Assumptions

Setting assumptions

The final step of the Full SOA inputs is to determine what assumptions need to be inserted into the model. Key assumptions include items such as:

• Life expectancy buffers – How long do you want the model to run for?
• Inflation – This will gross up expected expenses and impact the value of net equity in today’s dollars.
• *Growth rates – Set growth rates to be based on risk profile assumptions and/or investment portfolio assumptions. Advisers can adjust the invididual growth rate per investment. Additionally, that growth rate can change in the future.
• Interest rate adjustments – Model future changes to interest rates.

*If portfolio recommendations are provided, the default setting will be to consider the underlying portfolio assumptions. This ensures fees etc are considered.