Would you like to know if you can afford to retire?
The use of Lifetime Cashflow Planning can help to answer important questions such as this. At Clover Wealth Management we use this as part of our planning process.
Often people save in a variety of places such as banks and building societies, pensions, investment properties or Stocks and Shares ISAs. All of these products make up part of the financial jigsaw, but often are looked at in isolation and not as part of a coherent plan to achieve a goal such as retirement.
Lifetime Cashflow Planning can help to achieve this, the concept is to:
1) Consider what lifestyle you would like when you retire in term of goals and dreams.
2) Establish what this lifestyle may cost.
3) Gather together details about your current financial position
(income, expenditure, assets and liabilities).
4) Consider areas such as inflation and investment returns.
5) Build the plan.
This plan will give a guide as to whether your goals are achievable, if not then you could:
1) Alter your retirement requirements
2) Retire later (or not at all!)
3) Save more money
4) Take more risk
Our role as your financial planner is to help build the plan, discuss the results and look at your options to establish the best way forward.
This approach really gives our clients a unique perspective on where they are now, where they want to be in the future and how they can get there.
Any plan built on assumptions, needs to reviewed, as real life will likely differ from the assumptions in the plan. Reviews help the plan remain relevant and up to date.
As with many things in life the more you put in the more you get back and we find that when our clients really spend time thinking about what they want to achieve and when, the cashflow planning becomes much more relevant and useful. For example, we recently carried out a Lifetime Cashflow Planning exercise for a couple and as a result of this they sold their business realising that they could afford to do so and would probably have done so earlier if they had seen the bigger picture before. They are now thoroughly enjoying their retirement.
Lifetime Cashflow Planning can help you gauge if you are on target for the future you want.