Available in UK – Wall Street Journal’s Favourite Retirement App

The Best Online Tools for Retirement Planning and Living
Planning for retirement? Look no further than your tablet or smartphone.
A growing array of apps and websites make it easier to complete many of the most basic—and most important—tasks, from saving money and creating legal documents to figuring out a second career and where to live.
There are tools for people nearing or in retirement, and for people just starting to think about it. There are apps that help couples set up budgets and stick to them, websites that rebalance 401(k) allocations, and calculators that offer a better-than-educated guess as to how long that nest egg is going to have to last.
Some financial programs take care of chores that are crucial for getting ready for retirement but that many financial advisers often don’t have the time or inclination to do for their clients, such as regularly sweeping cash into accounts that earn higher-than-average interest, or tracking monthly spending.There also are tools for assisting with health care, as well as help with some difficult issues that people often have trouble navigating, such as the legal, health and practical considerations involved in end-of-life planning.
A few caveats: Some of the financial websites require consumers to enter the usernames and passwords of their investment and bank accounts. Look for sites that use TRUSTe, Norton Secured Seal, or SOC 3, which verify that companies have adequate cybersecurity and privacy procedures, says Brian Costello, a vice president of information security at Yodlee Inc., which sells technology that many sites use to import data from users’ accounts.
Be aware, too, that many free programs make money by recommending products.
What follows are free or mostly low-cost programs that can help individuals and families better prepare for and get more enjoyment out of retirement.
What Will You Do in Retirement?As baby boomers near the end of their careers, more Web services are helping them think about how they want to spend their time in retirement.
Our favorite: LifePlanningForYou.com, which offers a free series of introspective exercises. The site also provides links to financial planners trained in “life planning,” which focuses on helping clients clarify their goals, values and priorities before planning their finances. (It receives no compensation for the referrals, says George Kinder, founder of the Kinder Institute of Life Planning, which developed the website and trains financial advisers in life planning.)
One exercise asks three questions: What would you do if you had all the time and money in the world? How would you live if you knew you had only five to 10 years left? And what would you most regret if you died tomorrow?
The goal: “To lead people to a deeper and deeper understanding of what’s most important to them,” says Mr. Kinder.
The site pushes users to come up with concrete goals they can achieve within weeks. For example, someone who dreams of moving to Vermont might pledge to research towns and discuss telecommuting with an employer, says Mr. Kinder.
An alternative: LifeReimagined.org, an AARP website that offers free online tutorials on topics including setting goals and career planning. Developed by experts including author and executive coach Richard Leider, the program includes free 90-minute “checkups” for as many as 25 participants in locations nationwide. AARP is developing longer workshops and in 2015 plans to offer one-on-one online sessions with coaches for about $125 an hour.
Longevity Forecasting
People often underestimate how long they are going to live, which can cause them to overestimate how much they can spend each year in retirement. For many, the mistake lies in overlooking advances in health care that improve their odds of living longer than their parents did.
For an estimate that incorporates health, habits, socioeconomic status and family history, there are life-expectancy calculators such as livingto100.com and How Long Will I Live? The latter was developed by professors at the University of Pennsylvania.
Our favorite is from Blue Zones, a company that studies regions with exceptional longevity and advises companies and communities on ways to improve the health of their employees and inhabitants. (Search for “Vitality Compass” in the “Live-Longer” section at Bluezones.com.) In addition to life expectancy, the calculator can forecast healthy-life expectancy, defined as the age someone will reach before being diagnosed with heart disease, diabetes or cancer. As a result, it can provide insight into the number of years a person might pay higher health-care or long-term-care expenses. It also offers tips for living longer.
Developed with the University of Minnesota School of Public Health, the calculator is powered by an algorithm that takes into account 29 factors that 314 academic studies have linked to life expectancy, says Nick Buettner, Blue Zones’ community and corporate program director.
How Much to Save
Even with a realistic estimate of life expectancy, it’s virtually impossible to figure out how much to save for retirement or how long a nest egg might last without first knowing how much you’re spending and on what.
Several programs, including Mint and Yodlee’s MoneyCenter, can put together a budget for consumers based on their past spending patterns and alert them when they are in danger of exceeding past thresholds.
