The fact that there has been no Baby Boomer "bust" has been due in large part to the skill of retirement planners, accountants and their clients.The bust was supposed to occur as Boomers began reaching retirement age without having saved enough to retire. This, coupled with the dismantling of the retirement and pension programs at a host of corporations nationwide, could have created the most poverty-stricken generation of retirees since the Great Depression.
But it's not happening, for three reasons:
* 1. The Baby Boomers have amassed substantial wealth in the past two decades due to strong markets for stocks, real estate and other asset classes.
* 2. People are living longer with better health, so retirement is either postponed or is viewed as a period of "semi-work" in which the retiree continues to receive income through a different job or interest.
* 3. More people at every income level are able to make use of retirement planning services and tools to help plan for their senior years.
It doesn't hurt that the tools are getting better each year.
Once relegated to being one of 10 or 20 planning tools in a financial planning toolkit, retirement planning is emerging as a specialty in its own right, with its own packages and features. In fact, the field of financial planning has, over the past five years, begun to segregate itself clearly into four distinct areas of practice - life goals planning, retirement planning, estate (or death) planning, and asset allocation/tracking/rebalancing.
Because they are still closely interrelated, this report on retirement planning software includes several packages that also address estate planning. But in future years, it's reasonable that planners will begin to specialize, and that future software reviews will continue to segment themselves into these four distinct and separate categories.
BRENTMARK RETIREMENT PLANNING TOOLS
If there is a Swiss Army knife of financial planning resources, it is surely Brentmark Software. With 11 software tools for retirement, estate and financial planning, six informational Web sites for professionals, and an online calculation tool, Brentmark focuses on specialized calculation and planning needs for specific tasks.
For retirement planning, three of its software programs are of critical interest - the flagship Retirement Income Navigator, the updated Retirement Distributions Planner and the vastly overhauled Retirement Plan Analyzer.
The Retirement Income Navigator is a stable planner that utilizes a unique strategy known as the ISG methodology that manages asset allocation for both stocks and other assets, and optimizes these in a series of income "ladders." The most recent version, released last year, saw enhancement in the ability to build a list of categories such as "high-risk" stock and select the investment from a drop-down menu. Another feature will be the addition of a tool that helps analyze the use of annuities to meet retirement income goals. Yet another will be the ability to direct the movement of money in a specific year without interfering with the ability to optimize.
The Retirement Plan Analyzer is built on the foundation of the Pension & Roth IRA Analyzer, but has been totally re-written to improve navigation, and updated to include the Roth 401(k), changes in tax law and a new "state death tax manager." It offers a means to evaluate various strategies (showing up to four alternatives at one time) of taking distributions from IRAs and qualified plans.
The Retirement Distributions Planner gives an exhaustive treatment of required minimum distributions and pre-59-1/2 distributions, handling up to five beneficiaries either after the death of the plan owner or after the death of a spouse following a spousal rollover.
Brentmark's set of retirement planning tools are tightly crafted, focused in their function and economical to use. Even if other tools are used for plan preparation and presentation, these tools should be an active part of the retirement management process.
BNA ESTATE & GIFT TAX PLANNER 2007
Ben Franklin said it first: "In this life, nothing is certain but death and taxes."
Nowhere is that more true than in retirement planning - it is impossible to do effective retirement planning without considering the tax implications of a number of delicate but unavoidable scenarios, from passing wealth to beneficiaries to the death or "de-coupling" of the retirement plan owner. These are the tasks that BNA is geared toward handling.
The BNA Estate & Gift Tax Planner is a powerful estate tax planning, calculation and presentation package intended to quickly develop comprehensive "what-if" planning scenarios, efficiently calculate the correct estate tax, and deliver presentations to clients in a variety of formats, including Word and Excel documents, if desired. Updated at the beginning of this year, the 2007 version offers new page designs, simplified data entry, expanded menu and toolbar options, and enhanced presentation features.
Wizard-assisted functions help to calculate federal and state estate and inheritance taxes from 1986 forward; project multiple planning scenarios and what-if analyses to ensure minimum tax exposure; simultaneously calculate up to three family planning situations or six concurrent plans for single clients; manage complicated situations that include marital and charitable calculations, charitable trusts, generation-skipping-tax transfers and more; and produce polished presentation materials that include client letters and PowerPoint presentations.
It shows the net family share after all taxes on both estates, with or without gifts, life insurance trusts or discounted properties. It even permits on-the-fly reversal of the order of the spouses' deaths, with instant recalculations of taxes. And it calculates the retirement minimum distribution schedules for up to 60 years.
When it comes to assessing the tax ramifications of retirement and beyond, there simply is not a better toolset than the BNA Estate & Gift Tax Planner. With comprehensive and accurate tax calculations, a mid-range price and highly capable performance, BNA Estate & Gift Tax Planner 2007 offers great value for anyone engaged in retirement planning.
