FAQ: Why Did My Success Rate Go Down When I Increased Expected Stock Returns?

What the Success Rate analysis actually does

The Success Rate analysis uses historical data on stock returns, bond returns, and inflation rates — not the rate of return assumptions you enter in the Advanced Options section of the main projection. It runs thousands of scenarios using different sequences of real historical conditions to test how often your plan succeeds (i.e. you don’t run out of money).

What it captures:

  • Investment risk (market volatility and returns)
  • Inflation risk (periods of high inflation)
  • Longevity risk (living longer than expected)

Why your asset allocation matters

Your specific asset mix — how much you hold in equities, bonds, and other asset classes — is used year-by-year in the analysis. Different allocations have different levels of variability and average returns.

  • A higher equity allocation increases investment risk (more ups and downs), but can reduce inflation and longevity risk because of potentially higher long-term returns.
  • Being too conservative can actually increase the risk of running out of money in retirement.

Why your projections might not match the success rate

Even though the Success Rate tool doesn’t use your custom return assumptions directly, changes in the main projection (like increasing equity returns to 10%+) can still indirectly affect things like:

  • Taxable income and tax liability
  • Government benefit eligibility (like OAS or GIS)
  • Asset allocation over time
  • Total fees paid

These factors are pulled into the Success Rate simulation, which is why results may differ — for example, a projection showing a $6.89M estate might still have a 32% chance of failure, revealing more realistic outcomes.

Why we recommend leaving the default return assumptions

The default rate of return assumptions are based on long-term guidance from FP Canada, the standard for Certified Financial Planners (CFPs) in Canada.

  • Using significantly higher returns (e.g. 10%+) will produce projections that look overly optimistic, and may mislead your long-term planning.
  • The simulation model isn't calibrated to work well with returns outside a realistic historical range — it may not provide meaningful or accurate results. Simply put, the more returns deviate from default assumptions, the less helpful the Success Chart will be to your planning.