Mike Jordan , founder and CEO of Jordan Financial Management in Sutton Coldfield, has been providing trusted financial advice to Midlanders for more than 30 years.

Now, Mike is urging people to use cashflow modelling to give a clear picture of their future retirement income.

Mike said: “Having a reliable retirement income not only gives you a sense of security and the ability to create your ideal retirement lifestyle, it also allows you to achieve bucket-list goals.

“But working out what your retirement income might look like is often daunting and complex.

“A financial planner can help mitigate this uncertainty and help you look forward to the future using cashflow modelling.”

Cashflow modelling begins with inputting data into specialised software about your current financial position, including your income, expenses, assets and liabilities.

Your financial planner can then add in variables which may affect future finances, such as investment performance, inflation, and your projected future income.

The software will create a long-term projection of your finances based on your desired retirement age and life expectancy. Your financial planner can tweak the values to show you how your income will be affected in different scenarios.

Mike said: “Factoring in variables is really important, as it allows you to figure out how your plans could be impacted by external factors out of your control.

“It’s also important to factor in life expectancy, as with the numbers ever increasing, you may find your retirement fund needs to cover a longer period of time than you expected.”

However, for cashflow modelling to be a valuable tool, Mike stresses that it must be used properly.

He explained: “A cashflow model is only as good as the data that’s input, and has to be updated regularly to be a useful planning tool.

“There’s also a risk that people may get a false sense of security from its projections, when at the end of the day, it is only a model.

“To make sure you get the most out of your cashflow model and understand its implications and shortcomings, it requires professional oversight. Your financial planner can explain and tweak the model, while also offering critical human expertise and guidance that can’t be replaced by a machine.

“If you have any questions about cashflow modelling and how it could help you gain clarity on your retirement income, please get in touch – we’d love to hear from you.”