infoTECH Feature

July 22, 2020

Technology For Financial And Retirement Planning

The internet and technology in general have upended many industries over the past 30 years. Not many industries are immune, and that includes the financial and retirement planning industry.

The financial industry was once an industry of back room deals, brokers making lots of trades, and traders running around a hectic floor. It was also an industry full of financial advisors who have charged exorbitant fees for managing people’s money. Most people had no idea how financial markets worked and were more than happy to pay hefty fees to an “expert” who would surely get them their money’s worth.

But a lot started to change when companies like Vanguard started offering discount trading and index funds that were very inexpensive. Every day people were also able to read more about how finance worked by looking up articles on the internet.

The days of calling a broker to make trades for you is mostly gone. Now almost all of us know how to log into our brokerage account and make trades with the push of a button. This has been bad for the stock broker industry, but very good for the consumer.

Free Retirement Calculators
As mentioned before, the first sector of the finance industry to really be upended by technology was trading and investing. This opened up real investing for millions of people and lowered the costs for everybody. But the realm of financial and retirement planning along with investment management were all much slower to change.

With the internet came lots of free information and free calculators. Vanguard created one of the first free retirement calculators that allowed people to enter some basic information such as their age, their savings, their retirement age, their budget, and investment balances. It would then give a rudimentary projection of how one might do over the years and when a person might run out of money.

Although fairly basic, it was a great way for people to see if they were at least somewhat on track for retirement. Before this, people either guessed or had to pay a lot of money to a financial planner to do it for them.

Now there are hundreds of free retirement planning and financial planning calculators available. Most are very basic and some are inaccurate, but many are definitely worth using.

Retirement Software
Calculators can be nice and quick, but they are rarely accurate for a full financial or retirement plan. For this we need rigorous software that can accept multiple assumptions and variables.

Before the age of the internet, a person could only get a real retirement plan from a financial advisor or planner. The cost of this could run all the way up to $10,000. Only financial advisors and planners had access to detailed and accurate planning software that actually gave useful results. But that is no longer true.

Now we all have available to us software for consumers that allows us to do it ourselves. The best of the retirement planning software out there that we have found is WealthTrace. This software has the capabilities of typical advisor software, but at a fraction of the cost.

Not only does it take into account all different investment types such as IRAs, 401(k)s, 529 plans, Roth IRAs, and more, but it also allows for complex what-if scenarios.

This software also allows people to link and aggregate their accounts all in one location. The balances and the account holdings update each night. A lot of people have investments and money spread among several banks and brokerages these days. By allowing people to aggregate and view investments in one location, it makes it much easier to get your arms around your financial situation.

Other Great Financial Calculators

Another very useful financial planning calculator is SmartAsset’s tax calculator.  Surprisingly it is not easy to find a site that quickly estimates your federal, state, and local tax rates. But the SmartAsset calculator is not only easy to use, but is very accurate. It’s a great place to start when thinking about moving to a different state or even estimating what next year’s tax bill might be.

Another good financial calculator is Bankrate’s Social Security estimator. A lot of people have no idea how much they might get from Social Security once they retire. This is a really good place to start to at least get an estimate. Of course, the Social Security Administration (SSA) has your projections based on your past income and this will always be the most accurate estimate.

Time To Do It Yourself

There really is no need to pay the high fees that most financial advisors and planners charge. If you are a do it yourself type, then read a finance book or some online articles and get started with the free calculators out there. Once you are comfortable with the free calculators, upgrade to full-on financial and retirement planning software like WealthTrace to help you manage your financial future.


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