Cash Flow Modelling
At Joslin Rhodes, one of most powerful tools we use within our unique PlanHappy Lifestyle Financial Planning process is cash flow modelling.
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Cash Flow Modelling with Joslin Rhodes
Cash flow modelling is designed to give you a clear picture of your income, expenses, and financial goals over time. So, whether you are close to retiring or just starting to plan, this can help give you assurances that you’ll have enough – and if not, identify when and where additional savings need to be added.
What is Cash Flow Modelling?
Cash flow modelling is a Financial Planning tool that creates a detailed forecast of your future income, spending, savings and investment growth. It also factors in inflation which many people, when trying to plan on their own, often miss out.
It looks at your current financial information—like assets, pensions, and expenses—to show how your finances will change over time. And by seeing your big picture, or ‘sketches’ as we call them, you can not only visualise your retirement but you can make smarter decisions and adjust your plan accordingly should your circumstances change.
How Does Cash Flow Modelling Work?
When you work with one of our specialist financial advisers to create a cash flow model, they will:
- 1. Gather Your Financial Data: This includes your current income, savings, pensions, investments, and estimated future expenses.
- Defined Contribution (DC) Pension Trusts: In these trusts, contributions from you and your employer are invested, and the value of your pension depends on the performance of these investments. The retirement income is not guaranteed and depends on the amount accumulated in the trust.
- 2. Forecast Future Scenarios: Taking into account changes like inflation, investment growth, life events and potential care fee costs.
- 3. Show You the Outcomes: You’ll get a visual ‘design sketch’ that represents your entire retirement years, up to the age of 90.
- 4. Adapt Your Plan: To ensure you have a plan that’s built just for you and the lifestyle you want to live, we’ll work with you to test different scenarios (like retiring earlier or saving more) to see what will make you happiest.
Benefits of Cash Flow Modelling for Retirement Planning
Cash flow modelling is an essential tool for anyone planning their retirement. Here’s why:
- 1. Clarity and Confidence: Cash flow modelling gives you a clear picture of how much money you’ll have in retirement. It answers crucial questions like:
- Will I have enough?
- Can I afford to retire earlier?
- 2. Plan for Life Events: Life is unpredictable, and cash flow modelling allows you to prepare for unexpected events. Whether it’s helping your children with wedding costs or supporting your grandchildren with school fees, handling medical expenses, or dealing with market fluctuations, you can model “what-if” scenarios and adjust your plan accordingly.
- 3. Track and Adjust: Your financial circumstances will inevitably change over time. So with cash flow modelling and our annual ‘Update & Improve’ meetings, we can update your plan regularly to ensure it’s still fit for purpose and does what it needs to do for you.
- 4. Maximise Your Retirement Income: By analysing your future cash flow, you can identify opportunities to make the most of your retirement income. For example, you might discover when to start drawing from your pension, how much to withdraw, or how to reduce your tax liability. This can result in a better use of your money over time.
- 5. Peace of Mind: Retirement should be a time to enjoy life, not worry about money – and cash flow modelling does this.
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Whether it’s pension puzzles, care fee planning chaos, or sleepless nights from financial worries, we’re here to help.
Ready to see your future?
If you want to stop talking numbers and bring your retirement plan to life. Get in touch today for a FREE consultation.
We'll show you:
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When you can afford to retire
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How much money you'll need in retirement
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How to make the most of your pensions and other assets to fund your lifestyle
