Getting Started: Future Cash Flow

In the Future Cash Flow section, we want to map out future income and expense assumptions. The initial values are populated based on your income snapshots in the Income and Expenses sections in Discovery.

These snapshots represent broad phases of income and spending, but you may want to get more specific with income and spending assumptions year by year.

Income Assumptions and Overrides

There are a few important Income assumptions to highlight, for example, we assume that income increases with inflation each year. This represents cost of living adjustments but not promotions or merit increases. If you’re early in your career you may want to assume your income increases faster than inflation for 5-10 years. These specific assumptions can be made here in the Future Cash Flow table.

Changes in income when starting a family can also be included here, for example, you may assume a reduction in employment income for a year but add assumptions for employment insurance and/or employer top-ups.

It’s also possible to add specific amounts for bonus income, taxable income, non-taxable income, or from a private corporation it’s possible to include non-eligible or eligible dividends. For example, other taxable income can be added for an RSU vesting, or other non-taxable income can be added for a gift for a down payment.

Future CPP and OAS income will be added automatically after you complete the CPP & OAS Estimate section. There is no need to add these values manually as they will be calculated for you when you complete the next section.

Income is always shown in future dollars in the table and includes the effect of inflation.

Expenses Assumptions and Overrides

The Expense assumptions can also be changed in the Future Cash Flow table. It’s possible to add things like future child expenses from the Child Expenses estimate. Child expenses typically change from year to year, especially in the beginning with childcare, so making these year by year changes can better help map your future cash flow.

Some expenses are added automatically, like RESP contributions, home sale costs, and home purchase costs.

“Other” one-time expenses can also be added for a large one-time cost like a once-in-a-lifetime trip after retirement.

The “other” one-time expenses category is also a great way to see how an increase or decrease in spending can improve your plan. A negative value can be entered and cascaded down to simulate a spending reduction and a positive value can be entered and cascaded down to simulate a spending increase.

Very important! Expenses are always shown in today’s dollars in the table, it is easier to think about future expenses based on what they cost today, then the platform will increase those costs by inflation to get the estimated cost in future dollars. Always, when entering Expenses, enter the estimates in today’s dollars. This is different than Income which is show in future dollars.

Not shown are debt payments, income tax, or CPP/EI contributions. These are calculated in the Final Plan.

Changing Housing Expenses: All values in Blue can be overriden with a specific amount in Today's Dollars.

Changing Transportation Expenses: All values in Blue can be overridden with a specific amount in Today's Dollars.

Changing Personal Expenses: All values in Blue can be overridden with a specific amount in Today's Dollars.

Changing Other Expenses: All values in Blue can be overridden with a specific amount in Today's Dollars.

Conversion of Expenses in Today's Dollars to Future Dollars: Always, when entering Expenses, enter the estimates in today’s dollars. Expenses are always shown in today’s dollars in the table, it is easier to think about future expenses based on what they cost today, then the platform will increase those costs by inflation to get the estimated cost in future dollars.