Spouse name and comments

Question:

How do I enter the information to see the spouse's full name and my comments on the final report?

Answer:

On the Forecast page, on the General tab, select the Option to do a calculation for both spouses. The page will refresh and show a drop down box for selecting each spouse. Select 'Spouse (2)' and enter the spouse's name.

You can add plain text commentary in the report on the Report tab of the Options page.

By: RetireWare / Equisoft On 11:28 AM

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What happens in year of death

Question:

It would be helpful to understand in some detail what the Retireware processing and assumptions are for the year of death. This is particularly so in the case of death of one spouse years before the other in a joint plan. I haven't come across this documented anywhere, and am having some difficulty interpreting our plan results.

There seem to be a range of options in the real world, particularly for the registered funds, which can be transferred to the surviving spouse without taxation.

I guess one approach for the program, the most conservative case, is to handle the death of one individual as an independent event - the remaining balance of registered funds are liquidated and the full value taxed, and the non-registered investments are liquidated and the realized capital gains taxed. The total resulting after tax value can then be handled in a variety of ways.

Then if by will and/or legal requirement some or all of that remainder is left to the surviving spouse, then that amount can be explicitly added by the user (ie me) back into the estate of surviving spouse as special case income.

In any event once I better understand what the program is assuming then I can do whatever is necessary to handle the numbers as per the will and estate plan.

Answer:

It's as you describe, on the first death, registered and locked-in funds flow tax-free to the surviving spouse. For non-registered funds and property other than the personal residence, the after-tax value goes to the surviving spouse. So it's assuming that the spouse leaves everything to his/her surviving spouse. There is no option in the program to allocate a portion of the estate currently.

By: RetireWare / Equisoft On 11:20 AM

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DIY Version

Questions:

Looking for retirement planning software for personal use, but with a level of sophistication. Does your software:

• Perform detailed tax calculations based on the Canadian Income Tax Act?
• Support income by type (earned income, investment income – dividend [Cdn and foreign], CG, CPP, OAS, etc)
• Track assets over multiple investment accounts – registered, non-registered etc.
• Allow for multiple family members (husband/wife) and track them separately (especially for tax purposes)

Answers:

Yes, the tax calculations are accurate. The type of investment income calculated depends on your asset allocation. Based on this, the program allocates investment income among interest, dividends and realized and unrealized capital gains.

Your assets are divided according to type: registered, locked-in, TFSA and non-registered. You cannot enter each account separately (for example, if you have two RRSPs).

The program calculates other types of income such as pensions, CPP, OAS. However, it does not show separately the various types of investment income year by year, only as a whole.
You can do a combined plan for you and your spouse.

If you subscribe, you will get a refund within the first 30 days if it does not meet your needs. In order to get your refund, simply email support@retireware.com.

By: RetireWare / Equisoft On 11:17 AM

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Question:

When completing annual updates and considering inflation, is it necessary to increase the income objective, CPP and indexed pensions to the current payment amount?

Considering a joint retirement plan with different time horizons, how are the assets of the person with the shorter time horizon treated?  Are they treated as a spousal roll over or deemed disposed of?

I notice that TFSA assets appear to be disposed of. Is there a way to have them transfer to the survivor?

Answer:

Assets are rolled over to the spouse if the plan combines the financial information of spouses. If there's life insurance, you can direct it either to the spouse or a beneficiary on the Financial Information page.

First update the date of financial information on the Forecast page. If the income objective is in terms of a dollar amount, the program will project it from the date of financial information to the retirement year, so there's no need to update it.

For the CPP, if you entered a monthly amount, and indexed pensions, you should update it to the current amounts.

By: RetireWare / Equisoft On 11:22 AM

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Using RetireWare for fee-only practice

Question:

I'm in the process of trying to scale my fee-only/advice-only planning practice. With enough clients that I'm reaching significant overload, I'm looking into Canadian planning software that I can use for my clients - but not necessarily with my clients.

Answer:

If you use the professional version, you create and control the files and your clients do not have any access.

The collaborative version has more CRM functionality, such as exportable client lists, but not to the extent of exchanging information with billing and other CRM systems. For the collaborative, you can turn off the social media and referral components.

By: RetireWare / Equisoft On 5:06 PM

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Collaborative Version

Question:

I recently purchased your software and understand I could share it with my clients ( I bought the professional collaborative version with up to 200 files).

How can I do this and how does the client login?

