This has not been the best of years for
retirement planning software. First, in spite of an upward-trending market, retirement
plans and portfolios have been badly battered. Second and worse, the whole class of
software has come under attack for perceived inadequacies.
The Society of Actuarials and Actuarial Foundation, in a
review of 12 retirement planning packages, found that nearly all fell short of the mark in
doing what they were supposed to. The review covered consumer and professional packages,
and noted that:
- They are based on unrealistic rates of return.
- They often fail to account for fees, taxation and inflation.
- They underestimate life expectancy.
- They don't factor in Social Security.
- Home equity treatment varies widely.
- Some life events are just difficult to account for.
The study concluded that, "The results from any
program should not be used as the sole input for decision-making for retirees or
If this seems a harsh indictment of an entire class of
software, it merely shows that there is good reason to buy the upgrade next time. More
important, it reiterates what most accountants and clients have known from the outset:
Software is just a set of tools, and the value to the client lies not in the tools but in
the hands of the professional planner.
Retirement Plan Analyzer, Distributions Planner, and
Brentmark Software Inc.
Brentmark's Retirement Plan Analyzer is the most popular of
its three retirement planning products, along with the Retirement Income Navigator and the
Retirement Distributions Planner. The RPA is used to evaluate various strategies of taking
distributions from traditional IRAs, Roth IRAs, Roth 401(k)s and other qualified
A 2009 version of the Retirement Plan Analyzer was released
last November, which added a new Case Analyzer function; a new Quick Calculators tab,
which allows a side-by-side comparison of conversion of the retirement plan to a Roth IRA;
and a new Quick Start menu for faster access to client set-up and functions. The current
version, 2009.02, was released in February 2010. It calculates up to four alternatives
simultaneously for varying types of distributions, including minimum distributions,
pre-59-1/2 distributions, Roth IRA conversions (including the two-year spread-out for such
conversions in 2010), spousal rollovers, income taxes, estate taxes, IRD calculations,
life insurance and done exclusion gifting.
The Retirement Income Navigator, which was updated in
November 2008, uses an asset allocation approach for optimizing retirement income during
the income drawdown period of retirement. Its chief benefit is that its allocation
approach does a better job of handling market variability.
The Retirement Distributions Planner offers substantive
treatment of required minimum distributions and pre-59-1/2 distributions. It handles up to
five beneficiaries either after the death of the plan owner or after the death of a spouse
after a spousal rollover. Reports show annual distributions and the life expectancy for
each beneficiary, as well as total distributions to each beneficiary and yearly
distributions to all beneficiaries.
Brentmark's Retirement Plan Analyzer is a fast and flexible
tool for scenario comparisons, with multiple scenarios that include tax calculations,
separate growth rates for each type of fund, multiple beneficiaries and annual
re-calculations. It also handles state-specific estate and inheritance taxes, making it an
invaluable tool for comprehensive retirement analysis.
BNA Wealth Manager
(800) 424-2938 opt. 3
BNA Wealth Manager is designed especially for accountants
to provide needs-based financial and retirement planning based on the cost basis reporting
and planning system created by Scivantage.
The result is a product designed for faster case
preparation, faster case analysis and a shorter sales cycle. BNA Wealth Manager,
introduced in June 2009, addresses retirement planning, life insurance needs, cash flow
analysis, education funding, distributions planning (qualified plans, IRAs, RMDs, lump sum
and pre-59-1/2), estate planning, and gift and trust planning. Aimed at the mid-to-upper
end of the market, from mass-affluent to ultra-high-net-worth clients, it allows
practitioners to choose between goal- or cash-flow-based analysis.
It offers an "instant client" feature for faster
case set-up, and a modular approach to planning that gives the accountant better control
over the amount of data to perform an analysis. It is also highly scalable, using the
capabilities that Scivantage initially developed for its own Methuselah wealth management
The program delivers a clean and easily navigated
interface, with top and side menus covering major areas of analysis, scenario comparisons
and creation of client proposals. Sub-menus handle input of client details and objectives,
including education, beneficiaries and income. Other menus delineate assumptions,
retirement planning, distribution planning, estate and gift planning, as well as analyses
for capital needs, disability needs and long-term care.
Though relatively new to the marketplace, BNA has done
solid research into the needs of accounting firms for a comprehensive planning tool, and
the result is a very solid high-end tool with minimal set-up and training requirements, so
that an accountant can be up and planning within 15 minutes.
J&L Retirement Planner
The J&L Retirement Planner is a specialized version of
the company's financial planner, expanded to include reverse mortgages, asset allocation
withdrawals, minimum distributions and scenario event groups.
