Ellis Bates Financial Advisers
Cash flow forecasting is a way of planning and analysing your financial goals, projecting them forwards over time, to consider how changing circumstances will impact this plan and to see how likely it is these financial goals can be achieved and the actions needed to be taken along the way.
Retirement forecasting can be tricky and that’s where the cash flow forecast software comes into its own, helping you visualise your expenditure, income and preferred lifestyle.
For our younger clients who may not necessarily be thinking of retirement planning, we use cash flow modelling to monitor how investments are performing vs inflation and tracking savings plans vs big life events etc.
| Specific | Measurable | Achievable | Relevant | Timebound | ||||
|---|---|---|---|---|---|---|---|---|
| We need to know the specifics of what exactly you are trying to achieve e.g. I want to have a comfortable retirement. • What does this mean? • What is 'comfortable'? • What does retirement look like for you? • When are you planning to retire? • Would you like to retire earlier • What are you prepared to commit to achieving this goal? | We need to get some monetary figures around this, or we can't track it. It may be that we need to make some initial assumptions. • How much income will you need? • When do you need it? • How long do you need it for? We just need a starting point to work towards. The sooner you start planning, the better! | Once we have agreed what we are working towards and the figures we are working towards we can start to work out what is achievable. • Your Financial Adviser will be able to take an initial view on achievability from your discussions during the fact finding process. • Together we will look at all your current and potential future assets to assess achievability of your goals and what actions are needed to make them happen. | In many cases, the client may not be able to achieve everything, so this is where we prioritise with the client what is important. • Have we identified your financial needs? • Have we looked at addressing these first? | Nothing ever stays constant, and it is likely that goals will change over time. However, we need something to work towards. • What is the date or timeframe for your goal? e.g. for retirement? • Can your goal be achieved in this timeframe? |
Dax Bayley, Regional Manager & Financial Planner at Ellis Bates
Dax Bayley, Regional Manager & Financial Planner at Ellis Bates
A retirement financial planning goal would be to cover what we agree to work towards for you and your family, to give you the retirement lifestyle you would like. The goals would include both the amount of regular income to live on and any lump sums that you would want to maybe pay off such as your mortgage, travel, gift to your children for a house deposit etc.
With income goals, especially with retirement income as clients get closer to their retirement age, we normally split goals up into ‘Essential’ and ‘Desirable’.
With your SMART goals in place, we enter all the financial information into the software, to create a graphical picture of your financial cash flow forecast and future. It is fully interactive, allowing us to simulate different types of scenarios and stress test how much financial resilience you may have to factors outside your control, such as economic changes, volatile markets and life events.
You can look at you retiring early, downsizing, increasing your contributions etc.
You can also get an idea of what might potentially be left to pass on to your family as inheritance.
There are lots of tools on the system that help us analyse where you are now, and what actions you can take to help you achieve your goals.
Cash flow modelling sits central to the financial planning and estate planning process and is a powerful tool to help bring your retirement planning goals to life.
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