Answer:

When you create a new file on the first tab of the File Manager (the landing page after logging in), you can enter your client's email address and send an automated invitation.

The invitation has a link where the user can choose a password to access their account. Once this is completed, the user can login and access a simplified version and work on or review their retirement plan.

I suggest you use a personal email to try and see the experience from the user's perspective. This will help in understanding how it works.

If you need further information, there are a few You Tube videos at the following link:

https://www.youtube.com/user/retireware

The videos can also be a helpful reference to your clients trying to get familiar with the user interface.

By: RetireWare / Equisoft On 11:28 AM

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Files

Question:

The description of RetireWare refers to limits on the number of "files" each subscription level is entitled to, but I don't see any explanation of what a file is.

I'm guessing it's a comprehensive report based on a single scenario or set of input data.

Answer:

A file represents a record in the database that holds the information of a financial plan for you and your spouse.

With 10 files you can create a few alternative scenarios (different retirement ages, income goals), and you can build plans for other family members or friends and save their information for future retrieval.

When you delete a plan, your file tally goes back up by one. You can access any of your files at will to modify, run or generate a report and this does not affect your limit of 10.

By: RetireWare / Equisoft On 11:15 AM

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Functionality

Questions:

1. Will the product allow me to prepare retirement income projections for my wife and me combined?

2. Assuming yes, will it allow different start times for her and my CPP and OAS?

3. Will it provide any optimization regarding when we should start drawing from RRSPs relative to
OAS and CPP?

Answer:

1. You can do retirement income projections for a couple for a common plan by entering separately the financial information for each.

2. Yes you can start CPP and OAS, or retire at different times.

3. The software does not optimize the retirement date that will be best for RRSP withdrawals relative to OAS and CPP. But you can run a few different scenarios to find a practical solution.

By: RetireWare / Equisoft On 11:10 AM

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Demo Account

Question:

Do you have a demo account that I can test drive?

Answer:

No, but you can purchase the version you want to try it and we will refund your payment in full within 30 days if you don't like it or find it not to be a good fit for your needs.

In order to get a refund, simply send an email at support@retireware.com and we will do the refund within one business day.

If you work for a financial services company and are looking for a vendor that does custom development, customization or white label versions of products, we do provide a demo account.

By: RetireWare / Equisoft On 11:10 AM

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Software Upgrade

RetireWare has been updated today with several new features that have been requested by users.

1. Excess funds to TFSA

In any year where there is excess income during retirement, i.e. income above the retirement income goal, the after -tax value of the excess funds are deposited in the TFSA account up to the available contribution room. Any excess then goes to the non-registered account.

Before this change, excess funds were deposited entirely in the non-registered account.

2. Showing spouse name on the "Spouse Bar"

When doing a plan combining the financial information of both spouses, a drop-down menu at the top of the page allows you to move from one spouse to the other for data entry and viewing results.

Now, the name entered on the General Information tab is showing for each spouse.

Before this change, the program used the generic identifiers "Spouse (1) " and "Spouse (2)".

3. Option to select age for RRIF and LIF accounts

On the Options page, you can select the age for starting withdrawals from the RRIF or LIF (locked-in) account.

4. Option to select amount payable from RRIF and LIF

Also on the Options page, you can select the type of payments from a RRIF (either the minimum or flat amount), or LIF (either the minimum, maximum or flat payment).

Note that with any of these options, the actual amount withdrawn in any year may be overridden by a higher payment if the selected amount falls below the minimum or more funds are required to meet the retirement income goal.

5. Option to purchase a smaller residence when disposing of principal residence

Finally, a common strategy is to downsize to a smaller residence at one point during retirement. With this new option, you can use part of the proceeds from the sale of the principal residence as a source of retirement income, and the remainder toward the purchase of a smaller residence.

By: RetireWare / Equisoft On 11:10 AM

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An Interview with NewRetirement

I was recently approached by the US website www.newretirement.com to answer a few questions about retirement planning and issues facing individuals nearing retirement. Here are the questions and answers.

Tell us about RetireWare … what does your software do? Who should be using it?

RetireWare is a Web-based retirement planning software that helps users understand how their assets and future income can create the lifestyle they want. I should mention that it is only for Canadians, because the software takes into account Canadian taxation and retirement savings programs. We plan to have a US version available, but only in 2016.

There are basically two versions, one for individuals who want to do their own planning and one for financial advisers. The version for individuals are usually financially literate persons who do their own investing and want to make their own decisions. They are a few years away from retirement or about to retire, and have significant assets.

