Elmer Fudd is a 51 year old male who wishes to take retirement at the earliest possible opportunity. Originally, Mr Fudd was content with retiring as soon as his State Pension began. However, after many years of work he now wishes to retire much earlier than originally planned.

He has therefore asked you to provide advice on when he will realistically be able to retire. He understands that retiring immediately is not possible and has therefore indicated that 60 is a desired age. However, he wishes to be comfortable in retirement and has stressed he wishes to possess as few financial worries as possible.

State Pension Age calculator

The State Pension Age calculator enables you to work out when a client will receive their State Pension. Therefore by utilising the tool we were able to calculate that Mr Fudd will receive his State Pension at age 67.

See Report - State Pension Age

Data Capture Form

A key feature within the Advanced Cash Flow Modeller is that it enables you to email a Data Capture Form to a client for it to be completed, sent back, and automatically imported into a cash flow. Therefore upon receiving a completed Data Capture Form from Mr. Fudd we were able to import all of his incomes and expenditures into a cash flow in a simple and effective manner.

Elmer Fudd’s current financial situation includes £3,000 in a current account, £10,000 in a cash savings account, a £17,000 ISA and a £220,000 company pension. His net monthly salary totals £3,500 and this will remain until his anticipated retirement age. In terms of expenditure, he is current spending £2,000 per month on living expenses (which does not include any mortgage repayments as this was completed some years previous) and contributes £300 per month towards his pension. However, his total expenditure is predicted to increase within retirement due to frequent travel plans. According to the Data Capture Form completed by Mr. Fudd, total expenditure will total £18,650 per year in retirement until age 85 and then decreased to £14,400 thereafter.

Advanced Cash Flow Modeller

The initial forecast indicated that Mr. Fudd will be able to retire at his desired retirement age of 60. If he decides to do so, Mr. Fudd will be able to maintain his current standard of living and be comfortable within retirement.

See Report - Retire at 60

However, a key aspect of Elmer Fudd’s enquiry was that although 60 is a desirable age, he wishes to take retirement at the earliest possible opportunity. Therefore by utilising the clone feature within the Advanced Cash Flow we were able to clone the previous cash flow to create a new one. Hence, we can simply create a replica forecast with a different retirement age by adjusting the retirement age using the interactive slider tool under the assumptions tab.

We therefore set Mr. Fudd’s retirement age to 58 to see the effects of retiring at this age. However, the calculation indicated that taking retirement at age 58 is not a realistic option. As the report depicts, he will run out of money at age 91.

See Report - Retire at 58

As such, a third report was created with retirement age set at 59. This however yielded a similar result to the previous forecast. As the report demonstrates, Mr. Fudd will run out of money at age 98. This however can be a realistic option for many clients. With certain tweaks to expenditure Mr. Fudd will realistically be able to take retirement at age 59. However, as per his requests, he wishes to be comfortable within retirement and therefore this option is not suitable for the client.

See Report - Retire at 59

Therefore based upon the previous cash flows, it can be suggested that Mr Fudd can either retire at age 60 and be comfortable or retire at 59 and alter his expenditure levels. However, it was noticed that he possessed a significant income surplus prior to retirement. Therefore by cloning the previous cash flow forecast and increasing Mr. Fudd’s contribution to his pension plan, which he can afford due to the income surplus, we were able to identify a way for Mr. Fudd to retire at 59 and be comfortable in retirement. By increasing his contribution from £300 per month to £600 per month using the contributions and withdrawals tab Mr. Fudd is able to retire a year earlier than desired. However, any less contribution will not yield the same positive results.

See Report - Increase contributions

An additional feature within the Advanced Cash Flow Modeller is that it enables you to compile multiple reports to create one complete report. This can therefore enable you to present a comprehensive report to your client, thus easily explaining each scenario and subsequent advice. With regards to Mr. Fudd, the report details his overall scenario and presents three viable options in terms of when he will be able to retire. In essence, Mr Fudd can either retire at 60 and maintain his current and anticipated standard of living, or retire at 59 and alter certain aspects such as living expenses or contributions. Whichever option he prefers, it is also advisable that an annual review is undertaken to ensure that Mr. Fudd remains on target to reach his desired goal.

See Report - Complete

Case Studies

CashCalc aims to remove pain points for financial planners, read about where the industry is going and how CashCalc is constantly developing our online suite of financial planning tools.

Contact us

Categories