The services automatically import data from credit cards, loans, and bank, brokerage and 401(k) accounts. If a customer puts all of his or her purchases on credit and debit cards, the services can break down the spending into categories, such as utilities and groceries, and can even track amounts of spending at specific stores or on specific items.
A growing number of these sites also function as retirement calculators. Mint can project people’s retirement income based on what they have saved and what it figures they will save, given their habits. The service is free but earns a referral fee when users buy products and services, such as bank accounts and credit cards, from advertisers. Starting later this year, rival HelloWallet plans to offer the same basic service—and allow users to model what will happen if they work longer or put more into a traditional or Roth 401(k) or individual retirement account or a health-savings account. The service is available free through some employers, or for $100 a year.
Many services also try to help consumers save more money. HelloWallet computes a financial wellness score for each user, offers a comparison with scores of peers, and recommends ways to improve the score.
Retirement Income Planning
When planning retirement, saving money is half the battle. The other half: figuring out how to generate a steady paycheck throughout retirement.
A growing number of online tools can help. They include robust financial-planning software programs available from companies including Fidelity Investments and Morningstar Inc. that recommend what to invest in and withdrawal strategies. (Morningstar’s service, Retirement Manager, is available through some employer-sponsored defined-contribution plans.)
Because each has pros and cons and is programmed with different assumptions, it’s ideal to try more than one, says Anna Rappaport, chairperson of the Society of Actuaries committee on postretirement needs and risks.
Some recommend a specific approach to investing. For example, Fidelity’s Income Strategy Evaluator, available free, often recommends annuities for those unable to cover basic living expenses with guaranteed sources of retirement income, including Social Security and a pension. (Fidelity sells its own annuities, as well as offerings from companies including MetLife Inc. and New York Life Insurance Co.)
Our favorite income-planning tools—ESPlanner from Boston University economist Laurence Kotlikoff, and Retiree Income from Baylor University Prof. William Reichenstein and co-founder Bill Meyer—combine income and tax planning, an area that not all such tools address.
These services aren’t free. Three phone sessions with a Retiree Income adviser cost from $500 to $2,500. (The greater your assets, the higher the fee.) Retiree Income plans to introduce a do-it-yourself version on its website starting at about $20 a month in early 2015. ESPlanner starts at $149 for the first year plus $50-a-year updates. It offers guidance from an adviser on the phone for $150 an hour. For $500, an adviser will run the program.
“Our research has shown that an optimal Social Security strategy, combined with tax-efficient withdrawals, can extend the life of a portfolio by as much as 10 years or longer,” says Prof. Reichenstein. One caveat: The recommendations sometimes call for deferring Social Security to maximize those benefits and reap tax savings.
Social Security Planning
Not everyone depends on Social Security benefits to cover essential living expenses, but no one should pass up the opportunity to maximize those benefits if they can. The tricky part is knowing when is the best time for each individual to start collecting. A growing number of online programs aim to help users peg the optimal claiming strategy.
For couples, the claiming decision can be especially complicated because of the availability of spousal benefits and the need to consider the financial security of the survivor. Because benefits will rise by 6% to 8% for every year you delay claiming between the ages of 62 and 70, those who claim early may reduce the lifetime benefits they (and their surviving spouses) stand to receive by “tens of thousands of dollars,” says Christopher Jones, chief investment officer at Financial Engines Inc., which offers a free calculator.
Our top pick? SocialSecuritySolutions.com, which charges from $20 to $250 (depending on the level of advice). This user-friendly site takes into account a wide variety of household configurations as well as the impact that many other sources of retirement income can have on Social Security benefits.
Medical Care
From quick consultations to second opinions, more Web-based companies offer virtual medical visits via text messages, email, phone and video.
Most services, including Teladoc and MDLive, are mainly for routine conditions, such as rashes, sports injuries and the flu. At Doctor on Demand Inc., patients who answer questions about their medical histories are typically connected with a primary-care doctor within two minutes, says Chief Executive Adam Jackson. The site’s 1,400 physicians can write prescriptions. The cost, which some insurers will cover, is $40 per visit.
For more serious conditions, Grand Rounds Inc. offers second opinions. The site has contracts with more than 1,000 specialists affiliated with facilities including Harvard Medical School. Mainly offered by employers, it is free to those who get it as an employee benefit. Otherwise, it costs $7,500 per medical case—and insurance generally doesn’t pick up the tab. That means if a patient contracts with the service in connection with a hip replacement, and gets cancer the next day, he or she would have to pay another $7,500 for help with that condition.
