Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Retirement Planning > Retirement Investing

Shifting retirement landscape drives financial software innovation

Your article was successfully shared with the contacts you provided.

Financial planning software is only as good as the advisor who uses it. However, it is an indispensible tool to a successful boomer retirement. The first thing good financial planning software – and the advisors who use it – should recognize is that retirement isn’t a single phase. Retirement is a series of phases, and a client’s needs are different in each phase. Activities change, expenses shift, grandchildren are added to the litter. What a person wants and needs at 65 years old is different than what that same person wants and needs at 80.

“Good software has to be able to handle a phased retirement,” says Gregg Janes, vice president, product management-planning, Emerging Information Systems Inc.,, Carlsbad, Calif. “Retirement needs are different for someone who is 65 to 75, 75 to 85, and 85 or older.”

Janes, who runs the planning side of the Profiles product line for EISI, breaks retirement into three phases based on the age groups he highlights above, affectionately called the go-go years, the slow-go years and the no-go years. As a person advances in retirement, he will travel less, spend more money on health care and begin thinking about what kind of legacy he wants to leave. That requires flexibility in planning from the advisor and the software he chooses.

Pierre Bossaert, vice president, financial planning, AdviceAmerica,, Fremont, Calif., uses four phases to describe retirement: early, middle, late and survivor. And he says software needs to be able to account for the expenses and cash flow in each phase. He says the survivor phase (something his company’s Retirement Income Edition handles) is especially important because income streams can change dramatically. The death of the former primary wage earner can mean cuts in Social Security income, pension payments (for those fortunate enough to have them) and annuity payments. Good software can help determine where the income for the survivor is going to come from, and how much can be expected.

An innovation is coming, Bossaert says, that will save advisors and clients time by using readily available expense information to make more accurate assumptions. The Bureau of Labor Statistics conducts regular surveys of consumer spending that it compiles into a Consumer Expenditure Survey.

“We will be able to utilize that in software by looking at an individual client vs. the national average,” Bossaert says. “It gives an indication of if they are high or low. We want to be able to use rational expense assumptions.”


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.