Financial Planning Projection Assumption Guidelines

An important facet of the financial planner’s work is to make a variety of projections: retirement income needs, insurance needs, children’s education funding needs, etc.

To make these projections, financial planners must estimate future inflation and borrowing rates, investment returns, how long the need will exist… In short, they must make assumptions. This is why the Institute of Financial Planning (the Institute), formerly the Institut québécois de planification financière (IQPF), and FP Canada Standards Council™ jointly publish the Projection Assumption Guidelines: to help financial planners make realistic financial projections. Judicious use of these assumptions should protect both the client and the financial planner.

The Projection Assumption Guidelines (referenced as the “Guidelines” or the “PAG”) were first released in 2009. When looking at the actual rates from January 2009 to January 2024, the PAG rates are within the same range, which speaks to the reliability and validity of the PAG projections. A chart is included in the Addendum to show the PAG Results from 2009 and how they have tracked over the years.