Wealth Planning -
How cashflow modelling can help you plan your retirement
Reaching the golden years of your life and realising that your savings are insufficient to maintain your envisioned lifestyle is not a situation anyone wants to encounter. This is why cash flow modelling is so essential, bridging today's financial decisions and tomorrow's financial security, especially when retirement is on the cards.
What is cash flow modelling?
Cashflow modelling is a form of financial planning that brings together your income, expenses, assets, and liabilities over time, visually representing the long-term effects of short-term financial decisions.
Understanding the big picture
Cashflow modelling does not just show you a snapshot of your financial situation at a single point in time; it plots your financial journey over decades. This big-picture approach allows you to see the potential pitfalls and windfalls of your financial decisions at various stages of your life. In the context of retirement planning, this means understanding when savings might run out or identifying years when your expenses might spike.
Example of a cashflow graph
Fine-tuning your retirement goals
Everyone has a different vision for life beyond work. Some might dream of travelling the world, while others want a more relaxed lifestyle spent with family and friends. Some continue to have business interests.
Cashflow modelling helps you to financially plan to reflect your vision. If your current financial circumstances or choices do not match your goals, you could have ample time to tweak your strategies accordingly.
Testing 'what-if' scenarios
Life is full of uncertainties, and the financial world is no exception. Recessions, unforeseen medical expenses, or sudden windfalls can all alter your retirement plans. Cashflow modelling allows you to play with 'what-if' scenarios, testing how different circumstances might affect your retirement pot.
Stress-free decisions with real data
Financial decisions, especially retirement ones, can often be stressful and uncertain. Although cashflow modelling relies on certain assumptions which are not guaranteed, it helps by turning abstract concepts into a visual representation of how your finances will be affected from early retirement through to the later years. When you see the long-term impact of a decision — be it investment choices, property purchases, or even seemingly minor lifestyle changes — it becomes far easier to make financial decisions with confidence.
Engaging a proactive approach
Cashflow modelling uses a proactive approach to your future rather than reacting to financial challenges as they arise. By seeing potential challenges on the horizon, you can devise strategies to either mitigate their impact or avoid them altogether. This forward-thinking strategy ensures a smoother and more comfortable transition into retirement.
The impact on your retirement
While various tools and strategies aid retirement planning, cashflow modelling stands out for its comprehensive, long-term approach. A detailed roadmap of your financial future allows you to make decisions today that ensure a comfortable and fulfilling retirement. If you are concerned about securing your lifestyle during retirement, it is worth speaking with a wealth planner about cashflow modelling.
With the right plan, guidance and advice, you can avoid these mistakes and get on the track to enjoy your retirement dreams.
Our survey uncovers attitudes towards retirement based on how people plan to spend their time, where they will live and how they will fund their retirement.
Starting your retirement planning as early as possible gives you the freedom to choose what life looks like in the next phase of your life.
Becoming a client
Take control of your finances today by completing our enquiry form. Alternatively, you can call us on the number below and one of our team will be more than happy to talk about your future.
This communication should be considered a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments, and the income from them can fall as well as rise, and may be affected by exchange rate fluctuations. Investors could get back less than they invest. Past performance is not a reliable indicator of future results. The tax treatment of investments depends upon individual circumstances and may be subject to change.
The contents of this communication are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.