Anyone had a Timeline app report to use for retirement planning?

GazzaBloom

Do any of the advisors here use Timeline for retirement planning? Or has anyone had a report produced from the program?

what are your thoughts on it?

https://www.timelineapp.co

BritishInvestor

It complements a cashflow tool (such as Voyant), with the cashflow tool typically used for building out the financial plan, creating "what-if" scenarios and optimising lifetime taxation and Timeline creating a sustainable withdrawal strategy.

Happy to answer any questions you have.

GazzaBloom

Thanks. I've got a report based on my current portfolio, planned contributions and retirement date and i was a little surprised that my own plan seemed to be pretty solid with Timeline suggesting I could actually drawdown a little more that I thought.

That worries me as either I'm quite smart (I don't think I am), or the software is buggy!

Timeline shows the planned drawdown on the Cashflow chart but the tax side isn't very transparent nor is the inflation, I have to assume the tax/inflation calcs are done in the background and are correct as the Cashflow shows drawdown in today's money all the way through to the end and doesn't show the inflation.

I've always been a bit sceptical of these kind of tools as they are purely based on algorithms but I have checked and rechecked the inputs and all looks OK.

So, I take some confidence fro the report I have as it seems to verify my own spreadsheet cash-flow plan.

dunstonh

Timeline can calculate sustainability using Monte Carlo scenarios or the last 107 years markets history.   It can also factor in different ways of looking at inflation.    So, it can depend on the assumptions and method used.  Switching between Monte Carlo and Market history can change sustainability. As can unticking inflation increases or setting Guyton inflation methods or others.

GazzaBloom

OK thanks gents

BritishInvestor

GazzaBloom said:

Thanks. I've got a report based on my current portfolio, planned contributions and retirement date and i was a little surprised that my own plan seemed to be pretty solid with Timeline suggesting I could actually drawdown a little more that I thought.

That worries me as either I'm quite smart (I don't think I am), or the software is buggy!

Timeline shows the planned drawdown on the Cashflow chart but the tax side isn't very transparent nor is the inflation, I have to assume the tax/inflation calcs are done in the background and are correct as the Cashflow shows drawdown in today's money all the way through to the end and doesn't show the inflation.

I've always been a bit sceptical of these kind of tools as they are purely based on algorithms but I have checked and rechecked the inputs and all looks OK.

So, I take some confidence fro the report I have as it seems to verify my own spreadsheet cash-flow plan.

Can I check if this is something you created yourself or got someone to create for you (my understanding is that it's only available to advisers)? If it's the former you can dig down some more to ensure you understand the workings, if the latter you can ask for some clarification

Regarding transparency:
Tax: Up until very recently I would've agreed with you as it was hard to see under the bonnet (which is why a decent cashflow  tool was the preferred option), but tax breakdown has just been introduced so you can see on a year by year basis what tax is being paid (I haven't looked at this yet).






Inflation: As dunstonh points out, it's worth checking the inflation and withdrawal rules to determine the exact rules that are being applied. There is an income chart which I find useful (as you can see changes in real income) but I'm not sure if that is still widely avaialable

It's quite a complex tool and easy to make mistakes, so I always start with a 50/50, zero fee, 30 year retirement horizon, ensure the success rate and SWR are as expected, and then adjust one parameter at a time to minimise chances of error.

Assuming all the above is correct, and there are reasonable assumptions around fees and longevity (typical Timeline plans run to ~99 for a couple at age ~60 if you use the inbuilt ONS data) then you should be OK.

I think you are right to question tools until you are 100% comfortable with the outputs. 

GazzaBloom

I have accessed the free trial myself and built my own timeline. Yes I've just seen the new tax update, the tax numbers look a little strange so I'm not sure what assumptions are being made, my intention is to take 25% tax free/75% taxable through drawdown on a monthly basis. The accounts portfolio is set exactly as I have it set now and plan to keep invested the same, contributions up to retirement are set with no inflation as I have calculated what I plan to pay in to various accounts quite precisely (ie max salary sacrifice up to the £40K tax limit)

I've got guardrails set with the default 20% +/- SWR and adjust drawdown +/-10%

Inflation is set to Inflation Adjusted

I have checked and rechecked all inputs, switched from Historical to Monte Carlo, longevity is set to the default 100 years old and I get a 94% success rate. 

One anomaly I can't figure out is that I added an annual goal of a £4K holiday per year and get 94% success rate but when I change it to every 2 years the success rate drops to 84%. Strange!

BritishInvestor

GazzaBloom said:

I have accessed the free trial myself and built my own timeline. Yes I've just seen the new tax update, the tax numbers look a little strange so I'm not sure what assumptions are being made, my intention is to take 25% tax free/75% taxable through drawdown on a monthly basis. The accounts portfolio is set exactly as I have it set now and plan to keep invested the same, contributions up to retirement are set with no inflation as I have calculated what I plan to pay in to various accounts quite precisely (ie max salary sacrifice up to the £40K tax limit)

I've got guardrails set with the default 20% +/- SWR and adjust drawdown +/-10%

Inflation is set to Inflation Adjusted

I have checked and rechecked all inputs, switched from Historical to Monte Carlo, longevity is set to the default 100 years old and I get a 94% success rate. 

One anomaly I can't figure out is that I added an annual goal of a £4K holiday per year and get 94% success rate but when I change it to every 2 years the success rate drops to 84%. Strange!

"I've got guardrails set with the default 20% +/- SWR and adjust drawdown +/-10%"

How does your spreadsheet compare if you turn off guardrails? 

"I get a 94% success rate."

A failure is a simulation that runs out of money (6% failure). A scenario that has had to take large real reductions in income might be considered a failure by you (i.e.it's not something that you would be prepared to accept), yet Timeline would show it as a success.

"One anomaly I can't figure out is that I added an annual goal of a £4K holiday per year and get 94% success rate but when I change it to every 2 years the success rate drops to 84%. Strange!"

Can you recreate that in an (anonymised) simple scenario and attach the extract?

randompenitent

Is there anything like the timeline app available for those of us without advisors?  I've built spreadsheets and used various consumer-facing tools, but it would be great to get some validation.  

GazzaBloom

randompenitent said:

Is there anything like the timeline app available for those of us without advisors?  I've built spreadsheets and used various consumer-facing tools, but it would be great to get some validation.  

Timeline is designed for advisors but there is a fully functioning free trial.

I'm not an advisor and I'm using it