Retirement Cash Flow Modelling - A Tool To Help The Future You.
- AuthorDavid Martin
Retirement – The Road Ahead
We may have to work for 40 years to enable us to enjoy the retirement we dream about.
Although everyone's vision of retirement is different, they all require the same thing – enough money to fund it.
As Financial Planning Specialists our role in this is vital as we can help make your dreams become a reality.
Why should you worry?
Since the Government changed the rules and introduced Pension Freedoms in 2015, £35 Billion has been taken out of pension plans by 1.4 million people.*
Pension Freedoms have allowed people over the age of 55 to take as much or as little of their personal pensions as they liked. This led to fears that people with this new found freedom would take their pension life savings out to spend on luxuries leaving them with nothing to fund their retirement.
The reality is that this hasn't happened to a greater degree, with year on year average withdrawals showing a downward trend.
However the biggest retirement concern remains – 'will your money run out before you do?'
Live for today – Plan for tomorrow
Life is unpredictable, the Coronavirus pandemic has reaffirmed this. Take too much income from your pensions too soon and it could run out leaving you with some very tough decisions to make.
This is where a Retirement Cash Flow Modeller can become such an invaluable tool.
As Financial Planners we use them by inputting all of your financial information such as income, outgoings, what kind of income you may want in retirement, what you might spend, assets, debts and other relevant information.
The modeler predicts how long your funds will last compared to an assessed age of death assuming such things as growth rates, tax and inflation amongst other things. It then produces a graph and a report that shows whether you will potentially have enough to fund the retirement you have always dreamt about.
Even with a positive outcome though it is still important to keep reviewing the figures and re-running the modeller on a regular basis to make sure that things haven't altered as the smallest changes can have a dramatic impact.
With careful planning everyone can have the retirement that they desire. Making sure we have sufficient funds to allow us to do so is vital. A Cash Flow Modelling Tool can shape our vision of what a good lifestyle in retirement can be and take some of the worry of 'what if' away.
If you would like to know more or would like to arrange for someone to contact you regarding your financial planning please click on the link below.
*Based on HMRC data