Has anyone used Income Strategy website/software?

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busdriver
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Has anyone used Income Strategy website/software?

Post by busdriver » Tue Jan 02, 2018 4:23 pm

With retirement less than a year away, I'm trying to figure how to distribute my 401K & rollover IRA funds tax-efficiently. I will hold-off on my SS and PBGC pension until 70, but will draw on my spousal benefit starting at 66, so I've got from 65-70 to whittle-down a low 7 digit tax-deferred portfolio in hopes to lessen tax burden of after 70 income of appx. 198K/yr., before any RMD's are taken.

In my quest to find a calculator or software to help with the complexities of my dilemma, I found the Income Strategy website, (https://www.incomestrategy.com), from the same people, (William Meyer & Dr. William Reichenstein), that produce Income Solver, a professional version for CFP's as well as Social Security Solutions for best SS withdrawal strategy.

It's a subscription service for $20/mo. for basic plan and $50/mo. for premier plan. Just wondering if anyone has used it and if there's any need to continue subscription after your plan has been generated?

jaybee747
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Re: Has anyone used Income Strategy website/software?

Post by jaybee747 » Wed Jun 06, 2018 1:28 am

I am not using it but it looks very interesting, I hope someone can share more info.

racy
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Re: Has anyone used Income Strategy website/software?

Post by racy » Wed Jun 06, 2018 6:04 am

No, but also interested if others have, and how it differs from (free) iORP. https://i-orp.com/BigGraph/index.html

barelybarefoot
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Re: Has anyone used Income Strategy website/software?

Post by barelybarefoot » Wed Jun 06, 2018 2:08 pm

Bumped

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busdriver
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Re: Has anyone used Income Strategy website/software?

Post by busdriver » Thu Jun 07, 2018 9:54 am

Since there was no feedback from my original post on this and since Fidelity, (holder of all of our tax deferred funds), has told me that their retirement drawdown analysis planning is no longer a service they provide, I decided to try the $20/month subscription service.

After inputting personal information, several strategies are generated. The recommended strategy is the one which is the most tax-efficient allowing for the highest account balance at the end period of your planned lifespan. Plan details of the different strategies can be reviewed and you can decide which plan works best for you.

In my case, I liked the recommended strategy with the idea of having the highest account balance at the end for my heirs. The process for me involves using my first five years of retirement, (ages 65-69) to live off of and convert all of my tax-deferred accounts to Roth IRA. My wife, who is already retired and a year younger, would convert her IRA to Roth in year six of my retirement. This would eliminate RMD’s from the picture.

At age 70 and beyond, I would start living off of SS & PBGC pension with the previously converted tax-free Roth funds not needed.

I must say that this strategy appears to be a bit painful in the beginning due to a higher tax bracket than other strategies; however, by doing so, it lowers the tax brackets for later remaining years of the plan which results with less overall taxes paid.

Again, there are several strategies generated from the info inputted. It is up to you to choose which strategy suits your needs best. Changing/revising inputted info will generate new details of the different strategies.

Subscription can be terminated at any time, so for $20, you can come up with some pretty sophisticated retirement drawdown plans. Continuing the subscription allows your details to be constantly updated, if you’ve linked your accounts with the software.

If you’d like to get additional help with your plan, it’s available for $125/hour. Before I found the Income Strategy website, I had considered using other financial planners who either charge up to $450/hr. or several thousands of dollars for a plan, (I am opposed to an AUM based plan). In my case, I felt $125/hr was reasonable for expert help. Due to complexities of our various sources of income, I’ve already had a few sessions with them to refine our plan for optimum results. I have been very pleased with each session I’ve had and plan to have a few more to tweak it to perfection.

I think that the recommended strategy that is generated may be contrary to conventional wisdom; however, I am unaware of any other software, including i-ORP, that can forecast the most tax-efficient strategy at the end-game like this one.

I hope that others might give this a try and post their feedback.

danielm
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Re: Has anyone used Income Strategy website/software?

