| There are some classes of software that
simply don't change much from year to year, and retirement planning software is one of
them.
That was the lead sentence from last year's roundup of
retirement planning software, just before the crashing economy and the loss of trillions
of dollars in assets made that statement ridiculous. Not since the recession of the early
1980s has the need for revised retirement planning - and better tools with which to handle
market and tax conditions - been so acute.
With a whole bevy of retirement issues have emerged in the
past year, not the least of which are:
- Can your clients still retire, or do all the basic
assumptions need to be revisited?
- What if the markets are slow to come back?
- With trillions spent to revive the economy - and trillions
more planned - what will be the tax ramifications?
- What changes are anticipated in the planned overhauls of
Social Security and Medicare?
- How are the financial straits of state and local governments
going to affect taxes, including sales and property taxes, for retirees and prospective
retirees?
The stress of the current recession, coupled with the loss
of assets for most clients and uncertainty about where to invest for future years, will
make the near future more demanding for most accountants engaged in retirement planning,
and may necessitate changes in how accountants approach these engagements.
Fortunately, publishers of retirement planning systems seem
attentive to this need - many are updating and releasing new versions of their software
this year, while others are making provisions for changing federal and state tax laws or
the need for stronger comparison of scenarios.
We've looked at the nine most notable retirement planning
tools for the 2009 product survey. Here's how they stack up:
Brentmark Retirement Plan Analyzer
Brentmark offers three programs directed specifically at
retirement planning, of which the flagship is the Retirement Plan Analyzer. The RPA is
used to evaluate various strategies of taking distributions from traditional IRAs, Roth
IRAs, Roth 401(k)s and other qualified retirement plans. Its companion programs are the
Retirement Distributions Planner and the Retirement Income Navigator.
In the final stages of beta testing is a new 2009 version
of the Retirement Plan Analyzer, which retains the interface and functionality of previous
versions, but with some new features. Chief among these are the addition of a new
"quick calculators" tab, which allows a side-by-side comparison of conversion of
the retirement plan to a Roth IRA. There is also a new "quick start" menu for
faster access to client set-up and functions.
The RPA 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 year 2010), spousal rollovers, income taxes, estate taxes, IRD
calculations, life insurance and done-exclusion gifting.
Brentmark's RPA offers the kind of flexibility needed for
fast scenario comparisons, with multiple scenarios that include tax calculations, as well
as separate growth rates for each type of fund, multiple beneficiaries and annual
recalculations. It also handles state-specific estate and inheritance taxes - the
so-called "death tax."
The Retirement Income Navigator, which was updated to
Version 3.0 in November 2008, uses an asset allocation approach for optimizing retirement
income during the income drawdown period of retirement. The Retirement Distributions
Planner offers exhaustive treatment of required minimum distributions and pre-59-1/2
distributions.
While the other two offer specific tools for retirement
planning tasks, the Retirement Plan Analyzer remains the most popular with accountants for
its simple but effective blend of economy, flexibility and tax considerations.
Brentmark Kugler Estate Analyzer
The Kugler Estate Analyzer is designed to give planners
more flexibility in creating advanced financial positions for their clients through 18
inter-related techniques that include GRATs, Rolling GRATs, charitable trusts, QPRTs,
family limited partnerships and GST trusts. The 2009 version was released in December of
2008.
A simple, three-step process - client data entry, input of
assets and liabilities, and selection of techniques - is used to fine-tune the techniques
and produce reports that effectively recap the client's assets, goals and the benefits for
each technique used. Integral to these reports is the use of flowcharts to illustrate each
planning technique and its impact.
The Kugler Estate Analyzer is an effective means to bring
both simple and complex enhancements to a standard "distributions-and-portfolio"
retirement plan. Its low cost, flexibility and attention to state and inheritance tax
implications make it a valuable addition to the planning toolkit - and a program that is
growing in popularity among accountants.
BNA Wealth Manager
The BNA Wealth Manager is a wealth management solution
designed especially for accountants that simplifies complex planning processes and equips
the practitioner to deliver actionable advice to clients.