J&L RETIREMENT PLANNER V. 12.0
The J&L Retirement Planner is a specialized version of the company's financial planning toolset, offering the same planning capabilities as the financial planning or Professional versions. The primary difference is that this version focuses on retirement planning, rather than more general life goals, and it de-emphasizes the ongoing processes of asset allocation and management.
Designed as a broad-brush analysis, the planner 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. Version 12.0, released in early 2007, makes the software Vista-compatible and adds new capabilities for rebalancing up to five separate account groups yearly or multi-yearly; managing unlimited budgets to itemize both income and expenses; and making lump-sum or periodic payments to the principal of mortgages and loans.
The retirement planning version includes the ability to create up to five separate budgets, the ability to track the Internal Revenue Service basis and implementation of college savings and early distribution programs established by the IRS Rule 72t, and the ability to handle requirements for the IRS-required minimum distributions at ages 59-1/2 and 70-1/2.
For retirement planners who require more advanced planning and portfolio management, the Professional version scales even further, with the addition of unlimited budgets, real estate investments, Monte Carlo simulations, historical return analysis and asset allocation. It also allows the planner to track an investment's total returns (realized and unrealized gains, dividends, and cost basis), customize reports and financial graphing, export data to spreadsheets and databases, and access more reports.
Designed with a straightforward timeline organization, the J&L Retirement Planner and the Professional version are both well-suited to accountants serving clients who are not yet engaged in formal financial planning for wealth accumulation and distribution. Their low cost - and the free updates and upgrades included in the price - make either one an excellent choice for accountants seeking an uncomplicated but effective planning solution.
MONEY MINDERS FINANCIAL PLANNING SPREADSHEETS
Money Minders takes a very different view of retirement planning, eschewing the traditional interview/data entry/plan and report-generation approach in favor of a very focused, spreadsheet-based process. The result is a system that is ideal for accountants who want to have the calculations and reports in order to generate their own customized plan.
The planning system itself involves templates and calculation engines for nine categories of planning, including estate and retirement planning.
For retirement planning, these include a comparison of deferred pension to private, deferred tax liability from tax- sheltered investments, defined-benefit pension plan calculations, the effect of recommendations on tax payable, funding requirements for client or joint retirement, individual retirement account projections, an IRA accumulation/retirement projector, Keogh retirement account projections, retirement savings plan - monthly illustration, minimum required distribution for IRA plans, money purchase pension plans, pension salary calculations, prepaid pension maximization, projected growth of a tax-sheltered vs. open investment, a retirement calculator, and tax-sheltered annual income illustrations.
The estate planning set of templates also addresses retirement topics that include long-term care analysis, critical illness needs analysis, disability needs analysis and estate capital needs analysis.
The Money Minders Financial Planning Spreadsheets are not for everyone. But to perform a fast analysis of a given planning dynamic - such as calculating when best to draw Social Security benefits - or for the accountant more accustomed to using spreadsheet analyses, this economical and flexible planning solution is ideal.
NAVIPLAN STANDARD V. 10.2
NaviPlan is a strong financial planning solution whose retirement planning capabilities 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 presents its planning features in easy-to-use, promotable levels - NaviPlan Standard features a pre-planning level titled the Financial Assessment, in addition to three planning levels and a new asset allocation level. NaviPlan Extended features a pre-planning Financial Assessment and two planning levels, allowing advisors to increase the level of detail that they include in a client's financial plan based on client needs. Both NaviPlan Standard and Extended are available in stand-alone desktop and application service provider platforms.
NaviPlan Standard Offline 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. A new retirement distribution summary report is designed to educate individuals who are at or near retirement on strategies to achieve their retirement goals and account for potential risks.
NaviPlan Extended provides advanced estate planning, business planning that may be critical for retirement income generation and succession planning, and tax planning.
NaviPlan Central offers both NaviPlan Standard and NaviPlan Extended in a secure, online format that expands the planning functionality with tools such as workflow controls and data check-in/check-out that allow accountants to easily switch from the ASP platform to the desktop.
Version 10.2 is a modest update that includes Microsoft Vista compatibility, and testing and enhancement of the retirement distribution summary to provide more meaningful retirement goal strategies for single clients who are retired. It also addresses the provisions of the Pension Protection Act of 2006, which encourages retirement savings.
NaviPlan offers a powerful toolset that does an excellent job of addressing retirement planning on any level appropriate to the needs of both the accountant and the client. Stable, flexible and economical, it handles not only the basics of retirement planning, but some special situations not covered by competing products.
PROFILES PROFESSIONAL V. 8.0
The new edition of Profiles Professional, Version 8.0, includes significant usability improvements, a new design to help advisors increase productivity, and retirement-specific enhancements that include a new retirement distribution analysis, a revamped retirement planning process and stronger retirement reporting capabilities.
Profiles Professional is a comprehensive and 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. Much of the development work on Profiles Professional over recent upgrades has been dedicated to making the estate planning process more comprehensible to the client.
Profiles Forecaster, now in Version 3.0, 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.