Post by danielm » Fri Aug 17, 2018 9:08 pm

Hi Busdriver,

I'm also considering this product (as well as Maxifi planner). Any additional feedback you can offer since you last posted? Are you aware of features in the 'premier' version that would make it worth the extra $? Your comments are about the only ones I could find on the Internet and the info on their web site is not very detailed.

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Re: Has anyone used Income Strategy website/software?

Post by busdriver » Sat Aug 18, 2018 3:10 am

I was hoping someone else would have tried the product by now, but apparently not. I still subscribe with the basic $20/mo., but feel no need in our case to use the premier plan. I have spent four or five hour-long sessions to tweak my plan as I have some special issues to contend with to refine tax-efficiency that the software would not pick up without manual manipulation. I still plan to follow the guidance of the software to convert all my tax-deferred accounts to Roth in time to eliminate age 70 RMD's when they would come into play.

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Re: Has anyone used Income Strategy website/software?

Post by The Wizard » Sat Aug 18, 2018 4:36 am

busdriver wrote:
Sat Aug 18, 2018 3:10 am
...I still plan to follow the guidance of the software to convert all my tax-deferred accounts to Roth in time to eliminate age 70 RMD's when they would come into play.
I think it's a suboptimal idea, generally, to convert all of a substantial tax deferred portfolio to Roth by age 70.
You'll pay a large amount of additional income tax to do that.

More optimal approach is to levelize your income before and after age 70 to keep your AGI and resulting taxable income about the same or increasing slightly year to year.
Do this by doing comparatively modest Roth conversions in the pre-70 years.

Also keep an eye on Medicare IRMAA thresholds to avoid being just over a threshold due to Roth conversion. It's fine to be over the first $85,000 per person threshold, but be aware of the others in your planning...
Attempted new signature...

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Re: Has anyone used Income Strategy website/software?

Post by spammagnet » Sat Aug 18, 2018 10:55 am

Prompted by this thread, I subscribed to the basic plan. Being able to cancel at any time makes that a low ante.

I have a lot of experience with MaxiFi (primarily through its predecessor, ESPlanner Plus) and find its theoretical basis more appealing to my way of thinking. Instead of defining a desired spending level, as required by Income Strategy, MaxiFi maximizes your spending based on your desired terminal wealth. Both allow you to specify irregular spending events such as weddings, big vacations and long-term care.

I have less than a couple of hours experience with Income Strategy but, so far, find no way to control the SS benefit strategy, nor to edit the benefit forecast. (I prefer to include the Trustee's forecast of the trust fund drying up in 2035.) MaxiFi allows both. In it, I set benefits to drop 25% in 2035, and for DW to start benefits at age 62. I know benefits increase 8% per year deferred. In our case, that provides only a nominal difference over the life of our plan. Starting hers early allows us to preserve her assets, makes for much smoother cash flow, and significantly reduces the amount of term insurance required to assure financial security to her if I die early. YMMV.

I'll continue to play with Income Strategy for the rest of this subscription month but probably won't extend after that. I don't see the incremental value to me over MaxiFi alone and the latter is cheaper on an annual basis. That's the only way you can subscribe to it.

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busdriver
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Re: Has anyone used Income Strategy website/software?

Post by busdriver » Sat Aug 18, 2018 3:30 pm

The Wizard wrote:
Sat Aug 18, 2018 4:36 am

I think it's a suboptimal idea, generally, to convert all of a substantial tax deferred portfolio to Roth by age 70.
You'll pay a large amount of additional income tax to do that.

More optimal approach is to levelize your income before and after age 70 to keep your AGI and resulting taxable income about the same or increasing slightly year to year.
Do this by doing comparatively modest Roth conversions in the pre-70 years.

Also keep an eye on Medicare IRMAA thresholds to avoid being just over a threshold due to Roth conversion. It's fine to be over the first $85,000 per person threshold, but be aware of the others in your planning...
I am aware of the high tax price tag in the beginning as well as the IRMAA issues. There are several ways to adjust the software to come up with a specific goal. It will initially recommend the plan that will amount the least tax dollars spent over your and your spouse's forecast lifetime, (an age you choose). This is the plan I chose as it also comes up with the largest amount of money left over when we are both gone, which will all reside in a tax-free Roth account to pass on to our kids tax-free.