Aimed at the mid-to-upper end of the planning market, from
mass affluent to ultra-high-net-worth clients, BNA Wealth Manager allows practitioners to
choose between goal- or cash-flow-based analyses in order to handle the full range of
client life events - including retirement, education, special needs analysis and more.
In addition, BNA Wealth Manager handles advanced estate,
trust and gift planning - services that specifically meet the needs of high- and
ultra-high-net-worth clients. And unlike financial planning software designed for generic
planners or financial institutions, it helps accountants to offer financial planning
services in a way that is easily integrated into their current workflow processes and
client value structure.
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.
The BNA Wealth Manager is a new product that will debut at
about the time this article is published. While it is not possible to fully assess the
product, BNA is noted for its considerable expertise in wealth and estate management and
its advanced tax planning capabilities. As with other tools that debut in this turbulent
year of recession, its core features are speed, flexibility, and the generation of clear
and compelling reports.
J&L Retirement Planner
The J&L Retirement Planner is a specialized version of
the company's financial planning system, expanded to include reverse mortgages, asset
allocation withdrawals, minimum distributions and scenario event groups. Though this is
the retirement-specific version, most professionals prefer the even more advanced
capabilities of the Professional Version, which provides for asset allocation, tracking,
rebalancing and management. It is in the Professional Version that you'll find such
advanced capabilities as Monte Carlo analysis and historical return analysis, and also the
greatest selection of customized reports.
The Professional Version is designed to be an inexpensive,
PC-based system that focuses specifically on retirement decisions, with less emphasis on
pre-retirement life goals. It shows the yearly effects on up to 50 accounts, including
investment, tax-free, retirement, asset and equity accounts. The output may also be
presented with bar, line and pie graphs.
The Professional Version also 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 you 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 the
IRS, Rule 72t, and handling of requirements for the IRS required minimum distributions at
ages 59-1/2 and 70-1/2.
Version 14.0, released in March, adds a methodology for
declining property values, an option for a home equity line of credit, enhanced
"what-if" capabilities with scenario grouping, more Monte Carlo simulation
features and an enhanced reporting capability.
J&L Retirement Planner is a well-balanced and capable
utility that offers fast results and strong client presentation capabilities in an
economical package. But accountants will want to opt for the Professional Version to
expand the scenario capabilities and its portfolio management capabilities.
Money Minders Financial Planning Spreadsheets
Money Minders is a spreadsheet-based financial planning
system that operates on the Microsoft Excel platform and offers a variety of templates for
retirement that will strongly appeal to accountants who craft their own plans and
presentations but want stronger calculation and scenario comparison capabilities.
The 25 templates included for retirement planning 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 - client, funding requirements for retirement
- joint, IRA projections, an IRA accumulation/retirement projector, Keogh retirement
account projections, retirement savings plan - monthly illustration, minimum required
distribution - IRA plans, 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.
Recent enhancements to the software include a new interface
to update the menu system that interacts with Financial Planning Spreadsheets. It offers a
better navigation system that appears to the left of the open templates, a new feel and
look, a database system for the basic data required by the templates, imprint changes that
can be downloaded directly from the company's Web site, better license/software updating,
a better help system, and a new manual.
Money Minders Financial Planning Spreadsheets are priced at
the mid-range and offer a simple but effective planning platform for accountants who
prefer spreadsheet analysis of data and concepts.
NaviPlan Standard and Extended
NaviPlan is a retirement system that operates according to
the needs of the client. NaviPlan Standard qualifies the client, assessing their financial
situation, priorities and goals. Three levels of planning are available within this
version, to provide for clients who are wealth accumulators, mass-affluent clients and
high-net-worth clients. NaviPlan Extended is a more elite planning tool designed for
advisors who deal with high- and ultra-high-net-worth clients.
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 Standard is 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 is designed to educate individuals at or
nearing retirement on strategies to achieve their retirement goals and account for
potential risks.
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. Advisors simply check out
plans from the NaviPlan Central online database, create and update plans without an
Internet connection, and later check-in updated and new plans.
