best software for financial planning

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best software for financial planning

Postby skanney » Fri Dec 21, 2012 3:47 pm

i am looking for the best software to perform a financial plan. i was hoping for something that can do scenario analysis as well as monte carlo simulations and had some measure of asset/liability analysis. does anyone know a good program for that?
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Re: best software for financial planning

Postby prudent » Fri Dec 21, 2012 10:25 pm

Could you be more specific? What do you want out of the plan? Retirement income analysis? More?
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Re: best software for financial planning

Postby skanney » Fri Dec 21, 2012 11:57 pm

standard stuff...college planning, spending levels, asset allocation, etc.
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Re: best software for financial planning

Postby livesoft » Sat Dec 22, 2012 12:00 am

I have never used it, but something like ESPlanner comes to mind.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: best software for financial planning

Postby SGM » Sat Dec 22, 2012 2:50 am

If you are interested in analyzing your portfolio then you can use the xray and portfolio analysis available to morningstar members or free via trowe price.

I use excel spread sheets that I have made up to help me get a rough idea of income and growth with various different scenarios.

There are a huge number of calculators at various web sites that purport to give you asset allocation appropriate for your age and risk tolerance. The same can be said for Roth conversions, and saving for college. I don't pay much attention to these, but maybe some people find them helpful.

I use a twelve year old version of quick books to keep track of business expenses.

I did find http://www.individual401k.com to be helpful for maxing out a solo 401k plan.
"Let us endeavor, so to live, that when we die, even the undertaker will be sorry." Mark Twain
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Re: best software for financial planning

Postby prudent » Sat Dec 22, 2012 9:06 am

Check the Wiki page about tools and calculators for some possibilities.
http://www.bogleheads.org/wiki/Tools_and_Calculators

You also need to use caution because I have found results to vary wildly across tools. For example the Fidelity retirement income calculator says I can retire in 2 years based on the desired monthly income I specified and still have a six-figure balance at age 95. On the other hand, the retirement income calculator on my company 401k site says if I retire in 4 years, I will be 30% short of my desired income AND using a shorter life expectancy. This is because the 401k site is not as comprehensive and doesn't support a lot of inputs that are relevant. Now, it wouldn't surprise me if the 401k site is slanted that way on purpose in order to encourage putting more money into the 401k and generate more fees for the 401k custodian.
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Re: best software for financial planning

Postby skanney » Sat Dec 22, 2012 1:51 pm

i've looked at morningstar and naviplan (which uses morningstar). fidelity was no good. the problem with morningstar is their monte carlo for individuals that i could find does not address fat tails in the distribution of returns or really allow for a scenario analysis. they also target terminal wealth and don't tell you the amount you can spend. if i am going to structure my investments, i need to know how much i can spend based upon the allocation. i don't care about how much money i can take to the grave after i die. so i need to change the spending figure for all the scenarios until i get a terminal wealth of zero. then none of it considers fat tails or trending/mean reversion patterns in the actual financial returns. just doesn't reflect reality and does not give me the information i need to match assets vs liabilities.

i did not know that you can access sharpe's financial engines via vanguard from the wiki page. what are his programs like? is there anything else that targets asset/liability matching while considering fat tails and trends in financial returns?
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Re: best software for financial planning

Postby Bruce » Sat Dec 22, 2012 2:47 pm

Hard to beat these planning tools, both for the quality and the price.

http://www.analyzenow.com/Free%20Programs/free_programs.htm

Some very helpful articles also available on Bud Hebeler's website "Analyze Now".


The mission of Analyze Now is to disseminate inexpensive retirement planning tools to educate the user about the realities of retirement planning.

Analyze Now does not sell or promote any securities. It produces and distributes planning papers, booklets, books and software


regards,
Bruce

"Simplicity is the master key to financial success."