I understand that level annual taxes and staying in the same bracket year after year is the conventional thinking of most plans, but this software can show how much more that kind of plan can cost over your lifetime vs take the big hit in the early years and wind up with a lower bracket for the mid to late years of retirement along with more tax-free money left over to pass on, depending on your spending level.

I think there is no other program like this, other than Income Solver, which is their professional one used by CFP's. I think $20 for a one month trial is a fair price to run as many scenarios as you'd like in that time to get some unconventional ideas on a different way of spending and saving your nest egg.

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Re: Has anyone used Income Strategy website/software?

Post by busdriver » Sat Aug 18, 2018 3:48 pm

spammagnet wrote:
Sat Aug 18, 2018 10:55 am

I have less than a couple of hours experience with Income Strategy but, so far, find no way to control the SS benefit strategy, nor to edit the benefit forecast. (I prefer to include the Trustee's forecast of the trust fund drying up in 2035.) MaxiFi allows both. In it, I set benefits to drop 25% in 2035, and for DW to start benefits at age 62. I know benefits increase 8% per year deferred. In our case, that provides only a nominal difference over the life of our plan. Starting hers early allows us to preserve her assets, makes for much smoother cash flow, and significantly reduces the amount of term insurance required to assure financial security to her if I die early. YMMV.

I'll continue to play with Income Strategy for the rest of this subscription month but probably won't extend after that. I don't see the incremental value to me over MaxiFi alone and the latter is cheaper on an annual basis. That's the only way you can subscribe to it.
I suggest you call them for some pointers on how to work with the program. They worked with me for about an hour at no charge to get a handle on how to make various changes. I'm certain your social security claiming strategy can be changed; however, the default is what will result in the most dollars for your projected lifespan. In my case, it's file at 66 and my wife at 65, (she's a year younger than me). I will restrict my application to spousal benefits until I turn 70, then switch to my own benefits which she will switch to when I pass. I'm sure that they can explain why the software came up with what it did and help you change it to whatever strategy you desire. I suspect they can help with the trust fund issues as well. Let us know please.

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Re: Has anyone used Income Strategy website/software?

Post by spammagnet » Sat Aug 18, 2018 3:52 pm

busdriver wrote:
Sat Aug 18, 2018 3:48 pm
I suggest you call them for some pointers on how to work with the program. They worked with me for about an hour at no charge to get a handle on how to make various changes. I'm certain your social security claiming strategy can be changed; however, the default is what will result in the most dollars for your projected lifespan. In my case, it's file at 66 and my wife at 65, (she's a year younger than me). I will restrict my application to spousal benefits until I turn 70, then switch to my own benefits which she will switch to when I pass. I'm sure that they can explain why the software came up with what it did and help you change it to whatever strategy you desire. I suspect they can help with the trust fund issues as well. Let us know please.
Thanks for your response and suggestions. I'm retiring in a couple of weeks and will have more time to play with it then.

Are spousal-only benefits still an option? I thought those got killed a couple of years ago?

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Re: Has anyone used Income Strategy website/software?

Post by busdriver » Sat Aug 18, 2018 5:03 pm

If you were born on or before January 1, 1954, after you reach FRA, you can choose to receive only the spousal benefit by filing a restricted application. By doing this you delay receiving your own retirement benefits based on your earnings record, until a later date.

I will be retiring in November, so have been actively revising the method of the decumulation plan. I used the Social Security Solutions software, (same company as Income Strategy & Income Solver), a few years back to come up with the method to allow for the most SS dollars for us.

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Re: Has anyone used Income Strategy website/software?

Post by danielm » Mon Aug 20, 2018 11:23 am

Busdriver and Spammagnet,

Thanks for your feedback on those two products. Spammagnet, have you found incomestrategy easier to use for inputting assets (specifically stocks and bonds as they use an aggregator)? Busdriver, the incomestrategy monthly model sort of assumes one would use on a regular basis throughout the year. Have you found this to be the case? Or did you use it a lot during the first couple of months and then not need it so much afterwards?

-daniel-

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Re: Has anyone used Income Strategy website/software?

