It is usual for most adults to start thinking about their retirement early in life in readiness for when the grey sets in. People want to live their advanced years in comfort and not struggle. This drives many people to sleepless nights until they seek professional advice from their financial advisors. Financial advisors rely on many software retirement programs where they take into account all of the client’s hopes, dreams, and needs. They then mold these into different potential financial scenarios.
As a financial advisor, the benefits derived from using software to plan for retirement is that it acts as a valuable client education tool. It shows your clients how to meet their retirement goals and discusses any changes that need to be made to realize these goals and when to make them.
Consider the following steps before selecting any retirement software
- Cash flow-based vs. Goal-based
The retirement planning software market is flooded with lots of financial planning software. Most of these are either goal based or cash flow based. The difference is that goal-based software cares for the way a client lives their lifestyle. They target specific goals that the client may want to achieve in retirement. They can be based on health care, financial security, or on wants like travel expeditions and leisure trips. A goal-based feature taps into the ‘client’s dreams and hopes.
For cash flow based programs, the main focus is in the flow of cash into and out of the ‘client’s life. It is more complex and labor-intensive based on client wages, investment returns, and taxes. In this program, every dollar must be accounted for hence suited for detailed and precise plans.
- Type of model
Different financial planning software has different model projections. While some may use a linear model that assumes a static rate of return for years, others are more complex and provide simulations that project a variety of outcomes. These simulations allow your advisor to stress test different scenarios and advice based on a ‘client’s risk tolerance or the ability and willingness to adapt.
- Advanced client interactivity
It is confusing to understand how a financial advisor settled on the crunched numbers when they present them to you like back in the old days. But when using financial planning software, the client and the advisor can have a meet and go over the planning process together. Most software is advanced and may offer a client portal where the client can log in and have a glance at their retirement plan process.
- User-friendly and free trials
Before settling for one particular program over another, you may want to test it out first. While at it, check how difficult or easy it is to use and know the limitations of the program. Most of these software packages come with demos, and some may offer free trials to give you a taste of how the software operates.
Finally, consider the cost of different software and know what features set them apart that may warrant a difference in prices.
