The Benefits of Lifestyle Financial Planning.

Planning is defined as the process of deciding how to do something. Therefore, when it comes to your finances, surely planning is essential.

But, whilst it is quite easy to see the value of what you have today, it is much harder to understand what that will be worth in the future and whether that value will be sufficient for your future requirements.

Then, after that, you have to consider the ‘what ifs’ of this world. Sometimes, these are the things that make life interesting, but can have an adverse effect on your finances. These may include holidays, family issues or new projects. Other times, it is the things that are out of your control that cause you some issues. These include legislation changes, stock market volatility and product advancements.

When it comes to planning, there are the key questions that must be asked. There are the simple ones like how much income do you need in retirement and at what age can you retire? But there are many other questions that are normally more personal to your circumstances, which must be considered.

These may the interesting ones like

Can I work part time before or after I retire if I want to?

Can we afford to buy a second home?

Can we celebrate retirement with a World Cruise?

And then of course there are the difficult ones like

What if we need some sort of Long Term Care?

Will my family be okay of I am not longer about or unable to work?

What if we haven’t got enough income to retire?

All these factors show why it is so important to have a plan when dealing with your retirement. What is just as important is that it is kept up to date.

That’s why we use Lifetime Cash Flow Planning.

What is Lifetime Cash Flow Planning?

A Lifetime Cash Flow Plan uses sophisticated modelling software to produce your own long-term financial plan based on your current financial situation. It can demonstrate whether you are likely to achieve your future objectives and what actions you need to take to keep your plan on track. The aim is to use the tool as a form of map to ensure you are heading the right direction. The plan can answer key financial questions such as:

  • What will my income and tax position be when I retire?
  • If I took my desired income in retirement, would I run out of money
  • How will my attitude to investment risk affect my long-term growth?
  • What level of investment return do I need to achieve my objectives?
  • How will inflation affect my savings and income over the longer term?
  • How much inheritance tax will my family have to pay?

These questions and more are covered by the Planning tool and aim to re-assure you concerning your financial position.

Some other more personal questions can then be built into the system that will make the plan absolutely unique to you. We can consider different life choices. This may include retiring early, downsizing your house, offering your children some financial support or traveling extensively. It might be as simple as financing a brand new sports car or a brand new kitchen.

The aim is to enable you to be comfortable with the choices you make as you come up to and go through retirement.

The system we use is called Voyant. It enables BALPA Financial Solutions to help you plan your future cashflow by forecasting your Income and Expenses, Assets and Liabilities, so that we can devise a plan that is robust. The system presents these financial planning calculations in a way that is easy to understand and simple to amend.

The aim is to bring your financial plans to life, allowing you to be more comfortable with your financial future.

If you wish to discuss the content raised in this article, simply call 020 8476 4100 or email BFS@balpa.org