None of these moves are dramatic on their own, but they add up. For advisors building retirement projections or running Monte Carlo simulations, even small shifts in assumed returns can ripple through a 20- or 30-year plan in ways that matter to clients counting on those numbers.
The bigger story, though, may be what is new rather than what changed. For the first time, the guidelines include a shelter projection assumption, covering both primary residence appreciation and primary residence rents. The rate is set at 1% above inflation — or 3.1% nominal — drawing on data from the Canada Mortgage and Housing Corporation and global research.
Nick Hearne, chair of the Projection Assumption Guidelines Committee, said the addition reflects how central housing costs are to any household’s financial picture. “Establishing long-term housing assumptions within a principled framework supports more consistent and defensible financial projections,” Hearne said in a release.
The guidelines stop short of covering commercial real estate or investment properties, but for planners advising clients on the financial implications of owning or renting a home over the long haul, there is now an official number to anchor that conversation.
Elsewhere in the update, mortality and probability of survival tables were expanded to include assumptions for same-sex couples alongside individuals and heterosexual couples — a change aimed at making joint-life longevity estimates more accurate and inclusive.