Baby boomers reaching the retirement finish line often have an armful of investments, retirement plan assets and other income sources. At this point, many turn to financial advisers for help in figuring out what kind of income stream they can expect for the next 25 years.
The complexity of corraling all of a client's income sources has spawned a variety of new tools and services to help advisers translate investors' assets and investments into a cohesive plan. Other apps help advisers estimate expenses in retirement, while still others simplify the tough task of choosing the best annuity for a given situation.
Here are nine that advisers might want to consider:
1. -LIVING BENEFIT CALCULATOR FROM LBCALC LLC
A tool that compares fixed indexed annuities to their variable annuity cousins, the Living Benefit Calculator suggests a handful of annuities of both varieties to advisers, based on a client's circumstances. Considering the client's age, the state in which the annuity will be issued, the size of the initial deposit and whether the money is qualified or nonqualified, the program retrieves a list of annuities and depicts the highest and lowest guaranteed benefit the client could receive.
The Living Benefit Calculator displays a snapshot of annuity data, including the name of the carrier, its rating, the associated fees and surrender periods, as well as the income a client could get if he or she elected to take it at 65 or opted to defer.
Users can link to a brief description of the suggested policies and riders for a greater breakdown of fees, guaranteed credit rates, step-ups and investment restrictions.
Living Benefit Calculator: lbcalc.com
2. -INCOME DISCOVERY FROM FIDUCIOSO ADVISORS INC.
A large portfolio of retirement assets is not necessarily a viable solution to a client's retirement income needs. Enter Income Discovery, a program that comes up with potential income strategies for investors, based on whatever basket of assets, pensions and other possible sources they have.
Advisers using the program can enter client data, taking into account assets, the amount of Social Security benefits the client expects to receive and the amount of income desired over a given period. Income Discovery depicts how the client's success rate would look if he or she opted for systematic withdrawals alone and shows advisers how it can improve outcomes using fixed or variable annuities, or strategies such as bond ladders.
Advisers can input data on variable annuity fees and investment allocation to get a sense of how a VA would fit in with other assets.
Using customized market assumptions, Income Discovery models strategies to give advisers an idea of how long a client's income strategy might last amid a bad market and the success rate with each configuration of products and assets.
Income Discovery: incomediscovery.com
3. -ANNUITY INTELLIGENCE FROM MORNINGSTAR INC.
Variable annuity nerds rejoice: Morningstar Inc. has a tool that has simplified the variable annuity research and comparison process for advisers.
Launched in May, Annuity Intelligence combines aspects of the research company's Annuity Analyzer and Annuity Intelligence Report to allow advisers to dig up VA contracts, view them alongside one another and create reports.
In the past, advisers had to go to different screens and pull up individual contracts, according to Kevin Loffredi, vice president of annuity solutions at Morningstar. This tool allows them to have all the information on one page when comparing contracts and guaranteed benefits.
VA info is centralized, so advisers can pull up a VA contract from the database. Fee data, contract operation and spousal-benefits information is available at a glance. A tab displays the available living and death benefits, and how they are affected by account withdrawals. A subaccount tab shares information on available underlying funds, including return and rating data.
Advisers also can conduct searches of lifetime-income benefits and use the program's calculator to see how much guaranteed income a client will get from a benefit, based on a variety of criteria.
Morningstar Annuity Intelligence: corporate.morningstar.com (click on “products”)
4. -RETIREMENT OUTCOME FROM ACHAEAN FINANCIAL INC.
Ever wonder whether the retirement plan you have sketched out and the products you'd like to recommend will withstand the test of time?
Achaean Financial's Retirement Outcome gives advisers and clients an idea of how long their wealth will last during the retirement income phase, considering not just the asset class allocation of a client's investment portfolio but also the expected length of that person's life.
Income sources, including current annuity holdings and pension plan payments, are also incorporated into the projections, which are adjusted for inflation.
Clients expecting to receive a certain amount of income per year can see exactly how their holdings need to be positioned in order to obtain that income and continue their lifestyle. If it looks as if clients will run out of assets too early, advisers can see what adjustments need to be made: Would allocating some money into a fixed annuity help? If a client chooses to put some money into an annuity, how might that affect the plan's expenses?
Retirement Outcome was introduced this June and is available to broker-dealer firms, according to Michael Henkel, president of Achaean. The firm already is branching out into the world of tablet devices, working on a version of the program for advisers on the go.
