Basic Assumptions (asset growth, timing of contributions / withdrawals)

It is important that you are aware of the assumptions Snap Projections uses in its internal calculation engine. This will help you gain a better understanding of how to use the software and assess the impact of these assumptions on long-term projections for your clients.  Snap works in full-year increments, and your initial inputs are considered to be January 1 values for the starting year of the projections as detailed below.
  1. Values that you enter for Capital Asset amounts (e.g. RRSP, TFSA, Non-Registered, etc.), Real Asset values, and Debt balances are considered start-of-year values for the first year of projections. 
  2. Capital Asset balances (e.g. RRSP, TFSA, Non-Registered, etc.) that appear on the Planning page under the Value column show the year-end value (i.e. as of December 31 at 11:59 pm).
  3. Withdrawals are made at the beginning of the year (this is the most conservative scenario since it is typically difficult to determine when they will occur).
  4. Contributions are made at the end of the year (since it is typically difficult to determine when they will occur).
  5. Capital Asset growth is calculated annually. Asset amounts and debt balances entered on the Assets and Debts pages are considered to be beginning-of-the-year values for the start year of projections.
    • Note: For scenarios created later in the year you may not wish the Capital Assets to accumulate an entire year's worth of growth in a few months.  In this case, you can start the projections in January of the next year so that the Capital Assets values you enter will be the start value for January 1 of the next year. Here are steps to change the start year of projections.
  6. Real Asset growth is calculated annually (but is pro-rated daily if an asset is bought/sold throughout the year).
  7. The interest rate on all debts is nominal and compounded monthly.

Further detail on the timing of transactions in non-registered accounts:

  1. The year begins with the start-of-year value of the non-registered account, as entered on the Assets page.
  2. Rebalancing occurs.  This is either a net buy or sell transaction, depending on whether there are dividends being paid that can be used for rebalancing.
  3. Yearly growth is calculated based on the rate of return for this account.
  4. Annual turnover is calculated - sell transactions occur. 
  5. Annual turnover is calculated - buy transactions occur.
  6. Contributions are added to the account.
  7. The non-registered account Value column now displays the final year-end value of the non-registered account.

Note that Turnover is adjusted under Portfolio Settings. By default, turnover is set to 5%.

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