Skip to content
English
Sign in
Go to www.timelineapp.co
  • There are no suggestions because the search field is empty.

Understanding Planned Spending, Income Sources, and Withdrawals in Timeline Planning

Summary

  • Timeline Planning allows you to set up general planned spending and one-off expense goals in net terms.

  • Income sources are set up in gross terms and then converted to net terms by Timeline Planning.

  • Withdrawals are made from account sources only after income sources have been used up.

Introduction​

Navigating the financial landscape of retirement can be complex. Timeline Planning simplifies this by allowing you to set up planned spending, income sources, and withdrawals. This article aims to clarify how each of these elements works within the platform, helping you make more informed financial decisions.

How Planned Spending Works

In Timeline Planning, you can set up general planned spending or one-off expense goals. These values should be entered in net terms. Whether it's a recurring expense during retirement or a future one-time expenditure, Timeline Planning allows you to set these up conveniently.

How Income Sources Work

While planned spending is set up in net terms, income sources are initially set up in gross terms. Timeline Planning then converts these gross income sources into net terms for you. This ensures that the income you're counting on is accurately reflected in your financial plan.

How Withdrawals Work​

Withdrawals come into play when net income sources are not sufficient to cover planned spending. In such cases, the deficit is met by making withdrawals from account sources, with advisers able to define specific withdrawals from a chosen account for a set amount and time period, overriding the default withdrawal order. The cash flow chart allows advisers to visualise how much is being withdrawn from various accounts to meet spending needs, and the overall account withdrawal order can be configured on the Settings page.

​Example​

Let’s say you have planned spending of £25,000 per year and a state pension providing an annual income of £20,000. Timeline Planning first converts this gross income into net terms, which in this example would be £18,514. The remaining amount needed to meet your planned spending, £6,486, would then be withdrawn from your first investment account according to the 'Account withdrawal order'. If you need to make a specific withdrawal, you can define a targeted amount and time period from a particular account, overriding the default withdrawal order for that portion.​

Conclusion​

Understanding how planned spending, income sources, and withdrawals work in Timeline Planning is crucial for effective financial planning. By configuring these elements accurately and using the Specific Withdrawals feature to adjust where needed, you can ensure that your financial plan is aligned with your goals and adaptable to changing circumstances.