There is no shortage of technology solutions to help with retirement planning. Some are comprehensive packages that do — or promise to do — many things; others are more modest in their goals.
There is no shortage of technology solutions to help with retirement planning. Some are comprehensive packages that do — or promise to do — many things; others are more modest in their goals.
I have come across two interesting tools in recent weeks, both of which fall into the modest category. Both are calculators: One comes in the form of installable software, and the other is available on the web.
Ilene Davis, principal of Financial Independence Services, a Cocoa, Fla.-based firm that manages $50 million in assets, has created a -personal-computer software tool called the Not Just For Retirement Calculator.
It is an all-around retirement-planning tool whose ease of use and speed make up for the fact that it breaks no new ground in devising retirement income solutions.
"Our calculations have been around for years; they're in just about every personal-finance or investment textbook I've used," Ms. Davis wrote in an e-mail.
She said that she has been focused on retirement income distribution for more than 20 years, and designed the calculator to help in her work.
Since the industry as a whole hasn't been as involved in distribution issues to the degree that she has, Ms. Davis thinks that many advisers will find the calculator helpful because it is so much easier to use than other financial planning software when performing the same calculations.
Just click on the calculator icon, and the image of something that looks like an old-style Texas Instruments calculator pops onto the screen. But the "buttons" are all designed specifically for advisers.
Yellow buttons are used to calculate the future value of a single lump sum amount.
Blue buttons are used to provide an answer to the question: "I have $X available to finance retirement. How much can I afford to spend without running out of money?"
Green buttons allow users to do two calculations: the future value of an investment made over several years or the amount that would need to be invested to produce, generate or replace an annual amount for two or more years.
Finally, red buttons are used to calculate the current value of a lump sum to be received in the future.
Larry Davenport, a registered representative with OFG Financial Services Inc., a broker-dealer headquartered in Topeka, Kan., said that he finds the calculator to be a good tool to have on his laptop.
"With it, I can do quick calculations with clients without having an Internet connection, so I really like the portability of it," he said.
The calculator costs $50, and there are no annual fees. Further information is available at njfrcalculator.com.
"It's easy for people with $1 million or $2 million in assets to find a financial adviser," said Lewis R. "Randy" Gridley, head of Gridley Associates Inc., a fee-only financial planning firm in San Francisco that manages $50 million in assets.
"But it's really tough for those with less than $500,000 to go to a planner, especially if half of that is tied up in a 401(k). It's for these folks, who are right on the cusp, that BoulevardR.com is designed for," Mr. Gridley said.
BoulevardR.com is a website that he and software entrepreneur Matt Iverson developed to help the mass affluent. It offers a free five-step process that produces a retirement strategy.
In essence, the site is an automated, engaging and interactive questionnaire that lets users come up with a very basic plan at their own pace and think about retirement in concrete terms.
"I started this without realizing it while helping my father figure out drawdown rates on his retirement income," Mr. Iverson said. "I came to the realization that there just really wasn't anything already out there available to people without a financial adviser."
Variously defined as those with total assets between $100,000 and $1 million, the mass affluent represent an underserved market segment in the financial planning community, Mr. Iverson said. While many advisers and analysts acknowledge that this group may offer big potential for advisers in general, few see the mass affluent as the key to their own successful adviser practice.
BoulevardR.com has a straightforward, easy-to-follow and quick online tutorial that asks specific questions about saving and spending, such as: "How much do you spend on eating out in a week?"
While the site will be free for the next few months, ultimately, users will pay a fee, probably based on referrals from financial advisers or partnerships with financial services companies.
"Right now, it is a basic calculator," Mr. Iverson said.
"As we go on, we'll be adding features and checklists based on the demographics provided by the users," he said. "People will come for retirement planning, but we'll provide other practical information."
One possibility is helping people determine their disability insurance needs, Mr. Iverson said.
Davis D. Janowski can be reached at djanowski@crain.com.
