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Our advisers are strong advocates of cash flow modelling and will use it with clients where appropriate.
Once your adviser has identified personal financial goals and objectives, your financial objectives will be modelled alongside current and future assets to identify if your objectives are realistic and, most importantly, whether they are sustainable.
Lifetime cash flow modelling is an invaluable exercise for those for clients who are planning for or entering retirement. We often get asked: ‘Can we afford to retire now and have an income of £X through to age 70 whilst our health is likely to be good, and then £Y for the rest of our expected lives without running out of funds or income?’ It is exactly these types of questions that cash flow modelling can help to answer.
It also holds added value because additional variables can be added and modelled into the process. Some examples of variables would include future inheritance, the commencement of pension income, downsizing and gifts of capital to children. Unexpected events such as emergency medical costs and stock market crashes are also considered.
The benefit of cash flow modelling, is that it provides the ability to visualise with clients the full picture of possible outcomes based on the projections and assumptions used, and whilst the modelled outcomes are not guaranteed, it does provide clients with a greater understanding of how we can achieve their financial objectives together.
Retirement planning is fundamental to any financial plan, no matter what stage of life you are at. It may be that you are just starting to seriously think about how much income you will need in retirement, or you could be at the point where you need to make decisions about drawing down on your pension.
As Independent Financial Advisers we have access to the full range of pension products, including:
Pension planning can be extremely tax efficient and we can provide you with professional advice on some of the more technical aspects, such as:
With financial planning, we can help you to determine how much income you would need in retirement and put plans in place to help you build up the required pension pot. Once you have reached the age that you wish to take your pension, we can guide you through the options available as the ‘pension freedom’ reforms of 2015 changed retirement planning significantly.
We can also consider intergenerational wealth planning and ways in which to pass down your unused pension funds, usually free of Inheritance Tax (IHT).