Professional users get the same product, but the application has a collaborative component:  the adviser can provide an account to a client and the client can do their own planning, review or tweak what the adviser has done or vice versa. There are social media features that let users spread the good word about their adviser using email, Facebook, LinkedIn or Twitter.  This way, advisers can grow their referral networks online.

Advisers providing personalized retirement planning reports to their clients often find that there is low engagement with having a lengthy paper report. Having online access and being able to dabble is a great way to leverage technology and increase engagement. Moreover, monitoring the plan and keeping it fresh every few months really creates value for clients.

You’re based out of Canada … can you tell us some of the biggest headlines or trends for retirement in Canada? What are the most important issues right now?

I would think it's similar to the US. We have similar demographics, but Canadians have a longer life expectancy, so even more money will be required to fuel our retirements!

One trend is that 40% of baby boomers do not choose their retirement date. A large segment retire sooner than they wish because of job loss or health issues. Others must defer retirement and continue working because there's not enough money to fund their retirement.

Another trend is that the middle class is quite vulnerable. High earners have investments, pensions and real estate to draw from, and low earners are covered by Canada's "safety net". But the middle class struggles to accumulate significant assets and the safety net provides them inadequate protection.  This has been caused largely by declining employment pensions, which is now down to 25% of the active working population.

What are some best practices for determining how much an individual will need to save for retirement ? What are some common factors we fail to consider when coming up with a savings goal?

You need to calculate how much you'll need. It is an iterative process. Set your retirement income goals, then determine how much lifetime income you'll receive (such as social security or employment pensions). You must then determine if the money you expect to have at retirement will be able to fund the difference.

It sounds simple enough, and there are many free online calculators, some that are quite good,  that can help in this process.

But there are a few pitfalls: you don't know how much your investments will return and how long you (and your spouse) will live. As well, you don't know how much inflation there will be in the future.

So to complement this approach, many software products include a Monte Carlo simulation. We don't know how the economy will perform in the future, but we can simulate future returns and volatility of capital markets. We can determine our odds of success after doing a large number of random simulations. This information is very helpful to decide if our retirement income goals are adequate relative to the retirement assets.

Another approach is to "stress test" the financial plan for retirement for adverse events and see if the plan can deal with the main post-retirement risks, such as longevity, investment and inflation.

To sum it up, I like a "holistic" approach: one that looks at the plan from many angles. If all signals point to success, then the plan is probably good.

Why is managing risk so important to planning retirement? What happens if you don’t do it?

Risk management provides a framework around which we can make decisions.

When assessing risk, we determine its likelihood and magnitude. Armed with this information we can decide whether we want to apply techniques to reduce, eliminate, transfer, or retain each risk.

For retirement, a sound plan must examine each of the potential risks that can occur: market, longevity, inflation, health care costs, long-term care and early death.

Failing to plan is planning to fail, to repeat an overused cliché. The idea is to avoid catastrophic outcomes by having a plan of action to deal with each risk should it occur.

We don’t know about the rest of your clients, but when we hear the words “risk management” and hear references to math, we get a bit overwhelmed … especially as it relates to that giant sum of money we’ll somehow have to save leading up to retirement. What do you tell clients who are intimidated by the subject of risk management?

Risk management has come to the forefront in the last 10 years. Corporations have to evaluate all risks and it permeates all their decisions. Investors select an asset allocation that reflects their risk tolerance. When you buy home insurance you are managing risk: you pay a (relatively) small premium to protect yourself against a large potential expense (destruction of property and civil liability).

The Society of Actuaries (the body that qualifies actuaries and conducts research) has many excellent publications on managing post-retirement risks and it's a great starting point to learn about this. One I recommend is Managing Post–Retirement Risks–A Guide to Retirement Planning.

What do you think are the biggest oversights individuals make when it comes to managing risk in their retirement planning?

I think many don't appreciate their longevity risk. While we all wish for a long life, the "risk" of living too long is running out of money, especially at a time when assisted living and long-term care can become a real possibility.

A good strategy is to try to cover essential expenses (rent, food, health care, etc.) with sources of lifetime income, such as social security and annuities. Then cover discretionary expenses (e.g. travel and lifestyle expenses) from invested assets. This approach lets you control a good share of your money and leave what is left to your heirs.

What do you think are the biggest challenges facing individuals nearing retirement today?

