A retirement cash flow model runs your pensions, savings, property and spending forward one year at a time from now to age 100, with UK tax applied in every year. It shows the age your money runs out, or what is left at 100.
Dave is 54 and owns a plumbing and heating firm. Sarah is 52. They want Dave to stop full-time work at 61 on £3,600 a month after tax, in today’s money. They are invented, and their figures come from the engine that builds every Financial Plan.
Run two thousand more times with the good and bad years in a different order, the no-sale version lasted in 41% of runs.
Each stress test is reported as the number of years it takes off the age Dave and Sarah’s money lasts.
The first three years after you stop work carry the most risk. Poor returns in those years do more damage than the same returns ten years later, because you are drawing on the money while it is down. Why the order of returns matters works through it.
The years between stopping and your State Pension age are the most expensive part of retiring early, because savings pay the whole of your spending until the State Pension starts. Can I afford to stop at 60 sets out that arithmetic.
The projection applies income tax, including the Scottish bands, National Insurance, dividend tax, capital gains tax, the pension annual allowance and lump sum allowance, and inheritance tax on the estate. Cashflow modelling explains how each year is calculated, and our assumptions lists every growth, inflation and life expectancy figure we use.
The Financial Plan takes two to three weeks. Your part is the two-minute Healthcheck, about an hour on your goals, and ninety minutes going through the result. It costs £1,500, paid once, and covers a couple at the same price.
No. Cash flow modelling describes your position and shows what follows from each choice, such as stopping at 60 or at 63. It is financial planning, which is not regulated financial advice. Regulated advice is a personal recommendation on a product, such as which pension or fund to use, and Buzz Accounting Ltd is not authorised to give it. Where a decision in your plan needs a recommendation, we say so and can introduce you to Equity & General (FCA 474163). The introduction is optional, and we tell you about E&G’s commission to Buzz before it.
Roughly half of people outlive the average life expectancy, so a plan built to the average runs short for about half of the people who rely on it. Running every projection to 100 removes that problem. Where there is a couple, we model both of you and test what happens when one of you lives well beyond the other, because household spending falls by much less than half when one person dies, while pension income can fall by more. The result shows the age your money lasts to, or what is left at 100.
The default is 3% a year above inflation, a common working assumption for a mixed portfolio over a long period. Every figure is in today’s money, so inflation needs no separate guess. Cash is modelled as keeping pace with inflation and no more. The default is not a promise about any investment, and the two thousand reshuffled runs test what happens when returns arrive unevenly. If you want a different rate, tell us and we re-run the projection with your figure. Every assumption is printed in the plan.
Yes. The free projection takes eight figures and shows the age your money runs out in about two minutes. It works in today’s money at one growth rate and applies no tax, so its answer looks better than a full model would. The free Healthcheck measures your spending from your bank, read-only, in about two minutes. If both show a comfortable position, you have your answer at no cost. If not, the Financial Plan adds the tax, the two thousand runs and the stress tests.
Yes, at the same £1,500. Both incomes, both pensions and both retirement dates are modelled together, and the plan shows each person’s pensions, State Pension and tax. Your partner gets their own link with four short questions: when they want to stop work, what they want the plan to make possible, what worries them and anything they want the planner to know. Each of you has a short call with the planner on your own, and the session to go through the results is for both of you.
An hour with a planner on whether the Financial Plan suits your position.
A written plan: every year to age 100 with UK tax applied, each risk measured in years, and your next ninety days.