United Income, a digital investment advisory firm designed for investors 50 and older, has introduced a “total wealth return” solution that analyzes the impact of taxes, advisory fees and retirement benefits, including Social Security and investment withdrawals, in order to maximize retirement income.
CEO Matt Fellowes says the new solution is a “first step” to shift competition within the advisory industry from measuring investment performance to generating wealth. It provides each client [United Income calls them “members] with the amount of wealth United Income has generated from tax savings, investment strategies and retirement benefit management and estimates expected future taxes on account trades and withdrawals as well as investment-related fees.
United Income is calling on regulators to adopt this approach for the rest of the investment industry.
The new total wealth return solution simulates 81 different Social Security claiming strategies, which can be used to analyze whether claiming Social Security early and protecting investments makes more sense for an individual client than drawing down investments and claiming later, which is a popular recommendation among advisors.
United Income found that while the optimal claim age is 70 for 82% of the firm’s current members, it varies between age 62 and 69 for the rest. It found even more variations when it considered households instead of individuals.
Then new total wealth return solution also analyzes the tax consequences of different strategies, including those for Social Security optimization, investment management and account withdrawals.
Traditional drawdown strategies often start with withdrawals from taxable accounts and proceed with withdrawals from tax-deferred accounts, then tax-exempt and finally Roth accounts, but those standard strategies don’t work for all retirees. The firm’s “optimizer” found that 20% of members — what it calls clients — benefit from a drawdown order that’s different from the standard one.
The new solution also compares advisory fees from a member’s previous advisor to the fee they pay at United Income, whose asset-weighted average is 0.59%.
Anyone can create a free United Income account to get a free financial plan and see the projections for themselves at no cost.
United Income has $21.48 billion assets under management in 65,194 accounts, according to the latest Form ADV from June.
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