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You just left a meeting with your financial adviser, and your nest egg is looking bulletproof, with a projected worth of well over $1 million at age 95. But wait a second, are you sure about that?
If your financial projections look too good to be true, they might well be, for a variety of reasons.
When the pandemic hit home in March 2020, the stock market crumbled and many people saw their investment portfolios drop. Fortunately, the markets eventually recovered; but the sudden drop caused many people to review their investments and projections.
While reviewing a new client’s portfolio at that time, we learned that his previous adviser projected his net worth as double our estimate by age 70. Naturally, the client was confused by the different scenarios. We discovered that the underlying growth assumptions the former adviser used were far too optimistic, giving the client an unrealistic view of his financial future.