Profiles Professional
Profiles Professional is a comprehensive, cash-flow-driven
solution with 14 modules for analysis, financial planning, estate planning and sales
support for the professional. It covers a wide range of financial planning topics, with
substantial emphasis on retirement considerations such as retirement fund acquisition and
disbursement, asset allocation planning, disability, long-term care and death.
In the most current version, the focus is on enhanced
scenario presentation, as well as on streamlined client data entry and management; changes
to the left-side navigation system; and a Retirement Asset Results Timeline to track
contributions, withdrawals, growth and account balance over the life of the retirement
plan.
Profiles Forecaster, now in Version 4.0, is a faster
solution to provide the client with a basic plan in 20 minutes or less. It offers
retirement planning, survivor needs, disability needs and long-term care needs, but not
some of the more extensive allocation, disbursement and estate planning services available
in Profiles Professional. Among the new features in Version 9.0 are new ways to illustrate
retirement options to clients and the use of new alerts to prevent advisors from
unknowingly exceeding clients' qualified plan limits.
Version 9.0 was released in June of 2008, expanding the
program's ability to perform what-if analyses, compare results with the current plan, and
include up to four scenarios in a variety of new reports.
Profiles Professional offers accountants stronger client
relationship-building, streamlined data entry and enhanced presentation tools in a modular
format that strongly appeals to accountants. It offers consistent and superior
capabilities in scenario evaluation and client/case management that should be of
particular interest to accountants with diversified retirement planning needs.
Quicken Retirement Planner
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, rates 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
plan.
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.
It's easy to denigrate a financial planner that costs only
$39.95 and can be purchased off the shelf - but that would be a serious mistake, since the
retirement planning capabilities built into Quicken can rival some of its more customized
and more expensive rivals. It may not have Monte Carlo simulations or a polished final
client presentation. But what it does have is speed, effectiveness and economy that are
unmatched.
ViewPlan Advanced
ViewPlan Advanced is a robust and full-featured estate
planning solution that 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. With improvements to numerous calculations and the ability to modify federal
and state tax rate assumptions, it remains one of the most powerful retirement planning
systems available.
Dave McClure is the president of Kent Associates, in
Alexandria, Va., an independent testing laboratory and evaluation service.
Vendor Information
Brentmark Retirement Plan Analyzer and Kugler Estate
Analyzer
Brentmark Software Inc.
(800) 879-6665
www.brentmark.com
Pricing: Retirement Plan Analyzer - single user, $595 and
annual maintenance of $179; site license (up to 10 users), $1,190 and annual maintenance
of $358. Kugler Estate Analyzer - single-user, $595 and annual maintenance of $199; site
license, $1,190 and annual maintenance of $398.
BNA Wealth Manager
BNA Software
(800) 424-2938
www.bnasoftware.com
Pricing: Base license - $1,195; renewal - $1,195.
Additional licenses up to nine - $1,095 each, with $205 annual renewal.
J&L Retirement Planner
J&L Software LLC
www.jlplanner.com
Pricing: Retirement Planner - $99.95; Professional -
$139.95.
Money Minders Financial Planning Spreadsheets
Money Minders Software
(800) 694-9996
www.money-software.com
Pricing: New license - $589: renewal - $169 a year.
NaviPlan Standard and Extended
Emerging Information Systems Inc.
(888) 692-3474
www.eisi.com
Pricing: One year, single unit - Standard Offline, $799;
Extended Offline, $1,299; NaviPlan Suite, $1,699.
Profiles Professional
Emerging Information Systems Inc.
(800) 237-6335
www.profiles.com
Pricing: Desktop base - $1,049 a year; Web - $150 extra.
Monte Carlo, Advanced Estate Planning and Security Classifier options extra. Profiles
Forecaster - $599.
Quicken Retirement Planner
Intuit
www.intuit.com; www.quicken.com
Pricing: Starts at $39.95.
ViewPlan Advanced CCH, a Wolters Kluwer business
(800) 449-8114
www.cchgroup.com
Pricing: Starts at $1,849. |
