How to use Retirement Analysis: Action Items

Propose Changes and Apply Planning Strategies

RightCapital enables financial planning done just right. Part of empowering you to do that is to give you detailed, on-the-fly options to change retirement calculations with clients. The action items represent adjustable data entry inputs and planning strategies that contribute to a successful retirement plan. Once adjusted, action items impact the proposed plan to highlight the change in probability of success, ending investable assets, and more.

Here’s what the Action Items look like under the Retirement > Analysis tab (the same options are used in all four sub-tabs: Probability, Confidence, Comparison, and Income):

How action items work

At their core, action items allow you to quickly adjust retirement factors and display the impact those changes have in real-time on the retirement analysis. Action items represent data entry inputs from the Profile tab that can be adjusted for each proposed plan. Additionally, action item "strategies", listed on the right, represent planning modules that can be activated in a proposed plan. For Example, tax-efficient distribution strategies modeled in the Tax > Distributions tab are enabled with the"Distribution Strategy" action item. Action items also allow you to adjust investment strategies and propose annuity purchases within a proposed plan. Once adjusted the action item font color will change to blue, allowing users to easily track changes isolated to the proposed plan.

Pro-tip

RightCapital gives you granular control over how you provide excellent advising to your clients. The visible action items can be customized by clicking the "Edit" button next to Refresh. By checking or unchecking inputs in the "Add or remove action items area", advisors can tailor the proposed plan action items to the variables that are most relevant to each user.

Data entry variables can be viewed and created in the action items. This allows advisors to propose new scenarios without leaving the Retirement Analysis screen. To view more details of income, savings, expenses, and goals, click the action items to view the original data card from the Profile tab. For more information on adding new data entry variables into the action items, see "Create New Action Items" section below.

All values under the action items column labeled "Current" are static and flow from the initial data entry. To change these values visit the Profile tab which includes the six initial steps of data entry that create the current plan. Most income, savings expense

Use the slider bars or manually type values into the Proposed column to modify the Proposed plan on the left. Users can select "Reset" on the bottom right to update all values from the variable plan on the left to match the values from the static plan on the right. This can be used to reset action item values to the current plan values or to create a duplicate of the Proposed or other plans for those people using multiple plan functionality.

Note

The Proposed column will reflect the name of whichever plan you have selected. You will have the ability to create and name as many proposed plans as you'd like. Learn more about Multiple Scenarios for instructions on how to create, save, and use multiple proposals within a client's account.

The data reflected in the Proposed column will be compared to the Current plan throughout the Retirement tab.

Financial goals

This section allows you to edit the retirement age for both the client and their spouse, retirement monthly expenses, health care & LTC expenses, as well as any other financial goals that are added on the Profile / Goals screen.

Additionally, users can add new financial goals within the Retirement > Analysis > Action Items> Edit > "Add New Items" drop-down box. For more info on adding new data entry variables into the action items, see "Create New Action Items" section below.

Income, savings, and expenses

This section allows you to illustrate how changes to cash inflows, outflows, and savings (that are shown on the Income, Expenses, and Savings screens under the Profile) can impact the financial planning outcomes.

Additionally, users can add new income, savings, and expenses within the Retirement > Analysis > Action Items> Edit > "Add New Items" drop-down box. For more info on adding new data entry variables into the action items, see "Create New Action Items" section below.

Create new action items

You also have the ability to create new income, savings, expenses, financial goals, and insurance policies within the Retirement > Analysis > Action Items screen. This allows you to generate new planning scenarios without leaving the Retirement Analysis module.

To add new action items, click the "Edit" button in the action items section and use the "Add New Items" drop-down box to select the type of action item to add.

Once the action item type is selected, you can input the necessary information then click ‘Save’. Once saved, it will be added to the action items section and impact the proposed plan outcome. If the household has multiple plans, the new action item will be automatically added to all plans other than the Current plan. New action items are denoted by a darker shading than normal data entry inputs entered under the profile tab. After a new action item is added, you can click on the name to edit or delete the item’s data fields. You can also use the action items slider bar to change values within the plan. To adjust new insurance policies advisors will have the option to enable or disable them within proposed plans.

