The Needs Analysis Calculator in Detailed mode answers two questions to determine how much capital I need:

  1. Given the amount of assets and cover I have, how much capital do I need to extinguish my liabilities, together with
  2. How much capital do I need to provide for future income and expenditure

Whereas in Splits mode, we only solve for the present value capital requirement, the idea in  detailed Mode under future income/expenditure is that you can’t use income in, say, years 5 – 10, to offset expenses of years 1 - 5.

Because you can’t use this income against the expenses, you need to invest sufficient capital now in order to make up the difference.

The capital you require in addition to (1) to cover (2) is deemed Capital Required to Solve Cashflow Shortfall.

The total capital required has always included this amount in the "Detailed" mode of Needs Analysis. However only in recent versions of Xplan have we explicitly allowed for it in the Client Needs Display page.

The attached detailed document provides further information.