Not in spending-power terms. The difference between the two rates, after fees and relevant tax, is often more important than the headline return.
Two rates shape most retirement projections: investment return and inflation. Neither is a promise. Return affects how savings may grow. Inflation affects how much future money will buy and how retirement income may need to rise.
Small assumption changes compound over decades, producing very different outcomes. A precise future balance can therefore create more confidence than the evidence deserves. Better projections show the assumptions, use more than one scenario and explain whether figures are in today’s money or future rand.
Try this now
Find the return, fee and inflation rates in your retirement projection. Calculate the approximate difference between net return and inflation, then note whether the result is shown before or after tax.
Ask your advisor
- Why were these assumptions chosen?
- What happens under lower returns or higher inflation?
- Are the projected income figures expressed in today’s buying power?
The purpose of a projection is to support decisions under uncertainty, not to predict the balance on a specific future date.