In this video, we walk you through you can model an earlier retirement event in your client's plan.
Transcript:
In this training, we'll walk through how to create and compare a What-If Plan.
A client's Base Plan typically represents their current financial situation before any planning recommendations have been implemented. A What-If Plan allows you to create an alternative version of that plan so you can demonstrate the potential impact of your advice.
To create a What-If Plan, select Create What-If Plan and choose the plan you would like to copy. If the client has multiple plan versions, you can choose the appropriate one from the list. In this example, we'll copy the Base Plan and name the new version Retire Early and Save More.
Once created, you'll have two separate plan versions. The active plan is displayed in the upper-right corner of the screen, allowing you to easily switch between the Base Plan and your What-If Plan at any time.
For this example, we'll model an earlier retirement. On the Timeline, simply drag Selma's Retirement event forward by a few years to simulate her retiring earlier than originally planned. As soon as the change is made, Voyant recalculates the plan, allowing you to immediately see whether the client's goals remain achievable and whether any projected shortfalls have been introduced.
Next, we'll make an additional recommendation by increasing Selma's annual contribution to her brokerage account. Updating the contribution amount allows you to see how additional savings may offset the impact of retiring earlier.
Once your changes are complete, open Compare Plans in Chart View to evaluate the two scenarios side by side.
Turning on Details provides a year-by-year breakdown of how the plan is funded. In this example, you'll see that the What-If Plan includes fewer years of employment income before the clients begin drawing from their taxable investments.
You can also compare the plans using a variety of charts, including:
- Assets to compare projected asset values over time and at the end of the plan.
- Net Worth to evaluate changes in overall wealth.
- Taxes to compare annual or cumulative tax liabilities between the two scenarios.
For example, although the Retire Early and Save More scenario results in a lower ending asset balance, the clients still have sufficient assets to meet their retirement goals. You can also customise the charts by using the legend to hide specific assets, such as the family home, allowing you to focus on liquid assets when discussing retirement funding.
If you're presenting a tax planning strategy, the Taxes chart is particularly useful for illustrating the cumulative tax savings achieved by one scenario compared with another.
If you need assistance while working in a client plan, click the client's name in the upper-right corner, select Request Support, enter your question, and choose Share Client Access so our support team can investigate your plan directly.