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Retirement cash flow modelling

Assessing your current and projected wealth, income and expenses

Retirement planning is of utmost importance, regardless of your income or wealth. It ensures a steady income stream after retirement and provides financial security for you and your loved ones.

Retirement cash flow modelling can provide numerous benefits to individuals seeking financial security and planning for the future. By assessing your current and projected wealth, income and expenses, retirement cash flow modelling can help you understand your current and potential future finances.

Here are some key reasons why retirement cash flow planning is crucial:

Avoid running out of money: Planning helps you calculate the savings rate required to support your desired lifestyle during retirement, ensuring you don’t run out of money.

Setting retirement income goals: This involves determining your retirement income goals and identifying the necessary steps to achieve them. This allows you to plan for various financial sources and secure a comfortable retirement.

Creating a regular flow of income: A well-structured and regularly reviewed plan enables you to create a regular flow of income after retirement. This fixed income substitutes your pre-retirement salary, ensuring financial stability.

Strategic investment decisions: Retirement planning involves making strategic investment decisions to achieve specific savings goals. This helps in maximising returns and growing your retirement fund over time.

Financial security: By having a solid retirement plan, you can provide yourself and your loved ones with financial security. This is particularly important as more than social security benefits is needed to sustain your desired lifestyle.

Enjoying a comfortable retirement: A comprehensive retirement plan has the potential to allow you to enjoy a comfortable retirement, free from financial worries. It provides the means to pursue your desired activities, travel and maintain a high standard of living.

Reviewing existing pension arrangements: Regularly reviewing your existing pension arrangements and taking the required steps can significantly affect the amount of money you’ll accumulate for retirement. Seeking professional help can ease the process and ensure you make informed decisions.

How retirement cash flow modelling can work for you

Managing accumulated wealth: If you have accumulated wealth, retirement cash flow modelling can assist you in effectively managing your financial position and making informed decisions as you retire.

Long-term planning: Cash flow planning is especially beneficial if you have long-term personal or business objectives. It lets you determine how much you need to save and the returns required to meet those goals.

Care home fees planning: Cash flow modelling can also be used for planning care home fees, helping you understand the financial implications of such expenses and prepare accordingly.

The retirement cash flow planning process involves:

  • Assessing your current financial situation, including income, expenses, assets and liabilities.
  • Understanding your future financial commitments and goals.
  • Creating a lifetime cash flow modelling plan tailored to your needs.
  • Providing a comprehensive analysis of your income, expenditure and potential future cash flow.
  • Working towards achieving and maintaining financial independence.
  • Adequately addressing the financial consequences of death or disability.
  • Minimising tax liabilities through effective planning.
  • Developing an investment strategy for your capital and surplus income.
  • Identifying Inheritance Tax issues that may impact your beneficiaries.

Answering critical questions

Ultimately, retirement cash flow modelling helps answer critical questions such as whether your savings and assets are sufficient to support your aspirations if you can retire early, if your investment risk is appropriate and if you will have enough money to sustain yourself throughout retirement.

Are you looking to create your retirement cash flow plan?

Contact us now for more information. We assist you in analysing your current financial situation and creating a customised plan to ensure your retirement meets your goals. If it turns out that your cash flow plan falls short, don’t worry! We have various retirement planning strategies to help get you back on track.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.

THE TAX TREATMENT IS DEPENDENT ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).

THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.

Adam Reeves

Author: Adam Reeves

DipPFS Cert CII (MP&ER) EFA
Independent Financial Planner, Wealth Manager, Director

Last updated on

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Adam was quick to assess & understand my situation, and was able to discuss & communicate in a very concise and simple way the various options available to me, taking time for me to understand and clarify where necessary. My understanding & knowledge of taxation & pensions has increased significantly allowing me to feel much happier making financial decisions for the future.

Rob – West Sussex

Adam and his team undertook in-depth research into our existing QROPS schemes and clearly set out both pros and cons of transferring the funds back to the UK. Having decided to go ahead with the transfer, Adam and his team worked extremely hard to facilitate the transfer. The QROPS pension trustees were not always the most professional or responsive organisation – however we were very grateful for the perseverance and commitment that Adam showed us as clients.

Jonathan – East Sussex

Adam offered a range of financial products , the one he suggested was affordable and proved to be a good choice.  Returns on investments have exceeded my expectations, based on Adam’s advice and guidance. Profits have enabled house improvements to take place.

David - Surrey

Adam arranged an appointment very timely, he explained his role and qualifications as an IFA giving me reassurance , we went through my retirement and investment goals. Adam discussed my options explaining in great detail, I felt relaxed during our discussions allowing me to fully understand my choices. I feel very confident in the financial advice allowing me to enjoy my retirement.

I was very happy with Adam’s recommendations and explanations of financial products which would suit my retirement goals, I feel this has helped me review and reduce my financial risk as I reach retirement, leaving me feeling confident that I can enjoy my retirement plans.

Ron – West Sussex

After initial meeting Adam put together a very detailed and thorough written plan. At our second meeting he went through the whole booklet and explained everything in layman’s terms which made it a lot easier to understand.

I am very happy with everything that was suggested and put in place especially with something as big and important as pensions. Adam and his team have taken a huge weight off my shoulders and I would highly recommend their services to anyone needing help with their financial planning and pension.  Adam couldn’t have been more helpful, and even came outside his normal area to meet me on a number of occasions.

Richard - Kent

Unfortunately I had to claim on my critical illness insurance due to my wife being ill and because of the sound advice Adam gave in acquiring this insurance we ended up being financially safe through a tough time.

Steve - Kent

Adam did a review of our financial situation, confirmed that Flexible Drawdown best suited our needs as a family, and then did all the research into the best product for us. He will continue to monitor it for me. He acted extremely promptly because we had a deadline for requiring the lump sum; went out of his way arranging meetings during non-office hours, was professional yet friendly and explained a difficult subject very well.

Clare – East Sussex

Adam did a thorough review of my pension policies, clearly explained how well they had performed, how flexible they were, how the market regulation has changed, and, crucially, what the tax implications would be if I were to leave them untouched. He accurately assessed my attitude to risk and recommended an up-to-date solution that will offer me the greatest flexibility at retirement.

Greg – East Sussex
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Data is compiled by Adviser Portals Ltd every 60 minutes. Information is not realtime. Last updated: 01/12/2023 at 11:00 PM
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