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Re: best software for financial planning

Postby prudent » Sat Dec 22, 2012 3:37 pm

Money Tree Software has some programs designed for use by financial planners that will consider fat tails if you select that option. I have no experience with them personally but they do have a free trial, and you can download the guide free (must provide email address) to see if you think it will meet your requirements.
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Re: best software for financial planning

Postby skanney » Sat Dec 22, 2012 3:55 pm

analyze now only showed scenario analysis capability. they did not even mention fat tails or any sort of simulation.

money tree has goal based and cash flow based approaches. from what i saw of these in naviplan, they really don't target your liabilities and show how your assets move in tandem (or not) with them. the liabilities are considered set for any given monte carlo simulation and the assets move all over the place. but this is not how things work at all in the real world...thanks for the suggestions though...i am checking with financial engines to see what they can do. they are at least reputed to be fairly sophisticated but i do not know what they have in their systems for broad based use. at least the style analysis should be great...
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Re: best software for financial planning

Postby TomatoTomahto » Sat Dec 22, 2012 4:01 pm

livesoft wrote:I have never used it, but something like ESPlanner comes to mind.

I'm a fan of ESPlanner. Although I've used it for years, i have not plumbed its depths. I use it mostly as confirmation that we're on track. We don't hold back, but we also don't feel the need to consume as much as it says we could.
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Re: best software for financial planning

Postby TomatoTomahto » Sat Dec 22, 2012 4:05 pm

Re Financial Engines: it's free for us at Vanguard, so we use it for a "look see," but ESPlanner is my preference.
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Re: best software for financial planning

Postby skanney » Sat Dec 22, 2012 4:06 pm

oh, i didnt see the esplanner one. let me take a look
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Re: best software for financial planning

Postby skanney » Sat Dec 22, 2012 4:47 pm

esplanner looks interesting. they have monte carlo simulations using what looks like tips as a proxy for liabilities. they don't have fat tails and using scenario analysis seems doable but awkward. without the fat tails the monte carlo similation is a it limited, but they use 95% instead of 90% so maybe that would be a backdoor way of getting there...possible, but i would want to know what financialengines has... if there is anything better, i would certainly want to know though...thanks
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Re: best software for financial planning

Postby SaveStrong » Sat Dec 22, 2012 5:20 pm

firecalc.com?
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Re: best software for financial planning

Postby skanney » Sun Dec 23, 2012 9:16 am

firecalc does not look adequate on its own. does about as much as possible with historical scenarios, but they are very limited, especially if you are young and have a long period. it does not do any sort of simulation to add to the possible outcomes and does not consider how your liabilities might change with inflation. they also don't have data on tips which would be very helpful in hemming in your risk levels. that they are so thorough with scenarios is interesting, but i am not sure exactly what you can do with it.
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Re: best software for financial planning

Postby ourbrooks » Sun Dec 23, 2012 10:58 am

I use http://www.jlplanner.com

It does a good job of handling irregular expenses and income, e.g., "at age 42 we pay off the mortgage."
You can also model things like regular savings, etc.
It does have both Monte Carlo and historical sequence simulations.

I find that tools that focus just on investment returns are less useful since most of the uncertainty I want to evaluate is in savings and expenses, e.g., what if we move to a smaller house.
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Re: best software for financial planning

Postby skanney » Sun Dec 23, 2012 11:34 am

ourbrooks wrote:I find that tools that focus just on investment returns are less useful since most of the uncertainty I want to evaluate is in savings and expenses, e.g., what if we move to a smaller house.


you make a good point. unless you are asset heavy or plan on saving enough to become asset heavy, managing expenses will be more important. i think esplanner does a fairly good job of that though. it looks like they are pretty sophisticated in optimizing how you take social security and they even consider state taxes so you can model downsizing your home to a no tax state. but they also do what seems like a decent job in monte carlo simulations as applied to tips as a proxy for your expenses.

i am looking into Tip$ter, which seems like the best way to model investments, but i am not sure if they model expenses at all. also otar seems interesting. has anyone tried these?
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