Here is a time graph of a typical financial plan. Most on-line
planning software and many financial planners apply averages
and assumptions to every year of the client's planning horizon.
You typically get a nice, smooth, generally optimistic result.
Here is what might happen in the real world. This plan uses the same basic assumptions as the plan at the left, except the stock market returns reflect the actual performance of the stock market from 2001 to 2013. Instead of the client having a nice estate at age 100, the client is broke by age 90, and worrying every year in between.
This plan used the same basic assumptions as the plans above, reflecting the actual stock market performance from 2001 to 2013. Diversification and asset protection have protected the asset base, and still left a sizable estate at the clients age 100.
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