Making better, or more realistic, expectations will give you the opportunity to make the required changes to your situation before it’s too late. Investors who are still in the savings stage will be able to make full use of their savings window rather than leaving it too late.

Investors in the spending stage will have time to make adjustments to their withdrawals and spending before they risk outliving their money.Investment return assumptions can be based on long-term historical returns of different investment cycles, rather than the last decade of great returns. They could even reduce this slightly to allow for any extended periods of lower returns, compensating by saving more or spending less.

Inflation rate assumptions can be based on long-term averages, which will immediately highlight that recent years of low inflation is not the norm in most countries. This will show the need to allocate investments to assets which have the potential to grow in excess of this number.

Future spending needs should be based on a realistic picture of what daily life might look like, and take into account additional expenses we all hope won’t be payable. Similarly, we need to take into account the increasing life expectancy for people who are well-educated and have access to quality medical care. Your memory of your grandparents may not be helpful when guessing how long you could live.