The biggest challenge is knowing if there is enough money to maintain our standard of living. This creates uncertainty and doubt, and the outcome is that we tend to be overly conservative with our spending. Having a reduced lifestyle is losing the opportunity of enjoying life to the fullest after a lifetime of hard work, raising a family and contributing to society.

That's why we need to put numbers behind our dreams and see the possibilities that the future holds.

How will retirement for Baby Boomers and after look different from those of our parents and grandparents? 

Baby Boomers have a much longer life expectancy than the previous generations, in part due to lifestyle changes and advances in medicine. Life expectancy has increased more than 6 years since 1980.

Longer life coupled with a longer healthy lifespan also means that expenses during retirement will be significant for many, with travel, vacations, sports and hobbies.

Another difference is that defined benefit pensions have all but disappear other than for civil servants. This means that they have to invest their funds and decide how to use these funds for retirement income.

The good news is that technology and the Internet facilitates the dissemination of information on investing and retirement planning, including many excellent software products in Canada and the US.

By: RetireWare / Equisoft On 9:30 AM

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Collaborative vs. Professional Version

Questions:

My understanding of RetireWare is that the Professional Version is used by the financial professional to prepare a retirement plan for the client. The client is then not able to access the plan to update its progress. Is that correct?

My understanding of the Collaborative Professional Version is used by the financial professional to prepare a retirement plan for the client, but the client is then able to access the plan via the web to update its progress and view the information. Is that correct?

In your experience, given that my above understanding is correct, which of the above approaches is the one that has met with the most success?

Answers:

Your understanding of the difference between the Professional and Collaborative versions is correct.

With RetireWare, you will get a financial plan for retirement that includes a cash flow forecast, odds of success, assessment of the exposure to each of the main post-retirement risks. The output is the same regardless of the product between the Pro and Collaborative version.

Note that with the Collaborative version your users get a simplified version and reports in order not to overwhelm them with too much complexity and details.

For a recommendation, the Pro version is more suitable if you want only to create reports and transmit a PDF to your clients. If you want to build a user base from online referrals, then the Collaborative version is the way to go.

By: RetireWare / Equisoft On 8:05 PM

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Differences Between Professional and Collaborative Versions

Question:

My understanding of the RetireWare software is that the Professional Version is used by the financial professional to prepare a retirement plan for the client.  The client is then not able to access the plan to update its progress. Is that correct?

My understanding of the RetireWare software is that the Collaborative Professional Version is used by the financial professional to prepare a retirement plan for the client. The client is then able to access the plan via the web to update its progress. Is that correct?

Answer:

Your understanding of the difference between the Professional and Collaborative versions is correct.

With RetireWare, you will get a financial plan for retirement that includes a cash flow forecast, odds of success, assessment of the exposure to each of the main post-retirement risks. The output is the same regardless of the product between the Pro and Collaborative version. Note that with the Collaborative version your users get a simplified version and reports in order not to overwhelm them with too much complexity and details.

The Pro version is more suitable if you want only to create reports and transmit a PDF to your clients. If you want to build a user base via referrals, then the Collaborative version is the way to go.

By: RetireWare / Equisoft On 4:31 PM

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RetireWare Versions and Calculations

Questions:

1. What is the difference in the level of detail and complexity of analysis in the retirement plans between an individual user and an advisor user besides the number of different plans that can be created?

2. What do you do for tax rates?

3. Can I see reports that separate my registered investment accounts from the margin accounts? Does the margin acct report show the adjusted cost base as well as the projected market value?

4. Can I update the plan annually by entering say December 31st market values?

Answers:

1. There are three version: individual (DIY), Professional and Collaborative. The retirement plans are identical, only the number of files vary. In addition, you can provide online access to files to clients and prospects.

2. The retirement forecast uses accurate income tax in the calculations.

3. The cash flow for each type of assets is shown separately in detailed tables in the results. The margin account does not show the evolving adjusted cost base (ACB) over the years, but the calculations do take into account the ACB.

4. Yes, you can update the plan using the Update Wizard or accessing the detailed or quick planner at any time. If you don't use the Update Wizard, just ensure you revise the date of calculation to a recent date in the General Information page.

By: RetireWare / Equisoft On 4:31 PM

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Copy Functionality

A new feature has been added today!

Now you can copy an existing file to do what if scenarios or try different retirement strategies and evaluate their financial impact. For example, you can copy an existing file and try a different retirement age, life expectancy or income goal with the new file.

The file copy feature is on the first tab of the File Manager (landing page after logging in).

