| The news was worth the wait. Based on our
goals, the money we've saved and how much we spend, my wife, Georgina, and I should be OK
in retirement even if our investment returns are below average, inflation runs high or we
face high medical expenses.
That's the conclusion of RetirementWORKS2 for YOU, the most
comprehensive retirement planning software for consumers I've tested ($189 for a one-year
license, annual renewals $44.50; discounts may be available).
Retirement Planning Software
The online program at www.RetirementWorks2.com, provides
detailed information you simply can't get from the plethora of free but superficial and
potentially misleading retirement calculators on the Internet.
"We cannot do this by asking just a few - or even a
few dozen - easy questions," the program's user guide states. "We need a good
deal of information to generate even a relatively basic plan responsibly."
That's information about your financial goals, your family,
your assets and debts, income and expenses, estate and legacy plans and your health,
including whether you have health and long-term care insurance and what the coverage
limits are. Although my financial records are well organized, it took me three hours over
four sessions (you can stop and pick up where you left off) to answer everything.
Rather than a turn-off, I find such detailed questioning a
reassurance that a program is factoring in all relevant information before spewing out
conclusions and recommendations. Another program I reviewed recently, ESPLanner at
esplanner.com, also asks for detailed information to be able to recommend annual spending,
saving and insurance targets to achieve a stable lifetime standard of living for each
person in the household.
Unlike ESPlanner, which would appeal to adults of all ages,
RetirementWORKS is specifically designed for those approaching or entering retirement.
"We are trying to serve people who are close enough to retirement they are starting
to think about it seriously," said Chuck Yanikoski, president of Still River
Retirement Planning Software Inc., the program's developer.
The mere fact that the program requires you to provide a
lot of information - including stating your current goals and concerns, and desires and
preparations for what happens after death - forces you to think seriously about these
issues. The program does a superior job of framing questions in plain English and
tailoring the approach based on whether users are comfortable with numbers or prefer to
deal in words and concepts whenever possible.
Still, things can be simplified only so much before they
are dumbed down, and the software does not fall into that trap. "Some questions are
inherently complicated," Yanikoski said. "If you are the person in the family
that pays the bills and pays the taxes, then you should understand all these
questions."
Like ESPlanner, RetirementWORKS does not recommend specific
investments or products so you don't need to worry about conflicts of interest. For
Georgina and me, among other things, it recommended we keep our credit card balances
always paid up (we do) and that we consider converting, in whole or in part, our
traditional IRAs to Roth IRAs to save on future taxes (we already planned to).
For people without enough savings, the recommendation will
often be working longer if possible and/or spending less. "A lot of financial
analysis assumes people are not willing to reduce their lifestyles," Yanikoski said.
"In reality, if people have to, there will be a period of adjustment but they'll
discover they can live with less. A lot of Baby Boomers are going to have to."
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