Notes:

  • College goals cannot be added in Retirement > Analysis > Action Items.
  • Insurance policies that are supported include all Life and Long Term Care policies.
  • Insurance policies that are added will not impact the results shown on the Life Insurance screen.
  • LTC policies that are added will be included in the Long-Term Care module.

Strategies

  • The Asset Allocation strategy fuels the projected returns that are the starting point for calculating the simulation trials. The information for each portfolio can be analyzed in the Investment > Asset Allocation tab.

Build your own models: Click here to learn how to build your own asset allocation models.

  • The Glide Path strategy will allow users to adjust the glide path for a proposed plan. Users can turn on the glide path setting or change it to a post-retirement asset allocation within the Gear Icon > Settings > Methodology > Allocation Method.

  • The Annuity allocation strategy allows you to illustrate a separate asset allocation strategy for your client's variable annuities.

  • The Social Security strategy provides several options:

    • Current strategy starts to take benefits at the age shown in the Social Security card in the Income section of the profile).
    • Optimal strategy grabs the data listed under the Retirement >  Social Security action items.
    • Age 70”, “As Early As Possible”, "Retirement", and “Full Retirement Age” shows benefits starting for both client and co-client at the specified time.
    • Customized illustrate specific Social Security strategies for each client. In addition to the previous options, you can also select a specific age for each client to file for Social Security.
  • The Debt Strategy defaults to current payments.

    • 'Debt proposal' can be used if you’d like to suggest an alternative debt-management strategy for your client. When Debt Proposal is selected, we will include any updated debt payments generated on the Dashboard > Debt > Strategy tab.
  • The Student Loan strategy defaults to Current payments.

    • When "Student loan proposal" is selected, we will include all student loan values from the proposed strategy on the Dashboard > Student Loans > Strategy screen.
  • The Distribution strategy defaults to the current strategy.

  • When "Distribution proposal" is selected, we will include any changes to the Withdrawal strategy and any proposed Roth conversions generated on the Tax > Distributions screen.

  • The Income strategy illustrates the impact of immediately moving some or all of your client's assets from one account into an annuity.

To illustrate multiple annuity purchases or specify a future purchase date, use the Action Items > Edit > "Add New Items" menu > Select Annuity.

  • AUM fees allows you to illustrate a difference in average AUM fees.

  • Retirement Spending: Retirement spending can be customized based on client behavior or market performance. There are five spending strategies found in the Advisor Portal > Models > Retirement Spending tab. The default is inflation adjusted, which increases expenses by inflation assumptions annually. For more information on all spending strategies and creating new ones, click here.

    • Inflation adjusted expense strategy
    • Retirement spending smile strategy
    • Retirement spending stages strategy
    • Guardrail spending strategy
    • Floor & Ceiling strategies

Pro Tip:

Use the Retirement Spending Strategies to illustrate changes in the Retirement > Analysis > Retirement Details > Retirement Spending graph.

If you wish, you can also set up multiple plans to reflect different sets of action items that you can then easily compare. Learn more about multiple scenarios / multiple plan functionality.

Properties and businesses

Under the Properties and Businesses section, users can specify the year of sale for different properties, businesses, and lifestyle assets that are entered in the Net Worth section of the Profile, or that are entered as property goals in the Goals section of the Profile. Users can also adjust the purchase date of lifestyle asset purchase goals.

Pro Tip: Set the year of sale of the property/business to "never" if you want to see what would happen if that sale does not occur.

RightCapital is committed to enabling your success. Each week, we set aside time to cover important updates and host a Q&A with the product team, giving you a direct line of access to the experts behind the curtain. Visit the Upcoming and Most Recent Webinars area to register today!

Also, be sure to check out the Getting started guide and our YouTube channel for more!

For additional assistance adjusting your client's proposed plan please contact Support.