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.
* Whole bevy of 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 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 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.
Brentmark Retirement Plan Analyzer and Kugler Estate Analyzer
Brentmark Software Inc.
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
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
Pricing: Retirement Planner - $99.95; Professional - $139.95.
Money Minders Financial Planning Spreadsheets
Money Minders Software
Pricing: New license - $589: renewal - $169 a year.
NaviPlan Standard and Extended
Emerging Information Systems Inc.
Pricing: One year, single unit - Standard Offline, $799; Extended Offline, $1,299; NaviPlan Suite, $1,699.
Emerging Information Systems Inc.
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
Pricing: Starts at $39.95.
ViewPlan Advanced CCH, a Wolters Kluwer business
Pricing: Starts at $1,849.
(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.
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