Approx. 5 mins read time

The importance of creating a lifetime financial plan

It is almost inevitable that people have worries and questions about their finances in the future. Without answers, it is common to walk blindly through different stages of your life and various life events without truly understanding what is possible and quantifying the full potential of your life’s accumulation of wealth.

Money, savings, pensions, ISAs, fun money, bingo fund, however you want to classify your funds, ultimately, they only have one purpose. These funds are a tool for you to achieve all the things you want from life. It is at this point when questions arise, your goals will need to be quantified and you can really start to plan to live what my son refers to as his ‘best life’.

Without clarity, evaluation, justification and validation, how can you answer questions such as:

  • How much money do I need to provide me with a sufficient income in retirement?
  • When can I afford to retire based on my current financial position?
  • What gifts can I give my family without impacting my quality of life?
  • If I need long term care in the future, will I have enough money so I am not a burden on my family?
  • What level of risk do I need to take with my money to achieve the life I want? Can I afford holidays, hobbies, donations?
  • Am I selling myself short? Am I overreaching?

Our financial planners have years of experience working with clients to answer these questions. We use a forward-looking analytical system (known as Cashflow), which is a fantastic tool to illustrate where you are regarding your financial objectives, how to get to your dream position and to understand the consequences of certain decisions.

By utilising our Cashflow service, you will be given a clear picture of what your financial life could look like. We will factor in as much detail as possible relating to your own financial position and also consider potential rates of inflation alongside projected investment returns based on an agreed level of risk. The results are complemented with ‘stress tests’ to show how market fluctuations might impact the financial plan.

The results of our analysis are then updated interactively with you, allowing us to show you how changing your goals and objectives may impact your future. This could result in bringing your retirement forward, taking more or less investment risk or increasing your tax efficient income.

> Find out more about our lifetime financial planning service

Have you ever thought:

  • What if you could retire now?
  • What if you gift money now to children and see them enjoy the money now rather than when it’s too late?
  • How does downsizing your home change your lifestyle?
  • How can you make every penny count and reduce the tax burden?

Cashflow brings the confidence and peace of mind to make considered, educated, and informed decisions instead of speculation or best guess.

To demonstrate the power of this process, it is helpful to replay some recent discussions we have had with real-life examples. We would like to share the dramatic impact the Cashflow discussions have had on some of our clients’ lives.

Case study: Business owner

Only 18 months after a client started trading, they wanted to fully understand and appreciate the implications of their decision to become self-employed. They were keen to understand their financial position and ensure they had made the right decision.

In this example, the Cashflow was utilised in two main areas. Firstly, the client could benefit from funding their pension more aggressively to accelerate their retirement plans. Secondly, we looked at their protection position. Having lost their comprehensive employer package, they could see that they remained in a place of financial strength with some amendments to their existing policies. The impact reduced the client to tears of relief and happiness! A surprising but not uncommon reaction to peace of mind.

Case study: Approaching retirement

A client approached us to review their retirement planning options and having completed a Cashflow exercise to illustrate how the client could maximise their financial position, the outcome showed the client that they could afford to retire immediately and still be financially comfortable. The client resigned from their role following our meeting and was eternally grateful for our service.

Imagine if you were in that position. You may decide to continue in your job for a few more years. Walking into work knowing you are doing your job for love rather than money is a powerful feeling.

Financial planning to help you

You may be looking to understand how your life’s accumulation of wealth can be used to support your objectives. Alternatively, you may want to understand what action you need to take to improve your position and achieve your plans. In either case, we are here to help and assist.

Please get in touch with a financial planner in your local office to discuss how you can make educated, informed decisions and realise your wealth’s full potential.

The Financial Conduct Authority do not regulate cash flow planning.

Andrew Kirk
Featuring: Andrew Kirk
Andrew began his career in financial services in 2002 and has worked for a variety of banking and wealth management institutions, gaining varied experience advising… read more

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