Cashflow Modelling – Retire with confidence

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With effective retirement planning, you can retire earlier and still enjoy life after work to the full. But if you feel like you don’t know where to begin with your retirement plan, Cashflow Modelling can be both insightful and reassuring. That’s why Lomond Wealth has invested in the very latest software and training for our retirement planning team.

But what is Cashflow Modelling? Here’s a simple breakdown of this amazing system and what it can (and can’t) do to give you more peace of mind on the road to retirement.

What is Cashflow Modelling?

Having an overview of what you are worth right now and knowing how much you want to have for retirement is a great start. But Cashflow Modelling goes way beyond that. It helps plot the journey between those two points. Actually, it plots multiple possible journeys.

Think of Cashflow Modelling as building an overview of your net wealth at any given point in the future. This includes your investments, debts, income, expenditure, property, the lot. It really is the big picture of your financial health.

It does this by creating multiple scenarios based on various future decisions you might make, as well as potential world events. This creates a reassuringly robust roadmap for your financial future. As part of that map, it helps to:

  • Identify how decisions can alter your future
  • Plan to minimise tax liabilities
  • Balance your income and expenditure
  • Plan your ideal retirement lifestyle
  • Avoid running out of money
  • Plan your legacy to loved ones or good causes

Can Cashflow Modelling help me hit my retirement goals?

Yes, and in more ways than one. In planning for life after work, Cashflow Modelling can anticipate various scenarios without changing your ultimate retirement goals. This promises the peace of mind that your later life ambitions can be achieved, whatever they are and whatever happens along the way.

Here are a couple of examples of how Cashflow Modelling can help people with different retirement goals in mind:

Cashflow Modelling Scenario 1 – Time Focussed Retirement Planning

For you, it might be that retiring sooner is the priority. Say you really want to retire at 55. Well, Cashflow Modelling can show us multiple scenarios where this is possible. In some of them you might have a slightly lower annual income, while in others it will be higher. But the focus will remain on modelling paths that lead to you enjoying every day beyond 55 away from work!

A cashflow modelling graph showing the projected finances of a retirement at age 55

In the above scenario, a little more careful budgeting in later in life means this person won’t have to work a single day past 55.

Cashflow Modelling Scenario 2 – Income Focussed Retirement Planning

Alternatively, there may be a set annual income you think you’ll need to fully enjoy retirement. After all, stopping work shouldn’t mean sacrificing your lifestyle. With all that extra free time, you want to make sure you have enough income to appreciate it. In this case, Cashflow Modelling creates multiple scenarios focussed on reaching that all-important retiral income target. In some scenarios you might have a lower retirement age, in others it might take a couple more years to get there. The key thing is, when you do stop working, you’ll have all the money you need to live the lifestyle you want, without the fear of running out early.

A cashflow modelling graph showing the projected finances of a retirement at age 60

In this scenario, retiring at 60 instead of 55 means this person can enjoy life after work without ever tightening their belt.

So what can’t it do?

Cashflow Modelling is an incredible piece of financial forecasting software. And it can do far more in addition to what we have covered above. But the human element is just as important as the technology. At Lomond Wealth, our personal retirement planning is genuinely built around making the rest of your life the best of your life.

The most important thing in our whole process is what a happy and fulfilling retirement looks like to you. Our team will take the time to get to know you, and to understand your hopes and fears for those after work years. You can learn more about how we do this on the Retirement Planning section of our website.

Together, we can create a retirement plan that provides you with total peace of mind. Because while the journey ahead will have many twists and turns, with Cashflow Modelling you can clearly see there is more than one path to achieving your ideal vision for retirement.

Retirement is closer than you think

While it often feels a long way off, it’s really never too early to start planning for retirement. Make today the day. Get in touch and after a chat with one of our Retirement Planners you might be surprised to realise how close your last day at work could be.