The service is intended “for complex cases where outcomes are going to be dramatically different based on expertise,” says Owen Tripp, chief executive of Grand Rounds. The service can give referrals to local doctors and book appointments. Aside from providing second opinions, the specialists help plan care and answer follow-up questions, he says.
Caregiving
Worried about mom or dad’s spending? New Web tools can give caregivers almost real-time oversight.
One free app, BillGuard, sends a person’s debit- and credit-card charges to a mobile inbox, where that person—or a designated caregiver—can monitor the transactions. There is typically a one-day lag between the transactions and the time when they appear in the inbox.
A caregiver keeping close tabs can use that information to cancel transactions or request refunds, says Yaron Samid, founder and chief executive. BillGuard also sends alerts about purchases from specific merchants that its algorithms and one million users have identified as scams.
For more control, True Link Financial Inc. offers a service with a prepaid debit card for $10 a month through which caregivers can monitor charges and block spending at specific merchants or charities, or on whole categories—sweepstakes, for example.
Estate Planning
A handful of sites offer a blueprint for estate planning, including a list of the documents that are generally needed in addition to a will.
One of the most comprehensive, Everplans.com, explains how to complete documents such as health-care proxies and powers of attorney that appoint people to make medical and financial decisions on behalf of someone who becomes incapacitated. It has links to standard versions of these documents for all 50 states plus the District of Columbia and discusses living wills, do-not-resuscitate orders and some types of trusts. The site also sends emails to urge users to take specific steps, such as uploading or completing documents.
For $75 a year, users receive five gigabytes of storage for documents on the site. Users frequently upload copies of items their beneficiaries will need, including insurance policies, Social Security cards, bank account numbers, online usernames and passwords, and contracts with funeral homes and cemeteries. Some users even include explanations of their wills, says Abby Schneiderman, the site’s co-founder.
The site requires users to name deputies to receive access to the information. It also recommends companies that provide wills and life insurance, although it currently receives no payment from those companies, says Ms. Schneiderman. Similar websites include Principled Heart.
End-of-Life Care
Making decisions in advance about what health care to receive at life’s end can be difficult. But people who don’t address the issue can leave loved ones guessing at critical times.
Moreover, “when these discussions take place in a crisis, conflict can emerge, including sibling rivalry,” says Harriet Warshaw, executive director of the nonprofit Conversation Project, one of a handful of initiatives dedicated to making it easier to talk about the topic.
Co-founded in 2010 by Pulitzer Prize-winning journalist Ellen Goodman, the Conversation Project offers a free “Conversation Starter Kit” that poses questions including: How much information do you want your doctor to share with your family? And are there important milestones you want to reach? There’s also advice on talking with doctors about these issues.
While 90% of Americans say it’s important to discuss end-of-life medical care, only 27% actually have the talk, says Ms. Warshaw. “Nobody wants to have these conversations, which is why people do not have more control over the way they live at the end of their lives. “We want to give people the courage and confidence to broach the subject.”
Miscellaneous
Sick of earning next to nothing in interest? Once a month, MaxMyInterest.com will automatically sweep cash from a checking account at one of five brick-and-mortar banks into one or more FDIC-insured savings accounts at online banks with above-average interest rates. Currently, those banks pay between 0.75% and 1.05%, versus the 0.09% national average for money-market and savings accounts. Max’s annual fee: 0.08% of total assets in the online bank accounts. The brick-and-mortar banks are Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc.’s Citibank, Wells Fargo & Co. and First Republic Bank.
Another good way to save more is to pay less in fees. According to Vanguard Group, over a 40-year career, someone who invests 9% a year of a salary that starts at $30,000 into a balanced fund and pays 0.25% a year in fees will save 20% more than a person who pays 1.25% in fees. FeeX.com can help. The free site shows how much in dollars a user is paying in fees each month, and projects the cumulative lifetime cost of those fees. It identifies fees paid to financial advisers, brokerage firms, 401(k) plans, and mutual funds, and suggests similar, but lower-cost, funds.
For 401(k) advice, check out blooom.com (with three O’s). For $1 to $15 a month, blooom.com’s algorithm picks what funds to invest in from a customer’s 401(k) plan menu—and makes the trades for them. And every three months, the service rebalances the portfolio to a target mix of stocks and bonds that becomes more conservative over time, says CEO Chris Costello. One caveat: With a recommended 80% allocation to stocks for someone 10 years from retirement, the service is for those comfortable with equities.
Ms. Tergesen is a reporter for The Wall Street Journal in New York. She can be reached at encore@wsj.com.

