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Modeling Decumulation Strategies in AdviserGo

This guide walks through practical features in AdviserGo that can help when modeling decumulation strategies for clients in retirement.

It includes:

• Good practice guidance for cash flow modeling (informed by the FCA thematic review of retirement income advice)
• AdviserGo’s default approach to meeting expenses (liquidation order)
• How to build a planned decumulation strategy in a What-If scenario using Planned Withdrawals to override default behavior
• How to review results using charts and plan comparisons

Starting Point: Base Plan and Timeline

This example begins on the Timeline in a base plan named “Current Position – April 2025.” It represents the clients’ situation today, having just retired at age 60 (the plan’s retirement event).

The Timeline helps you clearly show clients what they are planning for and when.

Longevity Stress Testing

When discussing decumulation, FCA guidance suggests stress testing for longevity.

In this example, mortality is modeled to age 100. However, clients may not live that long, so life expectancy assumptions can also be supported with additional context. For instance, one approach is using the ONS life expectancy calculator to identify “one in four” longevity ages, which can be added to the Timeline as reference points and discussion aids.

Modeling Changing Retirement Spending Over Time

FCA guidance also suggests considering how spending patterns may change through retirement.

To demonstrate this, the plan models two stages of retirement spending:

• Early retirement (higher discretionary spending)
• Later life (from age 80) (lower discretionary spending)

Age 80 is commonly used as a point where discretionary spending often reduces. If long-term care becomes relevant later, an additional stage (for example, “Long-Term Care”) can be added to reflect increased expenditure.

Categorizing Spending: Essential, Discretionary, and Luxury

Another recommendation is to separate retirement spending into different categories and prioritize them.

In this plan, three Retirement Goals are used to model and visually track spending (goals are expenses that can be tracked and displayed clearly).

1) Essential Spending Goal

This goal is intended to cover essentials such as food, utilities, council tax, etc.

Example setup:

• Named clearly (e.g., “Essential Spending”)
• Jointly owned
• Entered as £3,000 per month (ensure frequency is set correctly)
• Kept as a top priority
• Inflation applied (e.g., 2.5% per annum, based on the plan’s inflation assumption)
• Timing set from plan start through mortality (default retirement goal timing)

2) Discretionary Spending Goal

This goal covers “nicer” spending such as leisure and eating out.

Example setup:

• Prioritized below essential spending
• Timing set from retirement through mortality
• A “step down” is applied later in retirement to reduce spending (for example, reducing to 50% at a “slowdown” event)
• Inflation is still applied to maintain purchasing power

3) Luxury Spending Goal (Holidays)

This goal models luxury travel spending in early retirement.

Example setup:

• £18,000 per year
• Positioned lower in the priority list to reflect its flexibility
• Timing ends around age 80, when travel may reduce

Reviewing the Starting Position in the Dashboard

From the Dashboard, the Assets by Type pie chart can help clients visualize where their wealth is held.

Example observations:

• A significant portion of wealth may be tied up in a property (non-liquid and not used by the software to fund retirement spending)
  • To access property wealth, you would need to model downsizing or equity release
• Cash holdings can be ring-fenced using withdrawal limits so the software does not spend them (interest can still roll up)
• Remaining wealth may be held in investments and pensions

Reviewing Assets in More Detail

Expanding Dashboard sections can show the full asset structure, such as:

• Cash and savings accounts
• ISAs
• Unwrapped investments (sometimes used as ISA “feeders”)
• Bonds
• Pensions (uncrystallised money purchase pensions)

For money purchase pensions, AdviserGo may automatically create linked drawdown accounts, which can be used once funds are crystallised.

State pensions can be modeled as guaranteed income beginning at the appropriate age (e.g., age 67 in this example).

Plan Settings: Long-Term Assumptions

FCA guidance notes that assumptions should be reasonable and credible. AdviserGo allows these to be set per plan, including:

• Inflation / CPI
• Cash growth rate
• Investment growth rate
• Fee assumptions

These assumptions can be set at the client plan level and may also be managed at a broader subscription level.

AdviserGo’s Default Decumulation Approach (Liquidation Order)

By default, AdviserGo funds annual expenses in this order:

1. Regular income (if available)
2. One-off inflows (if present that year)
3. Available liquid cash (unless restricted via withdrawal limits)
4. Invested assets, following the default liquidation order:

• Taxable (unwrapped) investments first
• Tax-deferred assets next (typically pensions and bonds)
• Tax-free assets last (typically ISAs)

Important: This is not intended to be an advice strategy—it is the software’s default funding logic. In practice, advisers often want to override this by using Planned Withdrawals.

Viewing Plan Results in Let’s See

On the Let’s See screen (Cash Flow chart), each bar represents a year of the plan.

