A projection showing R7,842,119 in twenty years is not more reliable because it uses exact rand. Precision is not certainty.
Every financial projection turns assumptions into numbers, and the polished chart makes those inputs easy to forget. Common ones include contributions, spending, retirement date, inflation, investment returns, fees, tax, income increases and lifespan. Some are facts today, some are professional estimates and some are choices.
A result is only as useful as the assumptions are visible and reasonable. Better analysis shows a range, explains what is in today’s money and identifies the variables that matter most.
Try this now
Take one projection and list every assumption you can find. Label each “confirmed fact”, “estimate” or “choice”. Change one important estimate and note how the result responds.
Ask your advisor
- Which assumptions have the greatest effect?
- Are returns shown before or after fees and tax?
- What less favourable scenario has been tested?
- When will the inputs be updated?
Projections are decision tools, not promises. Their quality depends as much on transparent uncertainty as on calculation.