Retirement planning tools allow you to work out if you have saved enough to achieve your financial goals. They range in complexity and cost from simple, free spreadsheets to expensive apps used by financial planners. In this video we explain how they work, what they provide to you, and look at some free and paid-for examples for UK, US, Australian and Canadian investors.
There’s an explainer called “Creating A Financial Plan With Voyant” which you can find in the content spreadsheet in the tab “Video Explainers”
That is specifically about using Voyant but should give an idea of how retirement planning tools help you
Here I’m going to start with why they’re useful then list some resources
The purpose of cash flow modelling is to have a rough idea of
How much will you have in retirement?
What return you will need on your investments to meet your financial goals?
How likely are you to meet those goals?
How much do you need to save to meet your goals?
When will you be able to retire comfortably?
To build your plan you need the following
Your planned retirement age
Savings – current and how much you will save on an ongoing basis & into what investments
Investments – what are they & how much in each
Pensions – defined benefit or defined contribution, inflation-linked
Debts e.g. mortgage
Property value & income
Known ongoing expenditure (food, holidays, home maintenance, car maintenance…)
Known upcoming expenditure
Children university fees, wedding expenses, car purchase
Once you have these the cashflow modelling tool will
Project your income & savings into the future
Show how long it will take to deplete your savings given your assumptions
Probabilities of meeting your goals
Uncertainty is a given when predicting the future
What will inflation be?
What will equity returns be?
For UK investors
Tideway Wealth’s calculator https://www.finalsalarytransfer.com/p/148/drawdown-calculator
Hargreaves Lansdown Drawdown Calculator https://www.hl.co.uk/retirement/drawdown/calculator
For US investors
Vanguard’s Nest Egg Calculator https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf
Paid for apps, but these are UK-specific:
Taxes, state pensions and investment choices vary by country so there are calculators tailored for each region
In the US this review of retirement apps is pretty good from “the balance”
In Australia there’s
This calculator from the government https://moneysmart.gov.au/retirement-income/retirement-planner
This calculator from Australian Super https://www.australiansuper.com/tools-and-advice/calculators
The government has this calculator https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html
There’s a simple calculator from WealthSimple https://www.wealthsimple.com/en-ca/tool/retirement-calculator
Another planning tool which helps your choice of what to buy is Portfolio Charts and to see how that works my video on building a Perpetual Portfolio called Early Retirement – Perpetual Portfolio Investment Strategies