for expert insights on the most pressing topics financial professionals are facing today.Learn More
Webinar: Making Money More Human: The Value of Emotional Intelligence in Financial Planning (1 CFP® CE Credit) on Thursday, October 7 from 2:00 - 3:00 p.m. ETRegister Now
The oldest living person in the world as of this writing, Kane Tanaka of Fukuoka, Japan, is over 116 years old. Born in 1903 (the same year the Wright brothers flew the first powered flight and the inaugural Tour de France was held), Tanaka was honored at a ceremony in 2019 with a certificate and box of chocolates. She opened the box and told journalists how many chocolates she planned to eat: “100.”
While few people live long enough to reach the post-century mark, many are living long past the traditional age of retirement. Cash flow planning, a technique that can help clients plan for retirement by charting inflows and outflows of cash, remains misunderstood. Wealth managers report their clients frequently underestimate spending by 25 percent—which can have major repercussions on their financial futures.
With cash flow planning, clients can better determine where their money went and where it will go to help fund their life goals. Cash flow planning can be used at any life stage: early accumulators, mid-career accumulators, pre-retirees, and retirees.
The eMoney budgeting tool provides daily updates on a client’s spending transactions through connections to their financial institutions. The advisor can see an accurate picture of a client’s spending that can be utilized in cash flow simulations and—crucially—can highlight areas where changes should be made.
Not many people anticipate living a full century-plus. But everyone can benefit from proper cash flow planning, outlining their financial future, and making the proper changes before it’s too late.