Delivering Pension Feedoms from 2015

Pension Freedoms April 2015 – A Life Planner’s Perspective

As Life Planners we are forever delivering clients to financial freedom, so what do the new pension freedoms mean to us?

Pension Age 55 increases to 57 from 2028

As State Pension Age shifts to 67, the minimum age at which you can access pension funds will become 10 years less. Anyone born after March 1973 is affected. This means that people will have to wait longer in order to access their life savings to pursue their dreams, such as pursing an entrepreneurial calling. Always check out your heart-felt goals before locking away funds in pensions.

Flexible Access Drawdown (FAD) – Money Purchase only

Changes to Money Purchase schemes will, scheme rules permitting, allow the member to take the whole fund in cash in one go. The money so taken is called Uncrystallised Funds Pension Lump Sum (UFPLS). The first 25% taken is tax-free, the rest is taxed at your marginal rate. The Pensions Minister Steve Webb said: “If people do buy a Lamborghini but know that they’ll end up just living on the state pension, that becomes their choice.” From our perspective this measure removes barriers to the fulfilment of heart-felt goals, which are seldom about the money but require money to bring them into being. There is the risk that funds will be depleted in the pursuit of mind-thought goals, satisfying the ego without delivering lasting contentment.

Defined Benefit/ Final Salary Lock-In

There is a new requirement that members of final salary pensions will have to seek the advice of a FCA regulated financial adviser if they want to switch pension rights to money purchase in order to access FAD freedoms. However, very few advisers in the land will recommend a switch (as transfer values are woefully short of the values required to purchase equivalent benefits) and are unlikely to allow the client to switch on an insistent customer basis. Advisers will still charge a few thousand ponds to produce a report, but the member is effectively locked into the DB scheme. Members of unfunded public sector schemes don’t get the choice, they are automatically locked in.

FAD impact on contributions

On exercise of FAD freedoms the amount you can pay into your pensions in the future will be restricted. The Money Purchase Annual Allowance falls from £40,000 to £10,000 per year, and you will be unable to carry forward any unused relief from previous years in order to top up this amount. So exercising your freedom burns bridges in terms of the prospect of making future pension contributions is concerned.

The inheritable pension

On death your unused drawdown fund can be passed on to anyone, and they can either leave the money invested in the pension or take it as cash. Before you decide to leave your pension as part of your succession planning, there is a catch. Whilst on death before age 75, the benefits are payable tax free to beneficiaries designated within two years; on death after age 75 the benefits are taxed at the recipient’s marginal rate. You could be risking significant tax penalties from not using your pension to live the life you love in active retirement, tax on your nominee and/or their successor’s flexi-access drawdown fund.

State Pension Impacts

Something not often mentioned on guidance sites is the impact all of this could have on your State Pension entitlement. New changes coming in in April 2016 to State Pension benefits could leave you with a flat rate pension entitlement of £148.40 per week (to be confirmed Autumn 2015). The amount you receive depends on your National Insurance Contribution history. If you should decide to take FAD benefits and stop working you could lose valuable State Pension entitlements of one-thirty-fifth of the flat rate for every year, plus accrued Additional State Pension could be eroded. The current BR19 Forecast service has not been updated with the new terms, so you will not be able to calculate your State Pension entitlements.

Further guidance

Free impartial guidance on pension options is available on Pensionwise, and you will be sign-posted to this service.