will have to do with them is make some assumptions.
'' This is a common conversation for those over 50.
Whether you are planning for a retirement or reaching some specific goal, like money for a child's education, conservative estimates will increase the likelihood that you don't come up short.
Let's go through some key assumptions one at a time. Joe and Mary come to you for retirement planning, they are certain they will need ,000 a month to get by, but they don't plan to retire for another 10 years or so.
Use the 85 as a start point and add or subtract years based on the medical history of your clients.
Remember that running out of money is the worst possible outcome, so you will want to be conservative here.
The Social Security Administration has projections for this.
A rule of thumb is that a 65-year-old can expect to live another 20 years. Rates of returns on financial investments need to be made.