• Blue bars generally indicate a positive cash flow position (sufficient income/assets to meet spending needs)
• The Need line represents total expenditure requirements
• A separate line may show basic expenditure (including taxes and expenses modeled as basic)

The gap between basic and total need can help illustrate discretionary spending, which may drop later in life (such as at age 80).

Understanding Funding Sources With Details

Turning on chart Details allows you to view how expenses are funded using default logic.

Common funding sources include:

• Guaranteed income (e.g., state pension)
• Withdrawals from taxable investments
• Withdrawals from pensions (often shown distinctly)

When pensions are used:

• AdviserGo may apply a default “recurring off plus” approach
• It may draw from the first person’s pension first, then the second
• By default, 25% of pension withdrawals are treated as tax-free, with the remainder taxable (subject to the plan’s tax logic)

This may not be the most tax-efficient approach, which is why planned strategies are often modeled in a What-If scenario.

Switching to Assets, Expenses, and Taxes Charts

Assets Chart

The Assets chart can be used to show how liquid assets decumulate over time.

You can also hide property to focus on liquid assets only. Hovering over bars displays projected values.

Real Money Mode

By default, charts are shown in nominal terms. You can switch to Real Money Mode to strip out inflation (based on the CPI assumption) and view values in “today’s money.”

This helps demonstrate the real impact of:

• Cash returns below inflation (loss of real value)
• Net investment growth relative to inflation (real return)

Expenses Chart

This chart shows where money is going, including:

• Taxes
• Basic spending
• Discretionary spending
• Luxury spending (such as holidays ending at age 80)

Taxes Chart

The Taxes chart helps identify the timing and level of tax payments. In this example, taxes appear front-loaded due to early pension withdrawals—suggesting there may be an opportunity to improve tax efficiency with a planned strategy.

Creating a Planned Decumulation Strategy (What-If Plan)

To create a What-If scenario:

1. Select What If at the top of the screen
2. Name the scenario (e.g., “Planned Decumulation Strategy”)
3. Create the plan

This allows you to make changes without affecting the base plan and compare results side-by-side.

Overriding Liquidation Order With Planned Withdrawals

To create Planned Withdrawals:

1. Click the Plus (+) button
2. Go to Plan Actions
3. Select Planned Withdrawals

Planned Withdrawals allow you to control:

• Which account money is drawn from
• How much is taken
• When withdrawals start and end
• The strategy used (especially for pensions)

Example: Using a Pension to Maximize Personal Allowance

If a client has little/no taxable income before state pension begins, planned withdrawals can be used to deliberately take taxable pension income up to the personal allowance (with tax-free cash included depending on strategy).

You can verify the result in:

• Year View (Income, Pensions, and tax breakdown)
• Chart details (to see where funds are coming from)

Example: Phasing Tax-Free Cash

A planned withdrawal can also be used to phase tax-free cash over time. AdviserGo may interpret the strategy such that it crystallises an amount to deliver the desired level of tax-free cash and moves the remainder into drawdown.

Example: Drawdown Withdrawals From Crystallised Funds

Where drawdown funds exist, planned withdrawals can be taken directly from crystallised accounts, often to align withdrawals with tax planning goals.

Planned Withdrawals From ISAs and Bonds

ISAs

Planned ISA withdrawals can be modeled to generate tax-free income.

If selecting multiple ISA accounts, review the distribution setting. The default may withdraw the same amount from each account.

Bonds

Bond withdrawals can be modeled in several ways, including:

• Fixed amount
• Percentage
• Maximum without penalty (where applicable, including use of tax-deferred allowances)

Avoiding Surplus Income

Once state pensions begin, you may see years where total income exceeds the need line, creating surplus income.

By default, AdviserGo assumes surplus regular income is spent and removed from the plan. In reality, most clients would adjust withdrawals to avoid taking more than needed.

To correct surplus income:

• Add steps to planned withdrawals
• Reduce taxable pension withdrawals once state pension begins (because state pension uses personal allowance and may increase tax on additional withdrawals)

Comparing Strategies: Base Plan vs Planned Strategy

To evaluate impact:

1. Go to Let’s See
2. Select Compare Plans

Compare:

• Cash flow sustainability
• Asset values across the plan (hover to view projected values)
• Taxes over time

When comparing taxes, note that chart scales may differ. Use chart options (e.g., Zoom) to align scales for a true visual comparison.

In the example, the planned strategy:

• Reduces tax in earlier years
• Keeps more assets invested
• Increases compounding over time
• Potentially improves the ability to fund goals longer and/or increase legacy outcomes

Need Help? Request Support

If you have questions about modeling:

1. Click the client name (top right)
2. Select Request Support
3. Enter your message and include your phone number if helpful

This sends a request to the Voyant Support team.

If you want, I can also create:

• A shorter Quick Start version (for users who want the basics only)
• A step-by-step “click path” version for Planned Withdrawals
• A glossary for pension strategies (e.g., “off plus,” “flexi,” crystallised vs uncrystallised)