Retirement cashflow analysis
Do you know how much money you will have at retirement? Will it be enough to give you the sort of retirement you’ve always dreamed about?
What level of income you will be able to draw on annually throughout your retirement without running out of money?
The answers to these very important questions can be found by using a technique called ‘Retirement Cash-Flow Analysis’.
Providing certainty in an uncertain world
In the past retirement has been a sprint. Only 50 years ago the average life expectancy was about 68 years for men and 74 for woman. If you retired at age 65 (and many did) you really did not have that long to enjoy your retirement years.
Now, retirement is more like a marathon. The average life expectancy has grown to age 77 for men and 82 for women. On top of this we are retiring earlier. For many of us retirement could last for decades.
Understanding your financial position is important to having peace-of-mind at any stage of your life. It is crucial in retirement, where people usually have a finite level of funds to last an unknown number of years.
We have seen too many times the stress and worry caused to people that are running out of money when they should be care-free, and enjoying the ‘golden years’ of life. Having to limit your lifestyle choices or alter your retirement plans, when you have the time and desire to live an active and varied retirement is at best frustrating, and at worst, depressing.
By understanding your financial position and living accordingly, you will limit the risk of unexpected financial surprises down the track.
Planning for a better future
Retirement cash-flow analysis can be a useful planning tool that can highlight areas in your financial life that need improvement, and clarify where changes need to be made.
It can highlight such things as:
- How much more do I need to save to retire the way that I wish?
- What do I need to do to retire earlier?
- What would be the outcome if I invest more? Or in different types of investments?
- What if we downsize our home in 20 years, what impact would that have on my retirement income?
- How does leaving varying levels of assets to my children affect my retirement goals?
- How does minimising tax affect the outcome?
- And many more – the list is virtually endless
By undertaking this analysis, you will be able to see how different variables affect your outcome and be better able to plan what’s right for you.
We are all different
We all have a different set of goals and desires in the way we wish to live our lives. We all have our own unique set of variables. By incorporating these important elements into the analysis, we can then provide outcomes that is specifically tailored just for you.
Once this information is in place, it can be adjusted over time to conduct a wide range of ‘what-if’ scenarios.
- What if you worked 3 years longer?
- What if I saved $5,000 p.a. more over 10 years?
- What if I invested more in growth assets? And so on.
It is by understanding your financial position that you can build a level of certainty and peace-of-mind throughout retirement.
This exercise may not be necessary for most of us on a yearly basis, but we would recommend a review every 2-4 years depending on your individual set of circumstances.
If you would like to know more about our Retirement Cash-Flow Analysis service, or you would like to speak with one of our staff members, please feel free to contact us at firstname.lastname@example.org or call us on 1800 830 763.