How much do we really need for the future?

This is a question that confounds many people. Between living, paying off debt and affording discretionary spending items (such as school fees, travel or similar), we still need to be saving for retirement. In such a consumer driven society, having what we want now (often with someone else's money) is not only seen as normal, but expected.

"The cash flow modelling was a fantastic way for us to gauge - in a realistic way - our annual financial needs well into retirement"

A great way to gauge what path we are on is to do a little looking into the future. That's where our long term cash flow modelling is invaluable. It helps you better understand questions like:

  • Can we afford schooling for our children?
  • Are we adequately insured?
  • When can we stop work?
  • How much do we really need for retirement?
  • How long will our money last?
  • Do we need to downsize our house?
  • Can we afford to financially help our children?

It doesn't so much provide an answer, rather it shines a light into the darkness. As a client noted:

"The cash flow modelling was a fantastic way for us to gauge - in a realistic way - our annual financial needs well into retirement. It not only gave us comfort that we are well positioned for the years ahead, but also clearly showed where we can make changes and what effect they'd have."

The objective of our modelling is to:

  • Model your expected and likely expenses and how these may vary over time
  • Model your expected and probable incomes and how these may vary over time
  • Use conservative assumptions (this is not an exercise in 'gilding the lily')
  • Stress test the outcome with lower (than already conservative) rates of returns

A key output of the modelling is a graph of the cash flow, asset and liability balances over time (in current day dollars).  Our analysis is far more detailed than this, but the graphs provide good initial insight.

Talk with us about the cash flow modelling and how it may help you to shine a light into the darkness.  To our minds this is the very foundation of what is financial planning.