The cash flow reports are a picture of a client’s financial position between today and the end of their life expectancy. They cover the most common cash flows that effect retirement.

The cash flow reports are designed to be an alternate presentation of the client’s retirement, and to do it all on one page. The following Cash Flow Summary is the picture and the Cash Flow numbers are to support this illustration. This report is a stand-alone report and does not have numbers that are used to create other reports.

The Cash Flow Summary graph has two major elements, the cash flows and the level of expenses. The different colored bars represent cash flows that are occurring, and what accounts they are related to.  The line represents the expense level from the client’s current age through the remaining life expectancy. The numbers along the base of the graph are in terms of individual 1’s age.

Any level below the line represents cash that is being used to pay for expenses. The levels above the  line represent a surplus and may be reinvested. The goal of the client is to have the cash flow bars always above, or at the expenses line. If this is the case it is an excellent indication that they are looking at a financially successful retirement.

The cash flow numbers are designed to explain the cash flow graph.  This page is made up of Sources and Uses. The columns represent the bars on the summary graph above. The red numbers symbolize a use of funds and the black numbers signify a source of funds.

The red numbers in the Retire/Roth Accounts column are additions made by the client; this is the amount deposited into their accounts.  The black numbers in the same column represent cash outflows from those accounts that are used for the payment of living expenses and taxes. Interest earned on the account will always show up as a black number, or reduce the value of the red numbers.

All the numbers on this page are then subtotaled in the total sources column. Taxes are based off the earned income less deposits made into qualified plans multiplied by the appropriate tax rate. The resulting taxes are added to the amount of Living Expenses input, and adjusted for the desired inflation rate. This will create a surplus or shortage for the client. A shortage is a problem for the client and should be addressed. A surplus identifies an opportunity for the client to reinvest their money to prevent a shortage in the future. This reinvestment is not done automatically and the planner will need to add an asset that will account for pre-retirement surpluses.

Note: The numbers on this page only relate to the above graph and they do not relate to any other report output, even though some of the numbers from this report do match up to other numbers in other report pages. This is to insure consistency of numbers in the outputs, but the results are not used in other pages for calculation purposes.