EvolveMyRetirement® helps you model a personal financial plan, illustrating how your cash flow could evolve over time. Once you’ve completed the process of inputting the income, outgoings, assets and liabilities of each plan member, EvolveMyRetirement® uses a combination of Genetic Algorithm and Monte Carlo Simulation to identify additional options based on your inputs.
The modelled strategy represents that part of your plan that's under your control. A key element of the strategy is discretionary spending. Different spending levels can lead to different projected outcomes. Other elements of the strategy illustrate how different choices could affect spending and legacy outcomes. For example, these include approaches the model uses for pension contributions before retirement, and for pension drawdown after retirement. You can manually adjust the strategy settings to explore alternative outcomes.
Once you have a modelled strategy, it’s time to view your results. Remember that you can always go back and refine your personal financial plan at any time.
The EvolveMyRetirement® results dashboard will show you the combined net worth, annual income and annual spending of the members on the financial plan. As well as showing your estimated discretionary spending based on your inputs, the results will show how likely you are to run out of money in your lifetime, and the chances of when this might happen.
The dashboard indicates possible timelines for insolvency, but it distinguishes between running out of cash and running out of all saleable assets. In practice, avoiding insolvency in real life may involve significant lifestyle changes, such as selling assets you hadn't originally intended.
The results will also show an estimated range of figures for how much inheritance you may be able to leave behind after you’re gone.
The dashboard lets you explore how your plan behaves under different scenarios. It gives you the choice to run an average scenario (one that makes balanced estimates about variables like life expectancy and investment returns) or a random scenario.
A random scenario will look different each time, just as each scenario in a Monte Carlo Simulation is different.
All results and scenarios should be treated only as an illustration and should not be relied upon as predictions.
After you've created a strategy, whether using the built-in automated process or by editing it manually, it's often useful to see what the effect small changes might have on the results. You could of course keep on editing the strategy and checking the results, but that's cumbersome. Instead, the results dashboard lets you run a sensitivity analysis on any chosen strategy setting, as well as on your planning assumptions and on certain other variables. The outcome of a sensitivity analysis is displayed graphically.
Within the EvolveMyRetirement® tool, there are various adjustments you can explore to see how they affect the modelled outcomes.
You can explore how changes to your inputs, such as postponing retirement or adjusting spending levels, might affect the projected outcomes.
You should also consider whether your aversion to risk and the importance of leaving an inheritance are recorded correctly in your plan. The automated process ranks modelled strategies differently based on these settings.
If your personal financial plan results are still concerning to you, we suggest consulting an independent financial adviser, and sharing your plan with them. A financial adviser can review your plan and its assumptions, and provide regulated advice tailored to your circumstances.
For additional help, please visit our Support section.