Enter the file ID of the file you want to copy and click the Copy button. A message will confirm the successful completion of the copy operation, an your file will appear in the file list. You can then select it and work on the file copy. The word 'COPY' is appended to the last name in order to differentiate it from the original.

By: RetireWare / Equisoft On 12:56 PM

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Common Settings

Features Update

Data entry is made to be as uniform as possible for each spouse to make it easier to find all settings.

We have a new release in which we apply changes to both spouses to avoid the need to enter the same information twice in the following areas:

• CPP marital status
• CPP sharing and CPP sharing common years
• Pension income splitting
• Economic basis
• Monte Carlo settings
• Risk analysis settings

With this change you no longer have to change these common values for each spouse when you prepare a retirement plan that combines the financial information of both spouses.

If you make any change to these settings to one spouse, they will be applied to the other spouse.

By: RetireWare / Equisoft On 12:55 PM

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RetireWare Not Affected by "Heartbleed" Vulnerability

There has been extensive media coverage recently on the vulnerability dubbed “Heartbleed”, which is a security concern for secure communications using OpenSSL, a widely-used open source cryptographic software library.


It can allow attackers to read the memory of the systems using vulnerable versions of OpenSSL library.


The RetireWare Website and applications run on Microsoft Web servers, which use their own encryption libraries for secure communications, not the OpenSSL library.


Accordingly, secure communications on the RetireWare Website are not at risk for the "Heartbleed" vulnerability.


For more information, please contact RetireWare Product Support.

By: RetireWare / Equisoft On 4:52 PM

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Update Wizard

Question:

One question on the “Update” feature.  I haven’t used it yet but just trying to figure out what happens when you use it. 

So say you update all the financial information and any changes that might need to be done with assumptions, etc.,  does the program then use those numbers and the date (for example if I updated the financial information to February 28th) and project the year-end results for this year based on 10 months of returns / expenses?

If you use the update feature I assume it changes the “date of financial information” to the current month. Correct? If you just go in and make changes to the data then it will be using the previous date for calculations unless you manually change the “date of financial information”. 

Basically the update feature seems to be an automated feature that adjusts the date for calculations and allows you to update the financial information. 

If you need to do more than that then you can go into the other sections to do that.

Answer:

This is correct. The Update Wizard gathers all main and changing data entries in one location (mostly asset values), and updates the date as you describe.

If you use the Detailed or Quick retirement calculations, you must change the date manually.

If you go through the Update Wizard, you can always go in the Detailed Retirement calculation and change the date back if you wish. It is not cast in stone. However, it's best to update the date if you update the market values.

By: RetireWare / Equisoft On 10:39 AM

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Registering for the Free Version?

If so, you can join my Leader's Group and get access to RetireWare retirement planing software.

My Leader's Group is temporary and will be closed in the fall of 2013. Your account is set up so as to keep your information private and I cannot access it without your permission.

While we build our Leaders directory, you have the option of joining my (temporary) Leader's Group. You can decide later to join another Leader's Group or get the paid version.

If you would prefer not to be in my Leader's Group, send an email to info@retireware.com. You will then become an unattached user. You can use the retirement index tool and all other stand-alone calculators, but not the RetireWare retirement planning application. The application will only be available to those joining a Leader's Group.

Please note that I do not give financial and retirement planning advice, recommendations or anything to do with investing. I only provide direction on the use of the software.

Best,

Marc Des Rosiers, FSA, FCIA
President

By: RetireWare / Equisoft On 4:38 PM

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Data Security

Question:

I'm a bit concerned about having personal data stored on-line. How accessible is that data to both Retireware employees and general public?

Answer:

All data is encrypted when stored to the database and decrypted only at time of use by the RetireWare application.

So the database administrators, who have access to the database, would only see encrypted data fields and have no way of making sense of the data.

Similarly, while there are numerous security measures to prevent hackers from getting access to the database, should it ever occur, all they would get is encrypted data.

Data is stored using a powerful encryption algorithm that meets the Advanced Encryption Standard (AES), a specification for the encryption of electronic data established by the U.S. National Institute of Standards and Technology (NIST). AES has been adopted by the U.S. government and is now used worldwide.

The encryption algorithm we use is almost impossible to decrypt.

In any case, we will never access your data unless you give us permission to do so to handle a support request.

There is more information on our security page:

https://secure.retireware.com/security.aspx

By: RetireWare / Equisoft On 9:38 PM

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