In this video, we walk you through planning your retirement income with Financial Mappers.
Welcome to Financial Mappers
In this video, we show how someone — even someone with limited mathematical skills — can explore strategies for retirement, to drawdown retirement assets that produces a layered income stream for retirement..
So, using the built in Retirement Sample Plan, let’s follow an example investor who wishes to retire at age 65, with $1.6m in investments and superannuation.
If you expect any one-off payments, such as an inheritance, add these now, along with the year received.
This particular plan includes investment properties. So we’ll include budgeted renovation costs for both Building Improvements and Refurbishments in Year 5.
You can also include when you plan to sell the property. In this plan, we’ll want to sell the property in Year 10, and we can see the estimated profit is $450,000.
Let’s re-invest this by purchasing Bonds.
It’s planned to invest $100,000 of the funds from the property sale in a 10-Year Bond … … We also want to reinvest the bond at the end of Year 20.
Other accounts you can use in your plan include the Cash Account … … which in this example has no allocation to drawdown, as it will be kept for emergencies … …
and the Share Portfolio … … which will be drawn down over the first 15 years.
Another account with a Drawdown is our Managed Fund. We’ve set the dividends to be transferred to the Bank Account, and the drawdown of capital starts in Year 10. On the graph, you can quickly see that by allocating a 30-year Drawdown period, there will still be a balance at the end of the plan.
In the Superannuation Account, you can change the investment profile to match the risk profile your comfortable with … … As you setup the Drawdown of the account, the amount can be calculated by percentage, or over a time period. Any lump sums can also be converted to an annuity.
The superannuation investment profile will be changed to match risk profile of the investor.
In the superannuation account, the drawdown can be calculated by percentages or time period.
The Lump Sum can also be converted to an annuity.
Now, it’s time to set up the Retirement Income Drawdown.
Use the Drawdown Allocation table to nominate your spending for each year.
Scroll down, and you can see the annual income comes firstly from Superannuation, followed by investment income and investment capital.
Then hover over the second graph, and you can see which assets have funded the retirement income. The data for both graphs can also be displayed in Present and Future Value.
Financial Mappers automatically transfers the planned income stream to the Budget, where expenditure is planned. Before proceeding to the Budget, you can add any additional pensions not already included in your superannuation accounts.
The investor nominates his spending for each year.
His annual income comes firstly from superannuation, followed by investment income and investment capital.
The second graph shows which assets have funded the Retirement Income.
Results can be displayed in both Present and Future Value.
The planned income stream is transferred to the Budget. , where expenditure can also be planned.
Any anticipated pensions, other than superannuation, can be included in the Budget income.
You can also review the Transaction account, which transfers the drawdown amounts to the personal budget.
This is where tax due on investments, and personal incomes tax, is allocated.
From the Transaction Account, the Drawdown Amount is transferred to the Personal Budget.
Tax due on investments is allocated in the Transaction Account and personal income tax from the Budget.
And finally, we’re ready to review Retirement Drawdown breakdown in the Personal Budget.
The budget shows a year-by-year breakdown of the sources of income for personal expenditure … … income tax due … … and any savings from salary. For thorough personal planning, Financial Mappers includes up to 10 categories of Living Expenses. Personal Loans and Credit Card Payments can also be accounted for here.
When you’re finished, you can use the Summary Data Report for a detailed review of the financial plan … … To really understand the value of your investments, spend some time exploring the graphs in both Future and Present Value, and in graphic and data formats.
And that’s it, you’ve planned a layered income drawdown plan for your retirement. Be sure to check out our other videos, and financialmappers.com.au.
The budget displays the source of income for personal expenditure.
It also displays income tax due and any savings from salary.
A detailed list of Living Expenses using 10 categories can be created.
Personal Loans and Credit Card payments are accounted for in the Budget.
The Summary Data gives a detailed review of the financial plan in either Future or Present Value and in graphic or data format.