A tool designed to estimate one’s future financial standing typically considers current assets, liabilities, income, expenses, and anticipated investment growth. For example, such a tool might project a user’s assets five or ten years into the future based on a selected average annual investment return rate and estimated future income.
Understanding future financial health offers valuable insights for planning major life events, such as retirement or purchasing a home. This foresight empowers individuals to make informed decisions about savings, investments, and spending habits. Historically, these projections often required complex manual calculations or consultation with financial professionals. Modern technology now provides greater accessibility to these crucial planning resources.