Retirement Planning Strategies - Hot Topics Q&A

Q. I have accumulated various investments and pensions over the years as well as having 25 years service in the NHS Pension Scheme. I’m now aged 50. How can I plan so that I know I’ll have enough for myself and my wife if I slow down at age 55, and retire at 60?

A. This is one of the most fundamentally important questions clients ask us. How would they know? The answer is to ensure that your adviser always uses something called cash flow modelling.

This is a measurement system that maps all your net worth on the one hand, and compares it to the goals you have for the rest of your life on the other. It then produces a forecast so that you know in advance how long your money will last at specific points in the future to ensure you don’t run out of money. 

To go back to the question from our GDP. Once we’d built his cash flow model we were able to see that he:

-had more than enough money to achieve his objectives
-was able to concentrate on eliminating debt
-could take steps NOW to reduce the risks he was  taking with his existing  investments as he could still reach his goals by doing so
-was able to consider full retirement at age 58 not 60

This meant that this dentist is now fully in control of his financial future, as he knows what he can achieve and when.

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