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Whilst focusing your attention on what you want will massively increase your chances of achieving it, this also applies to focusing on negative outcomes.
Leading up to and during your retirement, focus on a plan that delivers what is important to you. First you have to build one!
Let’s start with your Bucket List—the list of things you want to do during your lifetime. These items can feel either minor or massive. Don’t worry too much at this stage if either is the case—just get your list written down. You will feel better having a list of items to focus on, whether or not you know how to achieve them.
As a result of the ‘Necessary Income Budget’ exercise, you also have a budget for the reminder of your life, and you can start to put the pieces together. Look at how you might achieve these items, when, and how much they will cost. For this, we need to start to forecast your future, and we will do that by introducing the concept of the ‘Lifetime Cash Flow Forecast’.
The Power Of A Lifetime Cash Flow Forecast
Most people go through their life not really knowing what their financial future looks like.
They can see what they have now, and how their decisions have affected their money in the past by looking in the rear view mirror, but they do not look further ahead than the next corner or signpost when it comes to their finances.
As a result, people get lost, and most don’t get to where they wanted to go. Whilst they might not be a millions miles away from where they wanted to be, to undo those wrong turns isn’t quick and easy. With your money this could mean that you run out during your lifetime, or you could be dying the richest man in the graveyard, leaving your children with a big Inheritance Tax bill, and not having done some of the things you always wanted to do.
So when it comes to your finances, a Lifetime Cash Flow Forecast can guide you along the motorways of your financial future. It clarifies what your financial future will look like. It projects your life forward, allowing you to build in the aspects that are important to you, so that you can see how they will impact your financial future. It allows you to make more informed decisions because you can see the impact those decisions will have on your future.
Lifetime Cash Flow Planning enables you to visualise your current wealth, and how life decisions may affect your wealth over time. It is vital in financial planning, as it helps you gain greater clarity around your financial future. I want you to imagine that your
life, from here to the end, as a timeline. The first thing to do is to set an end point for the timeline: When you are going to die. It is not an easy place to start, but it’s necessary.
The idea of a Lifetime Cash Flow Forecast is to project forward several factors of your finances to Your NEW Life Expectancy. The first and most important is to forecast your income versus expenditure. This will show you whether you have enough income to meet your needs or if you are going to have insufficient income. Inflation and investment growth make this more difficult to predict, particularly if you have many different investments, pensions, incomes and expenditures.
A Cash Flow Forecast will also show you the value of your investments, pensions and other assets over time so you can see if you are running down your money or allowing it to continue to grow. If your Cash Flow Chart highlights a shortfall, on your Liquid Asset Chart you will start to see why.
Liquid Asset Charts
This explains what we saw in the Cash Flow Chart. As well as projecting forward how your life is going to pan out financially, a Lifetime Cash Flow Forecast will help you to project forward to new scenarios, allowing you to see the impact of changes you can make today.
By using this tool effectively, you can work out much more accurately how much you should save before retirement, and how much you can spend in retirement.
I believe a goal is a dream with a deadline and a plan. By building a successful plan, you can make the decisions today that will lead to the results you want in the future. Planning clarifies and empowers you to take the right action now, safe in knowledge that you have clear foresight of your future.
Whilst a Lifetime Cash Flow Forecast can ensure that you have enough money to stop work and that you plan your income wisely at retirement, its effectiveness does not end there. We use a Lifetime Cash Flow Forecast to help many people who are already well into their retirement. Not only does the tool allow retirees to plan their income effectively, it also allows them to manage their estate better. In addition, it can help manage your estate more effectively. It also allows you to make gifts early enough to live seven years necessary to avoid Inheritance Tax, and investing in Trusts to remove assets from your taxable estate.
Getting older might make you feel like you are slowing down. Do not be fooled into thinking this is cognitive decline, you have so much information in your brain that it takes more time to access it! You can be stronger and happier in your retirement than ever before. Life is an adventure, you can expect change and embrace it. Learn the right time to retire, how to boost your retirement income and create your dream retirement. Follow your dreams and love what you do!
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