The output is displayed in a text format that shows the
yearly effects on up to 50 accounts, including investment, tax-free, retirement, asset and
equity accounts. The program can create a scenario based on mortgage, loan, credit-card
debt, withdrawal, deposit, and transfer events. And it incorporates minimum required
distributions and Revenue Code Section 529 (college investment savings) into the
scenarios. The program incorporates up to five separate budgets and the ability to track
individual budget items. Each event has an option to be adjusted yearly for inflation or a
separate yearly adjustment rate. There are many screen and printed reports.
Though this is the retirement-specific version, most
accountants prefer the capabilities of the Professional Version, which offers more
advanced planning and portfolio management capabilities, including the ability to handle
unlimited budgets, real estate investments, Monte Carlo simulations, historical return
analysis and asset allocation. It also allows the planner to define groups of accounts and
maintain a constant asset allocation within each group. This feature allows the user to
rebalance each group yearly or periodically. There is also a feature that allows the user
to rebalance a group when funds are transferred into an account within that group.
J&L's Planners offer the ability to track the IRS basis
and implementation of college savings and early distribution programs established by Rule
72t, and handling of requirements for the IRS required minimum distributions at ages
59-1/2 and 70-1/2.
The J&L Retirement Planner is designed to be a low-cost
package available from a variety of software download sites. Most accountants will
benefit, though, from the Professional Version of the J&L Financial Planner for its
Money Minders Financial Planning Spreadsheets
Money Minders Software
Money Minders is a spreadsheet-based financial planning
system that operates on the Microsoft Excel platform and offers a variety of 158 templates
for retirement planning.
Those templates include a comparison of deferred pension to
private, deferred tax liability from tax-sheltered investments, defined-benefit pension
plan calculations, effect of recommendations on tax payable, funding requirements for
retirement, individual retirement account projections, an IRA accumulation/retirement
projector, Keogh retirement account projections, money purchase pension plan, pension
salary calculations, prepaid pension maximization, projected growth of a tax-sheltered vs.
open investment, a retirement calculator, and tax-sheltered annual income illustration.
They also deal with many other concepts, including pension
maximization, leverage, buy term and invest the difference, retirement planning, estate
planning, taxation, term versus UL, life insurance comparisons, life and disability
insurance needs analysis, cash flow, education funding, investment analysis, cost base
tracking, asset allocation and portfolio reporting
Recent enhancements include a new interface to update the
menu system that interacts with the company's spreadsheets. This interface offers a better
navigation system, a database system for the basic data required by the templates, imprint
changes that can be downloaded directly from the vendor's Web site, and a new manual.
The Financial Planning Spreadsheets are priced at the
mid-range and provide a strong alternative to accountants who wish to use their own set of
tools to develop an effective retirement plan. It's an excellent choice for
spreadsheet-adept accountants who prefer tabular analysis of data and concepts.
NaviPlan Standard and Extended
Emerging Information Systems Inc.
The NaviPlan line from EISI uses two tools that stand
separate from the Profiles Professional and Forecaster products, but are designed to work
with those products to fill a hierarchy of needs-based planning tools that stretches from
the simplest plans to the more complex needs of high-net-worth clients.
NaviPlan Standard is an assessment tool with three levels
of planning, all of which can be promoted into NaviPlan Extended. It qualifies the client,
assessing the financial situation, priorities and goals. The three levels of planning
provide for clients who are wealth accumulators, mass-affluent clients, and high-net-worth
clients. It is meant to be a quick planner that offers pre-set scenarios for sophisticated
retirement distribution scenarios and side-by-side "what-if" comparisons.
Retirement distribution scenarios can be augmented with system-generated strategies that
automatically calculate 100 percent coverage for any goal. And a new Retirement
Distribution Summary report is designed to educate individuals at or nearing retirement on
strategies for achieving their retirement goals and accounting for potential risks.
The retirement planning capabilities of both versions
include a financial assessment, pre- and post-retirement cash flow analysis, planning for
accumulation and distribution of retirement funds, survivor income needs, disability
income needs, long-term-care needs, estate planning, business planning and tax analysis.
NaviPlan software is available in a flexible ASP platform
(NaviPlan Central) that enables advisors to do their work from just about anywhere. A
subscription to NaviPlan Central includes an offline format of NaviPlan software that can
be installed locally on an advisor's desktop or laptop computer.
