The Financial Assets Chart examines how a client’s liquid and fixed assets will change over time. This chart focuses on all liquid and fixed assets and displays the required retirement assets as a blue line. When the clients’ liquid assets (Cash Investments and Retirement investments) are above the blue line then the clients have enough liquid assets to fund their retirement goals. If liquid assets are below the blue line then the clients are going to be short of funding their retirement goals and may need to liquidate fixed assets to fund their goals.
In the above image, we can see that the clients’ total liquid assets (Cash Investments and Retirement investments) are slightly greater than their Required Retirement Assets (blue line), any assets over the blue line are not needed to fund retirement lifestyle. If the Required Retirement Assets line lands near the top of the Investment Real Estate at retirement, then assuming the value of the investment real estate holds over time, liquidation may be an effective option for solving income deficiencies.
Financial Assets Breakdown
- Retirement Investments – Total value of all Client and Spouse RRSP/RRIF and Locked-In Plans.
- Cash Investments – Total value of all Client, Spouse, and Joint Non-Registered and TFSA Investments.
- Corporate Investments – Value of Corporate Investments & Securities.
- Corporate Fixed Assets – Total value of Corporate Real Estate and Operations & Good Will.
- Investment Real Estate – Total value of all Recreational and Investment Real Estate.
- Principal Residence – Value of the client’s Principal Residence.
- Other Assets – The total value of all Other Assets.
- Estate Value – Equal to the total after-tax value of all assets minus any remaining liabilities. This includes Lifestyle Line of Credit.
- Estate Tax – Equal to the outstanding tax liability on all assets assuming full liquidation in any year.
- Total Net Assets – Equal to the total value of all assets minus any remaining liabilities. This includes Lifestyle Line of Credit but not outstanding tax liabilities on any assets.
- Required Retirement Assets – This is a calculated value based on the client’s retirement goals the timeline for retirement. This is meant to give you an idea of the liquid assets required to fund the future Retirement Income Needs. This helps to determine whether a client has sufficient liquidity to fund their goals in retirement.
- Client Life Expectancy – The client’s statistical life expectancy at retirement. This is auto-calculated based on the client’s sex, birth date and age of retirement.
- Spouse Life Expectancy – The spouse’s statistical life expectancy at retirement but is shown in the chart based on the client’s age. This is auto-calculated based on the spouse’s sex, birth date and age of retirement.
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