Retirement Outcome: achaeanfinancial.com
5. -VISIBLECHOICE 3.0 FROM INSURANCE TECHNOLOGIES LLC
VisibleChoice 3.0, released this month, is the latest version of annuity software from Insurance Technologies, this time featuring new mobile capabilities.
The program, being marketed to broker-dealers, automates the often-arduous suitability review and due-diligence process behind variable annuity recommendations.
This can be an especially useful tool, given that only this summer the Financial Industry Regulatory Authority Inc. handed firms and advisers even more responsibility for ensuring the suitability of their recommendations.
VisibleChoice 3.0 harvests annuity sales data and gives firms an idea of which products are being used — and what's being replaced — in the marketplace. Broker-dealers and their advisers also have access to product data and can provide comparisons for all types of annuities.
Finally, the program is now accessible from multiple devices, which lets advisers take the program to client meetings. VisibleChoice 3.0 also enables e-signatures from the road.
VisibleChoice 3.0: insurancetechnologies.com
6. -RETIREMENT ILLUSTRATOR FROM FISERV INC.
Clients sometimes need to see how long-term-care coverage, life insurance and annuities can improve their retirement. That's where Fiserv's Retirement Illustrator comes in.
This program drafts “what if?” scenarios based on historical performance data for a variety of asset classes.
For instance, advisers and clients can see how an annuity with an income benefit feature performs under a number of market conditions. Advisers can run these scenarios and compare the outcomes with clients.
A plethora of colorful charts show clients how market performance and expenses in retirement will affect their income and portfolios.
Investors also get a breakdown of how to adjust their portfolios to improve outcomes and match them up with the recommended model.
Retirement Illustrator: fiserv.com/retirement-iIllustrator
7. -GOALGAMIPRO FROM ADVISOR SOFTWARE INC.
Advisor Software's goalgamiPro gives advisers a snapshot of client goals and financial resources to determine whether the investor's dreams — be they enjoying retirement or paying for college — are within reach, and if not, what needs to change to make them attainable.
The web-based solution creates a balance sheet at the household level, and specifies members of the household, as well as the accounts and assets they bring to the plan.
Clients then list their goals, which can range from the mundane, such as meeting living expenses in retirement, to lofty, such as covering a grandchild's college education or taking a once-in-a-lifetime vacation.
The program shows not only what the client can cover with existing resources but also how much the household can afford to lose while remaining on track to meet its goals.
This program is also interactive with clients, allowing investors to develop their own goal plans and share them with financial advisers.
goalgamiPro: advisorsoftware.com
8. -RETIRE LOGIX FROM FINANCE LOGIX
Retire Logix, an interactive financial planning app by Finance Logix, largely targets investors preparing for retirement, but advisers should still have it on their radar.
Released in March, the mobile app gives investors a quick overview of whether their assets, pension and Social Security benefits can cover their expected wants and needs during retirement. Projections take into account returns, taxes and inflation. Users also can adjust their assumptions to change their predicted outcome.
In May, Finance Logix, a division of Oltis Software LLC, teamed up with the Financial Planning Association to bring advisers into the equation. As a result, users can tap into the FPA's PlannerSearch database of some 6,000 members.
Retire Logix: retirelogix.com
9. -MONEYGUIDEPRO FROM PIETECH INC.
MoneyGuidePro, web-based financial planning software, is an oldie but goodie for advisers, having been fully available on the web since 2001.
This program lets advisers map out clients' retirement goals and expected costs in order of importance.
It also takes stock of assets, including clients' expected income from Social Security, pensions and investment holdings. Insurance policies, including long-term-care coverage and life insurance, are inventoried but not included as assets.
MoneyGuidePro considers clients' appetite for risk and shows them where they stand relative to others in their age group.
“What if?” work sheets measure the probability of success after a Monte Carlo simulation and a number of stress tests are performed on the client's financial plan. Clients can take action and adjust assumptions to help shape results.
In late July, PIEtech Inc. released the latest version of the program, called G3. Aside from updating projected return data, the revamp adds Smart Alex, a computer assistant that can explain the most important features on each page.
The latest version of MoneyGuidePro also takes into account Social Security strategies for spouses, weighing options such as “file and suspend.”
MoneyGuidePro: moneyguidepro.com
