What is the difference between a 'What If' and a 'Scenario' in planning?

• A. What Ifs are hypothetical situations that can't be controlled; Scenarios are within the client's control
• B. What Ifs are client-controlled; Scenarios are random
• C. What Ifs are for taxes; Scenarios are for investments
• D. What Ifs and Scenarios are the same

Answer: (A)

What Ifs test resilience to external uncertainties, while Scenarios map out plausible futures based on actions the client can influence. In planning, a What If looks at external, unpredictable events—things the client can’t directly control, such as a market downturn, changes in tax laws, or unexpected major expenses. A Scenario, however, is a plausible future path built from choices the client can make and assumptions they can influence—like adjusting saving rates, changing spending, or rebalancing an investment portfolio.

So, the best choice captures that What Ifs represent external possibilities outside the client’s control, and Scenarios reflect outcomes you can shape through client actions. For example, a What If might ask, “What if the market drops 20% next year?” whereas a Scenario would explore, “If the client increases contributions and retires later, how does the outcome change?” That distinction explains why the other framing—What Ifs being client-controlled or scenarios being random, or mixing them with taxes vs investments—doesn’t fit.