Explaining the sustainable spending chart | Timeline Help Centre

Summary

• The Sustainable Spending Chart visualises how much a client can sustainably spend over time.
• Each bar represents a historical scenario used to test the plan.
• Shows the maximum sustainable spending based on income, withdrawals, contributions, taxes, inflation, and returns.
• The red line indicates the worst-case scenario; the green line shows the best-case scenario.
• Enables advisors to stress test plans and define realistic spending levels.

Description

The Sustainable Spending Chart is a cornerstone feature in Timeline Planning for answering one of the most important client questions:

“How much can I spend without running out of money?”

Rather than relying on static assumptions, the chart uses historical scenario analysis to test a client’s financial plan against real-world economic conditions. Each bar represents a different historical period capturing variations in:

• Market returns
• Inflation
• Economic cycles

This transforms planning from a single projection into a distribution of outcomes, giving both advisor and client a far more robust understanding of risk.

How It Works

Once a plan is set up, Timeline’s calculation engine evaluates:

• Income streams
• Investment returns
• Contributions and withdrawals
• Taxes
• Inflation

Across multiple historical scenarios.

The output is the maximum sustainable spending level for each scenario, i.e., the highest level of spending that does not deplete the client’s assets prematurely.

Interpreting the Chart

• Bars (Scenarios):
  Each bar represents a historical test case and its corresponding sustainable spending level.
• Red Line (Worst Case):
  The lowest sustainable spending level across all scenarios. This is your risk floor.
• Green Line (Best Case):
  The highest sustainable spending level. This represents upside potential.

This range allows advisors to guide clients toward a spending level that balances:

• Confidence (not running out of money)
• Lifestyle (not underspending unnecessarily)

Why This Matters (Product Perspective)

From a Jobs to Be Done lens, clients aren’t asking for projections—they’re asking for certainty under uncertainty.

The Sustainable Spending Chart enables:

• Stress testing instead of guesswork
• Behavioural alignment (clients see the trade-offs clearly)
• Better decisions through visual distribution, not single-point estimates

It effectively shifts the conversation from "Here’s what might happen" to "Here’s what has happened historically and what that means for you".

Full video:

Description

Imagine you have a client named John who is nearing retirement age. John has worked hard his entire life and built up a significant nest egg, but he wants to ensure he keeps his savings. He comes to you to help create a sustainable spending plan for his retirement years.
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As a financial advisor, you know there are better ideas than simply guessing at a spending plan for John. Instead, you turn to the sustainable spending chart on Timeline Planning. This powerful tool allows you to test different scenarios and see what is truly sustainable for John's particular situation.

You start by inputting John's income, investments, planned spending, and contributions into the plan. The Timeline calculation engine then runs simulations of different scenarios, considering historical economic data like inflation and market fluctuations.

Using the sustainable spending chart, you can show John that you have done your homework and that his plan is sustainable at a certain level of spending. It also gives you a chance to think through with John how much he wants to spend in different life phases.

In addition, the chart can be downloaded as a PDF and added to your own reports, and the data can also be downloaded as a spreadsheet. It is also included in the auto-generated reports that you can create from timeline planning and can be custom branded.

In conclusion, the sustainable spending chart is a powerful tool that allows financial advisors to test different scenarios and see what is truly sustainable for their clients' particular situations. Providing a detailed and realistic look at what a client's retirement might look like helps them make informed decisions about their spending.

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