Introduced in 2006, Profiles OnDemand is a Web platform that provides ASP versions of Profiles Forecaster and Profiles Professional. An appealing interface combines with fast and flexible use to enable the professional to spend less time on the mechanics of retirement/estate planning and more time working with clients.
Profiles Professional and Profiles Forecaster both offer strong and capable retirement planning tools, both focused on helping the professional understand the client's needs and turn those needs into a viable retirement plan. Continued development by EISI has only strengthened a retirement solution that is favored by financial planners and accountants.
QUICKEN RETIREMENT PLANNER
For a number of financial planning professionals, the most efficient and reliable path to retirement planning comes from Quicken, Intuit's personal finance management system.
Quicken's retirement planner, located under the planning menu on the main screen, provides a fast and accurate method of collecting retirement information, drawing data from the personal finance system to address income, retirement income, tax situation, savings, investments, rate of return and risk, and assets and liabilities.
It then creates a detailed financial plan showing needed retirement income and assets. The plan assumptions can be changed on the fly, and major life events (college, home purchases, 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 is not a solution for every accountant, but it excels in three areas that should not be overlooked - it is fast; it works well with self-directed clients who need help but do not want the active involvement of the planner going forward; and it was created with the assistance of the Financial Planning Association. These, along with its low retail price, make it a solution that many accountants will find appealing.
VIEWPLAN ADVANCED V. 4.7
ViewPlan Advanced is a powerful desktop estate planning solution that enables practitioners to graphically compare multiple estate planning scenarios with clients. 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; flips to CRUTs; grantor-retained income trusts; pooled-income funds; qualified personal residence trusts; charitable lead annuity trusts; self-canceling installment notes; installment sales to intentionally defective grantor trusts; and installment sale private annuities.
With fast, easy data input and manipulation, financial professionals are able to view virtually an unlimited number of plans, and compare up to three plans at one time to facilitate the presentation of optimal scenarios to clients.
Notable enhancements in this version include integration between ViewPlan Advanced and HotDocs, LexisNexis' document management system. Information such as contact name and title can now be shared between these two programs, saving time. Other recent enhancements include a non-qualified annuity retirement plan that provides flexibility in federal and state taxes, and the addition of "charitable gift annuities" as an advanced planning technique.
ViewPlan Advanced is a professional-strength application that performs well for both retirement and estate planning. Complemented by retirement tax planning through the CCH ProSystem fx Tax software and publications that include the third edition of the Retirement Planning Guide and the CCH Retirement and Estate Planning Answer Book 2007, Viewplan Advanced is a facile and flexible tool for accounting professionals.
Dave McClure is the president of Kent Associates, in Alexandria, Va., an independent testing laboratory and evaluation service.
Vendor Information
Brentmark Retirement Planning Tools
Brentmark Software Inc.
3505 Lake Lynda Dr., Ste. 212
Orlando, Fla. 32817-8327
(800) 879-6665
www.brentmark.com
Pricing: Retirement Income Navigator - single user, $299; up to 10 users - $598. Retirement Distributions Planner - single user, $249; up to 10 users, $498. Retirement Plan Analyzer - single user, $595; up to 10 users, $1,190.
BNA Estate & Gift Tax Planner 2007
BNA Software
1250 23rd St., NW
Washington, D.C. 20037
(800) 424-2938 opt. 3
www.bnasoftware.com
Pricing: Base price - $1,495; renewal - $835. Additional licenses - $205 each.
J&L Retirement Planner V. 12.0
J&L Software
240 East Church St.
Frederick, Md. 21701
www.jlplanner.com
Pricing: Retirement Planner - $99.95;
Professional - $139.95
Money Minders Financial Planning Spreadsheets
Money Minders Software
332 Island Park Dr.
Ottawa, Ont. K1Y 0A7
(800) 694-9996
www.money-software.com
Pricing: New license - $589; renewal - $169 per year.
NaviPlan Standard V. 10.2
Emerging Information Systems Inc.
500-330 St. Mary Ave.
Winnipeg, Manitoba R3C 3Z5
(888) 692-3474
www.eisi.com
Pricing: Annual single-unit subscription - NaviPlan Standard Offline, $625; NaviPlan Extended Offline, $1,225; NaviPlan Central, $995; NaviPlan Suite, $1,550.
Profiles Professional V. 8.0
Emerging Information Systems (USA) Inc.
5421 Avenida Encinas
Carlsbad, Calif. 92008
(800) 237-6335
www.profiles.com
Pricing: Desktop base, annual license - $1,000; Web - $150 additional (includes $30 one-time set-up). Monte Carlo, Advanced Estate and Security Classifier options extra. Profiles Forecaster - $590.
Quicken Retirement Planner
Intuit Inc.
2632 Marine Way
Mountain View, Calif. 94043
http://www.quicken.com
Pricing: Starts at $49.95.
ViewPlan Advanced V. 4.7
CCH, a Wolters Kluwer business
2700 Lake Cook Rd.
Riverwoods, Ill. 60015
(800) 449-8114
www.cchgroup.com
Pricing: Starts at $1,659; renewal - starts at $919.
