Often one of the biggest benefits of a bespoke financial plan is that it allows you to devise a blueprint to follow, with your goals placed at the centre. It’s a strategy that could help you focus on what you want to achieve in life and make working with a professional even more valuable to you.

Over the last few months, you’ve read about how a financial plan could help you grow your wealth and the value of non-tangible benefits, like feeling more confident about your finances. Now, read on to discover how financial planning might help you align your decisions with your aspirations.

Your goals are the focus of your financial plan 

While you might think of financial planning as being about figures and growing your wealth, it goes far beyond this. Financial planning aims to help you reach your goals, whether you want to retire early, have the money to book holidays to exciting destinations or be in a position to offer support to your family. 

To achieve this aim, financial planning starts by understanding what your goals are. Having a clear idea about what your aspirations are could allow you to make decisions that enable you to turn them into a reality. So, defining what success means for you is often crucial. 

For example, you might start by saying your family is a priority and you want to offer them support. But what does this look like? Do you want to offer financial support, such as a deposit when they’re buying a home, or do you want to have greater freedom so you can look after your grandchildren?

As financial planners, we can help you define your life goals and understand what’s possible. 

Cashflow modelling could help you visualise the impact of your decisions 

One of the challenges of setting out how to reach your long-term goals is that it can be difficult to know whether the decisions you’re making will support or harm them.

Cashflow modelling can be used as an invaluable tool to help you visualise the impact decisions might have on your financial future and, so, on your goals. 

When using cashflow modelling you input data like the value of your assets now. You can then model how different decisions will affect the outcome. It’s a way of understanding how the decisions you make now could affect goals that are years away. 

If your goal is to retire early, you might update the information used for cashflow modelling to answer questions like:

• Could I afford to retire five years earlier?
• If I retire when I’m 55, what income could my pension sustainably provide?
• Could I take a tax-free lump sum from my pension when I first retire and still be financially secure? 
• How would increasing or decreasing my pension contributions affect the value of my pension pot at retirement?

Armed with the information cashflow modelling provides, you’re often in a better position to make financial decisions that reflect your aspirations.

A financial plan may keep your goals on track as your circumstances change 

You might set out clear goals now, but as your circumstances and desires change, they may not be the same in five years.

A family illness might mean you decide to step away from work sooner than you expected to support them. Or an unexpected inheritance may mean you’re able to secure goals you previously thought were out of reach. 

By having an ongoing relationship with a financial planner and regular reviews, which will include reassessing your aspirations, we can help you adjust your plan, so it continues to suit your needs. 

It’s not just your goals that could lead to change either.

You might come across an investment opportunity and decide you want to divert some of the money to this. A financial plan could help you assess if it’s the right decision for you and how it might affect other parts of your plan.

For instance, could choosing a higher-risk investment rather than contributing to your pension place your comfortable retirement at risk? Or are you in a position where you can invest and still feel confident about your retirement?

By modelling opportunities or obstacles using cashflow modelling, working with a financial planner could help you understand the impact of making changes to your plans as opportunities arise.

Contact us to talk about how a financial plan could be valuable for you

As you’ve read over the last few months, a tailored financial plan could provide financial and non-financial benefits. If you’d like to explore how a financial plan could add value to your life, please contact us. 

In an initial meeting, we can discuss how we could work together to help you reach your goals. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

The Financial Conduct Authority does not regulate cashflow modelling.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited.  08/07/2024