Using the Retirement Spending Insight- Transcript
The Retirement Spending Insight helps illustrate how much a client may be able to spend annually in retirement while still maintaining the goals included in their plan.
Before reviewing the insight, it is helpful to confirm any existing goals or planned expenses that may impact retirement spending. For example, the plan used in this video already includes a gift to the clients’ son and the purchase of a vacation property in retirement.
Open the Retirement Spending Insight
Navigate to Insights and select Retirement Spending.
Within the insight, you can choose which goals and expenses should be included in the analysis by turning the available options on or off.
We generally recommend including applicable goals already modeled in the plan so the Retirement Spending Insight reflects the client’s overall strategy.
You can also choose whether the calculation should be inclusive or exclusive of taxes. In this example, the analysis is run exclusive of taxes.
Select the Retirement Timing
Choose the retirement age or event you want the analysis to begin from.
For a joint plan, you may want to use the later retirement event. In this example, Jane’s retirement is selected because it occurs last in the plan.
Once the settings are complete, select Get Started.
The Retirement Spending Insight will then calculate the estimated annual amount the clients may be able to spend throughout retirement.
Review the Results
In this example, the insight shows approximately $221,000 of annual retirement spending.
You can review how this spending appears in the plan by navigating to Year View and locating the Spending Analysisexpense beginning at the selected retirement event.
Keep in mind that the Retirement Spending Insight is displayed in today’s dollars. When reviewing future years in Year View, the expense will increase based on the inflation assumption configured within Plan Settings.
Create a Retirement Goal from the Insight
The amount calculated by the Retirement Spending Insight can also be used to create a retirement goal within the plan.
To do this:
- Add a new Goal.
- Select Retirement Goal.
- Enter the annual spending amount calculated by the insight.
- Set the timing to begin at the applicable retirement event.
- Select Done.
In this example, a retirement goal of $221,000 per year is entered beginning at Jane’s retirement.
The plan can then be reviewed to confirm whether the goal remains fully funded throughout retirement.
Confirm the Strategy
After adding the retirement goal, use Charts or Year View to verify how the expense flows through the plan.
Within Year View, navigate to Expenses and locate the retirement goal. This provides an additional way to confirm that the plan can support the modeled spending throughout the applicable retirement period.
The Retirement Spending Insight can be a useful starting point for understanding the maximum sustainable retirement spending modeled within the client’s current plan assumptions.
Need Help?
If you have questions about using the Retirement Spending Insight or modeling retirement expenses in AdviserGo, please reach out to the Voyant Support team.