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A recent Study conducted by LIMRA International, the Society
of Actuaries and the International Foundation for Retirement
Education (InFRE) has produced a sixty five page report entitled
"Retirement Planning Software" (The Report). LifeFocus
and five other consumer products are included in the Study.
While The Report was delivered without specific reference
to each software program in the detailed analyses and comparisons,
we have used the criteria set forth by the Study to identify
key features and differentiators in LifeFocus that are important
to a consumer/user. (The page references are for your convenience
in reviewing the 65 page Retirement Planning Software Report.)
Key Features And Differentiators:
(1) Varying Income Needed. The Report says that only
one consumer program gives the user the ability to adjust
or modify income needs during the retirement years. (The Report
suggests that this is critical to effective retirement planning
in today's environment). LifeFocus has this feature and also
allows the user to consider income from work during the retirement
years.
(2) Varying Salary Increase Rates. The Report indicates
that only one consumer program provides the flexibility for
a user to vary salary increases during the working years.
LifeFocus allows the user to enter salary rate increases or
decreases during various time periods throughout the working
years.
(3) Tip Buttons. The Report says that only one consumer
program has the important feature of a "tip button"
at the point of data entry offering help in understanding
the information required to make the data entry. LifeFocus
has this important feature throughout the program.
(4) Tutorials. The Report emphasizes the importance
of tutorials. In addition to the 'tip button', throughout
LifeFocus there is a 'professor' explaining how each data
screen works and tutorials providing help with saving and
investing issues such as rates of return (using historical
data). (pp. 20, 21 & 24)
(5) Home Equity Section. The Report points out the
value of being able to include home equity in retirement planning.
There is a section in LifeFocus specific to home equity and
other 'non-qualified' assets that may be included in retirement
planning projections. This section allows the user to consider
their value today and in the future. Rental or vacation property
can be included with the purchase price and other data to
assist in calculating taxes upon the sale. There is a 'tax'
or 'don't tax' check box to allow for the special treatment
of a personal residence as tax-fee or partially taxed, depending
upon the sales price. (pp. 12, 20, 24 & 49)
(6) Worksheets. Emphasis is given in The Report to
the importance of worksheets, which many programs do not provide.
LifeFocus includes worksheets in several sections, providing
help for the user to determine average tax rates, and develop
practical plans for spending and saving, both prior to and
during the retirement years. (pp. 11, 19 & 28)
(7) Life Insurance Needs. The Report indicates that
only one consumer program provides a way to assess life insurance
needs. LifeFocus has a special section on life insurance,
with a calculation process that takes into consideration the
key components related to income needs and financial resources.
(pp. 26 & 29)
(8) Specific Needs Section. The Report highlights
the importance of planning for college expenses. LifeFocus
has a 'specific needs section' for short-term goals such as
college education. It also accommodates other major expenditures
requiring a savings plan that will impact retirement planning.
(p. 24)
(9) Alerts. The Report stresses the importance of
'alert' messages, letting the user know when data has been
entered that is outside reasonable ranges. LifeFocus provides
those 'alerts', calling attention to the error and providing
guidance for revised data entry. (p. 32)
(10) Informational Texts. The Report suggests that
informational texts on risks related to disability, long-term
care, health needs, etc. are important. In LifeFocus, these
risks are addressed and explained. (pp 9 & 40)
(11) Social Security Adjustments. The importance of
being able to make adjustments in the social security benefits
received is a feature that The Report points out. LifeFocus
makes it possible for the user to adjust the social security
benefits to respond to changing life situations. (p. 13)
(12) Increase Contribution Limits. As laws change,
the user needs to be able to increase contributions to 401(k)
plans, IRAs and other tax deferred plans. LifeFocus makes
these increases possible as allowed by new regulations. (pp.
11& 13)
(13) Annuities. The Report emphasizes the importance
of annuities in retirement planning. In LifeFocus there is
a specific screen designed to accommodate the use of annuities
in planning, both prior to and after retirement. (pp. 13 &
47)
(14) Distribution Strategy. The Report discusses the
importance of a distribution strategy during the retirement
years that takes taxes into consideration. In LifeFocus, not
only is there a logical distribution plan automatically provided.
There is also a unique option for the user to select the order
of distribution for assets if they prefer a different strategy.
(pp. 30 & 31)
(15) Planning Guidance. Finally, The Report suggests
that users need planning guidance and help in fixing problems.
In LifeFocus, there are numerous planning alternatives suggested.
(p. 14)
Continuing to Improve
As a result of the LIMRA International, Society of Actuaries
and InFRE Study, we are making immediate improvements to our
LifeFocus software program that will further enhance its value.
Whether used by consumers who are doing their own planning,
or by consumers and their advisors working together, LifeFocus
is an excellent planning resource and a valuable software
tool. It is designed to improve communication between all
parties involved in the planning process. It enables the users
to explore alternatives, make decisions, take action and follow
up regularly to determine changes that need to be made.
Enhanced Through Customization
Even in the generic version, LifeFocus is one of the best
retirement planning software programs available today. Its
value is enhanced even more when it is customized to fit the
needs of an organization desiring to use the software for
its clientele. From the very beginning, LifeFocus was created
with customization in mind. Over the past decade it has been
customized for, and utilized by, dozens of major firms to
serve their constituents. Several hundred thousand corporate
employees have been able to use the software to better understand
their own employer provided benefits and integrate those benefits
into their personal financial planning.
LifeFocus has also been licensed and used by major financial
planning firms to better serve their corporate and individual
clients. It can be private labeled or branded to accommodate
the distribution system of a corporate or organizational sponsor.
In addition to the features included in the retirement planning
software study, LifeFocus also has a financial planning module
designed to help a user explore alternatives for reducing
and managing debt, as well as other functions related to basic
financial well being and comprehensive life planning.
Future Expansion
As more people gain confidence in their ability to use technology
and are motivated to take responsibility for their financial
well-being, there will be a growing demand for consumer software
that is easy to use, is flexible and comprehensive, with modules
that are interactive and integrated.
With LifeFocus in the hands of both the consumers and their
advisors/planners, communication is improved, the issues related
to financial and retirement planning can be addressed and
responsible decisions can be made. On a regular basis, results
can be reviewed and appropriate adjustments can be made to
achieve realistic client goals.
Notes:
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