NaviPlan continues to bring a strong and flexible toolset
to the retirement planning field. NaviPlan Extended in particular is a more elite planning
tool designed for advisors who deal with high- and ultra-high-net-worth clients. It offers
a more sophisticated tool with two levels of intermediate and advanced cash-flow-based
Emerging Information Systems (USA) Inc.
Profiles Professional is a cash-flow-driven retirement and
wealth management solution based on 14 modules for analysis, financial planning, estate
planning and sales support for the professional. It is supported by an independent
fast-planning module known as Profiles Forecaster, now in Version 4.2.
Profiles Forecaster offers a faster solution to provide the
client with a basic plan in 20 minutes or less. It offers retirement planning, and
survivor, disability and long-term-care needs, but not some of the more extensive
allocation, disbursement and estate planning services available in Profiles Professional.
Profiles Professional is a more robust solution that places
substantial emphasis on retirement considerations such as retirement fund acquisition and
disbursement, asset allocation planning, disability, long-term care and death. The focus
is on enhanced scenario presentation, as well as on streamlined client data entry and
management; easier navigation via the left-side navigation system; and a Retirement Asset
Results Timeline to track contributions, withdrawals, growth and account balance over the
life of the plan.
The new versions, released in January 2010, bring new
reporting features to leverage presentation options; a more appealing user interface with
brighter colors, re-designed input fields and improved navigation bars; a new calculator
to address conversion of a traditional IRA to a Roth IRA and the impact on future income;
and new integration with SmartOffice to automatically populate Profiles Professional with
data from the Ebix CRM program and the ability to export data to the Advisor Workstation
Enterprise Edition from Morningstar.
EISI is rapidly strengthening the capabilities of the
Profiles Professional product into an appealing solution for accountants that offers both
a desktop and Web-based version, fast-start retirement plan development and more than 300
configurable options to enable unique branding, compliance and planning features. Though
not the least expensive, it is a retirement planning package that should be at the top of
the list for accountants looking for an effective planning package.
Quicken Premier 2010
San Diego CA
Another year has passed, and while the basic Quicken
personal financial software has improved in a number of ways, the retirement planning
engine remains largely the same. Fortunately, this is still fairly strong for a package
that can be had for as little as $89.95 off the shelf.
Located under the planning menu within Intuit's Quicken,
this retirement planning system offers a fast and accurate method of collecting retirement
information, drawing data from the personal finance information in Quicken to address
income, retirement income, tax situations, savings, investments, rate of return and risk,
and assets and liabilities. It then creates a detailed plan showing needed retirement
income and assets. The plan assumptions can be changed on the fly, and major life events
(college, home purchase, etc.) can be compared for their impact on the overall retirement
It also offers the ability to quickly address differing
scenarios based on early retirement, a changing income level or rates of return, and
working in retirement. And it offers professional planner resources, including an
interview that can help a client prepare for their first retirement plan. Asset allocation
is also supported, with online resources that enable the client to select, monitor, adjust
and rebalance retirement portfolios.
Quicken's retirement planner is available in an online
version, and via mobile devices, making it one of the more flexible mobile options for
Quicken is not trying to take the retirement planning field
by storm, but it does offer a number of features that make it worth a look, particularly
for accounting firms with a minimal client base in retirement planning.
CCH, a Wolters Kluwer business
ViewPlan Advanced is an estate planning system with
retirement planning capabilities. It enables practitioners to create unlimited planning
scenarios, presenting up to three planning scenarios to clients at one time. For
retirement planning, it provides comprehensive scenario planning supported by impressive
graphs, spreadsheets and text reports.
CCH ViewPlan Advanced includes the most popular charitable
and intra-family wealth transfer techniques, including charitable remainder annuity
trusts; charitable lead unitrusts; charitable remainder unitrusts; grantor retained
annuity trusts; net income with makeup CRUTs; grantor retained unitrust trusts; flip to
CRUTs; grantor retained income trusts; pooled income funds; qualified personal residence
trusts; charitable lead annuity trusts; self-canceling installment notes; installment sale
to intentionally defective grantor trusts; and installment sale private annuities.
Version 4.9 features improved federal and state law
builders with state updates for Indiana, North Carolina, Oklahoma, Pennsylvania, Tennessee
and Washington; an updated gift tax exclusion increased to $13,000; an updated estate tax
payable in installments; and revised tools and calculations.
ViewPlan Advanced is a very capable planning system that
offers the additional benefits of the tax planning features in the CCH ProSystem fx family
of products. Recent improvements to numerous calculations and the ability to modify
federal and state tax rate assumptions continue to make ViewPlan Advanced a powerful
retirement planning system for accountants.
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