Income projections typically consider various sources of income, such as salary and wages, rental income, dividends from investments, interest income from savings or bonds, business income, pension, social security benefits, and any other expected inflows.
Income projections are usually made over a specific time period, commonly spanning several years or even decades, depending on the individual’s financial goals and the purpose of the financial plan.
Creating income projections involves making assumptions about future events that may affect income. These assumptions can include factors such as salary increases, inflation rates, interest rates, economic conditions, and changes in employment status.
Income projections may account for taxes, as tax rates can significantly impact the net income available for saving or spending.
Income projections are especially crucial when planning for long-term financial goals, such as retirement planning or funding education expenses. They help in determining how much money needs to be saved and invested, and how much risk is appropriate to to achieve these goals.
Based on the income projections, the adivsors at Virtue Asset Management can recommend appropriate investment strategies to align with the individual’s risk tolerance and financial objectives.