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This Return Sensitivity Analysis can help you understand how the retirement
plan will react if market conditions are different than those used in the
planning assumptions. You can specify the range of returns that will be
simulated. In the example below, the first simulation is run with the new
assumptions that the return on equities will be 200 basis points (2%) less than
the base assumption. The first simulation also assumes that bonds will
return 100 basis points less and cash 50 basis points lower than the base
assumption. Subsequent simulations are incremented by the basis points you
specify.
Eleven simulations are run and by comparing the outputs, you can evaluate the
sensitivity of the retirement plan to market returns.
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