Your Life Plan
GWM’s Life Planning process is designed to give you a clear picture of your financial future.
Each plan is completely bespoke for the client in question and helps us and the client make informed decisions.
The value of having a Life Plan
A Life Plan can give a target for income and become a great motivator. It can also serve to show that there are already enough assets and income to satisfy your financial objectives, thus allowing all concerned to ‘ring-fence’ those assets/income so that you have peace of mind that your financial objectives are achievable and sustainable. Capital and income above this level can then be used differently for non-essential expenditure.
Starting your Life Plan
All planning relies on present facts together with assumptions about the future, matched against goals and aspirations. The Life Plan starts with a base plan, which helps ensure that normal living standards are sustainable. We then move on to the goals and aspirations, which could range from retirement, funding house purchase for children, buying a new car, and equally they could be positive cash flows such as sale of a business, downsizing property to release equity and so on. We call these items Events and they are crucial. They give the shape and direction to your Life Plan. At its simplest level, a Life Plan projects forwards all income and all expenditure, and will show whether you will run out of money. By building in Events, whether they are goals or inevitable circumstances, the Life Plan becomes personal and valuable, both as a planning device and a map to keep you on track.
Testing ‘what ifs’
One significant benefit of this process is the ability to build in ‘what if’ scenarios. This helps our clients assess options and identify opportunities such as whether retirement 5 years early is viable, whether they actually need to downsize property, and also to model the potential consequences of long-term care or the impact of a critical illness. The plan also lets us model different rates of investment return, different price escalations and also to model for the impact of a stock market crash. Sustainability can be achieved by balancing costs/outgoings, assets, specific financial goals, investment returns and tax planning.
Key elements of your Life Plan
The starting point is to capture the current situation – incomes, expenditures, assets and liabilities – in detail, together with the key milestones and events.