There are some classes of software that simply don’t change much from year to year, and retirement planning software is one of them.In any given year, you may see tax tables updated or compatibility with new operating systems and hardware slip in, but these are, by definition, very stable applications whose core strength is that they offer reliability and a strong set of features. Nor do they need to compete with consumer applications for the beauty of their interface or use of colors. Most of the work of a good retirement planner is done in the background, with little or no reason to bother with aesthetics anywhere other than in the final client presentation.
That said, some change does, of course, occur.
Life scenarios are growing more complex in an ever-more-complicated world. The Internet has gone mainstream and is altering everything about how we do business. And Congress is ever-willing to pass new laws that impact how a client’s retirement is planned, implemented and reviewed.
This year, nine retirement planning tools are included in our roundup of the best-of-breed applications. All fared well, particularly in addressing the changing tax implications and the impending change in estate tax calculations after 2009.
Here’s the roundup for 2008:
BRENTMARK RETIREMENT PLAN ANALYZER
Brentmark’s Retirement Plan Analyzer is a tool to assess the strategies that will enable clients to take distributions from traditional IRAs, Roth IRAs, Roth 401(k)s and other qualified retirement plans over the span of retirement living. 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 year 2010), spousal rollovers, income taxes, estate taxes, IRD calculations, life insurance and done exclusion gifting.
Planning for such distributions — with multiple scenarios that include tax calculations, separate growth rates for each type of fund, multiple beneficiaries and annual re-calculations — may not be as appealing as portfolio management and stock selection. It is, however, just as critical to an effective retirement strategy. Retirement Plan Analyzer is a cost-effective tool for this distribution management that also handles state-specific estate and inheritance taxes.
The interface is deceptively simple — with a minimal set of navigation and input screens that hide fairly powerful features for comparisons and reporting, as well as a robust help system. Reports are fully customizable, and include 3-D stacked bar charts, the ability to compare up to four scenarios at a time, flow charts and tables. Reports can be saved in PDF, RTF or HTML formats, as well as text files and spreadsheets.
Brentmark offers a stable of retirement planning tools, of which the Retirement Plan Analyzer is the most popular with accountants for its strong tax features, economical price and well-presented client plans.
BRENTMARK KUGLER ESTATE ANALYZER
The Kugler Estate Analyzer enables financial planners to show their clients the effect of more advanced planning techniques (such as GRATs, rolling GRATs, charitable trusts, QPRTs, family limited partnerships and GST Trusts) can result in a more advantageous financial position. It takes a building-block approach to using 18 interrelated planning techniques, from trusts and gifts to management of estate costs.
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 ESTATE AND GIFT TAX PLANNER
The BNA Estate and Gift Tax Planner is an estate tax planning, calculation and presentation package intended to quickly develop comprehensive “what-if” planning scenarios, efficiently calculate the correct estate taxes, and deliver presentations to clients in a variety of formats. It’s a program with a sound basis in tax planning, and ties strongly with BNA’s expertise in this area.
Wizard-assisted functions help to calculate federal and state estate and inheritance taxes from 1986 forward, specifying whether to use the 2001 act provisions; 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; and manage complicated situations that include marital and charitable calculations, charitable trusts, and GST transfers.
It demonstrates 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.
The core program has not seen major enhancements since the 2007 version, but a scheduled update for May (to Version 2008.1) will include 2009 law projections, allowing users to choose between reverting back to the 2001 sunset provisions or to use the 2009 exemption and tax rates for deaths that occur after 2010. This feature is important because, though there is uncertainty about what the estate tax law will be after 2010, few estate practitioners feel that the estate tax will revert back to the 2001 law or be permanently repealed.
BNA throws its considerable expertise and reputation behind the BNA Estate and Gift Tax Planner, and the program is notable for its consistently high performance in key areas — tax capabilities, calculations and client presentations. That, along with a mid-range price, combines to make this software a strong value for accounting firms engaged in retirement and estate planning.
J&L RETIREMENT PLANNER
The J&L Retirement Planner is a fast, simple retirement toolset based on the company’s financial planning system. It’s an inexpensive solution that focuses specifically on retirement decisions, with less emphasis on pre-retirement life goals.
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 last year, 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 IRS basis and implementation of college savings and early distribution programs established by the IRS, in Rule 72t; and handling of requirements for the IRS required minimum distributions at ages 59-1/2 and 70-1/2.
The Professional version, which is only slightly more expensive than the personal version, 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 track an investment’s total returns (realized and unrealized gains, dividends, and cost basis); customize up to 24 reports and financial graphing; and export data to spreadsheets and databases.
J&L Retirement planner is not as polished as some of its competitors, but it does handily keep pace with them in terms of its output and calculations. It provides a diversified but well-focused presentation of retirement plans at a cost that is certain to be attractive to accountants and their clients.
MONEY MINDERS FINANCIAL PLANNING SPREADSHEETS
Money Minders is a spreadsheet-based application built for Microsoft Excel and offering an excellent set of templates for accountants familiar with Excel and desiring to take a stronger hand in the development of plans and presentations.
The 25 templates included for the area of retirement planning 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 retirement; funding requirements for joint retirement; IRA projections; Keogh account projections; monthly illustrations of the retirement savings plan; IRA plan minimum required distributions; money purchase pension plans; pension salary calculations; projected growth of a tax-sheltered versus an open investment; a retirement calculator; and many more.
Other templates address pension plan forecasting, funding requirements for retirement, and a set of estate planning templates that address such topics as long-term care analysis, critical illness needs analysis, disability needs analysis and estate capital needs analysis.
The approach taken by the Money Minders Financial Planning Spreadsheets may not have the panache of a stand-alone application, but they can offer a number of features that competitors can’t match — in speed, flexibility, customization of reports, and the power of MS Excel as its primary engine. Priced at the mid-range and offering updates four times a year, this solution will have strong appeal for spreadsheet aficionados.
NAVIPLAN STANDARD AND EXTENDED
NaviPlan is the exception to the rule — a product that is currently undergoing a major evolution that will begin to appear in the marketplace in June of 2008. It is presented in three varieties — a Standard version, an Extended version, and a suite that includes both of those versions in a bundle. In addition, both versions are offered as online solutions via NaviPlan Central.
The retirement-planning capabilities of the two 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 report is designed to educate individuals at or nearing retirement on strategies to achieve their retirement goals and account for potential risks.
In the new Version 11.2, an in-process review uses an update-plan feature to allow advisors to revise incomes, expenses and the current market value of assets, and then illustrate with text and graphics whether the client is still on track to meeting their pre-defined goals in an informative new progress report. And the number of asset classes has been bumped from five up to 12.
NaviPlan Extended provides advanced estate planning, business planning that may be critical for retirement income generation and succession planning, and tax planning. And there is a new “traffic light” cash-flow deficit/surplus tool on all Scenario Manager pages to immediately flag when a plan will show a cash-flow deficit. It has been upgraded only modestly in its most current version, but has added an expansion of asset classes from five to 12. Version 11.2 of this product will likewise be available this year.
NaviPlan is one of the strongest retirement planning applications on the market today, enabling planning at different levels depending on the needs of the client. Flexible, stable and priced in the mid-range, it does an excellent job of addressing nearly every scenario a planner may encounter.
Profiles Professional is also undergoing an evolution at the hands of EISI. In Version 9.0, scheduled for release in June of 2008, this world-class toolset will add the 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 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 new version, the focus has been 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 plan.
Profiles Forecaster, evolving in June to 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 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.
Profiles Professional and Profiles Forecaster are excellent retirement planning tools offered both as desktop applications and through an online application service provider version through Profiles On Demand. Their new versions continue to expand both capabilities and flexibility, while maintaining the consistency and strength that have built them one of the most loyal followings of any planning product.
QUICKEN RETIREMENT PLANNER
Sometimes planning is less about power and features than convenience. For accountants who want a very fast and effective plan but don’t need the scenario building and other advanced features, the retirement planner built into Intuit’s Quicken is of interest.
Located under the planning menu on the main screen, it 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 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 plan.
It also offers the ability to quickly address different 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 has not changed since the 2007 version, but its foundation has — Quicken is now available in an online version, and via mobile devices. And as noted in previous reviews, the fact that it is associated with a consumer-oriented financial platform shouldn’t work to its detriment. This is a low-cost, flexible and convenient system created with the assistance of the Financial Planning Association. And for many accountants, it is the perfect quick-and-dirty solution to client planning needs.
ViewPlan Advanced is a robust and full-featured estate planning solution that enables practitioners to create unlimited planning scenarios and graphically compare up to three estate-planning scenarios with 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 a huge variety of trusts and other vehicles, such as charitable remainder annuity trusts, installment sale private annuities, and many, many more.
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 technique.
ViewPlan Advanced provides very capable planning capabilities that are enhanced by the tax planning features available through the CCH ProSystem fx family of products. With updated federal and state law builders that allow change planners to modify federal and state tax rate assumptions, it remains one of the most powerful and extensive systems on the market.
Dave McClure is the president of Kent Associates, in Alexandria, Va., an independent testing laboratory and evaluation service.
Brentmark Software Inc.
Pricing: Retirement Plan Analyzer — single-user, $595 plus annual maintenance after six months; 10-user site license, $1,190 plus annual maintenance after six months. Kugler Estate Analyzer — same pricing.
BNA Estate and Gift
Pricing: Base license — $1,495; renewal — $835. Additional up to nine — $205 each; renewal — $205 per year. Over 10 licenses — $102.50 each.
J&L Retirement Planner
Pricing: Retirement Planner — $99.95; Professional — $139.95.
Money Minders Financial
Money Minders Software
Pricing: $589; annual renewal — $169 per year.
NaviPlan Standard and Extended
Pricing: Annual single-unit subscription — NaviPlan Standard, $799; NaviPlan Extended, $1,299; NaviPlan Suite (includes Standard and Extended), $1,699.
Systems (USA) Inc.
Pricing: Annual license — desktop, $1,049; Web, $150 extra. Monte Carlo, Advanced Estate Planning and Security Classifier options extra. Profiles Forecaster 4.0 — $599.
Quicken Retirement Planner
Mountain View, Calif.
Pricing: Starts at $49.95.
CCH, a Wolters Kluwer business
Pricing: Starts at $1,759.
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