Post by busdriver » Mon Aug 20, 2018 12:38 pm

danielm wrote:
Mon Aug 20, 2018 11:23 am
Busdriver, the incomestrategy monthly model sort of assumes one would use on a regular basis throughout the year. Have you found this to be the case? Or did you use it a lot during the first couple of months and then not need it so much afterwards?

-daniel-
The first several months I worked with it and have had it manually modified by them to come up with the plan that will work best for us. I haven't really spent much time with it the last month; however, I intend to work with it in November-December time frame to check for possibility of Roth conversion this year. Early next year I will be utilizing 401K to IRA rollover along with NUA, (net unrealized appreciation), transfer and sale of company stock while trying to keep under the 15% capital gains threshold and avoid bumping into 20% capital gains. After I accomplish that, I will re-evaluate if I want to keep the subscription ongoing. I suspect I will maintain it through age 70 or 71. If I'm successful in converting all tax-deferred funds to Roth, I don't see any reason to keep the subscription past that time.

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Re: Has anyone used Income Strategy website/software?

Post by spammagnet » Fri Sep 14, 2018 10:21 pm

Having more free time since retirement, I've played with the software some. An intro session from their software support staff, along with a couple of followup questions, have provided some insight into how it operates. The UI is not the friendliest I've ever used but, once you understand how it works, it's useful. Whether the $240/ or $600/year subscription is worth it is a different issue. For me, probably not, but a month or two is to worthwhile to develop an optimal plan (in their way of approaching things) and to decide whether or not I want to follow it.

For my given circumstances the software concludes that doing Roth conversions in early years "to target [my] adjusted gross income up to $319,998.00" results in the highest present value. Ignoring whether or not you believe that to be true, does a MAGI of $319,800 have some special significance? Is it a break point for taxes or something related?

Thanks

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Re: Has anyone used Income Strategy website/software?

Post by spammagnet » Fri Sep 14, 2018 11:34 pm

spammagnet wrote:
Fri Sep 14, 2018 10:21 pm
.. does a MAGI of $319,800 have some special significance? Is it a break point for taxes or something related? ...
I found the answer to my own question. First, it's 319,998.00, not 319,800.00. Second, It's the level at which IRMAA Medicare premiums go to $428.60. Why that level was specified, rather than a lower IRMAA break point, I don't know.

https://medicare.com/about-medicare/med ... bles-2018/

Code: Select all

2018 Medicare Part B premiums based on income (as reported on your tax return 2 years ago)
Your Annual Income 							2018 Premium Amount
Individual Tax Return 		Joint Tax Return 			You Pay
$85,000 or less 		$170,000 or less 			$ 134.00
$85,001 up to $107,000 		$170,001 up to $214,000 		$ 187.50
$107,001 up to $133,500 	$214,001 up to $267,000 		$ 267.90
Above $133,500 up to $160,000 	Above $267,000 up to $320,000 		$ 348.30
Over $160,000 			Over $320,000				$ 428.60

Txflyer
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Re: Has anyone used Income Strategy website/software?

Post by Txflyer » Sun Apr 07, 2019 3:25 am

Do the reports give you any additional information on your investments and cash holdings other than the recommended draw down strategy? I have several investment accounts and having an analysis showing different views of how the roll up together would be helpful. Growth, value, balanced... types of bonds held or even the underlying stocks and bonds held in the mutual funds or ETFs.

Any chance that is provided by the Income Strategy reports?

Phil DeMuth
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Re: Has anyone used Income Strategy website/software?

Post by Phil DeMuth » Sun Apr 07, 2019 10:34 am

I have spent the past year working with Income Solver, the Income Strategy software for financial advisors. There is a learning curve so here are my thoughts:

I recommend starting with i-ORP, which is free. Once you have that down and a good understanding of the inputs and outputs and how they work together, then -- if your retirement plan is anything but a slam dunk, and especially if you have significant assets, I would move to Income Strategy. This is like going from High School to Grad School.

Even though I'm a cheapskate, I would recommend starting with a more expensive option that includes several hours of phone consultation. You will be looking at the top plan off the shelf, but these guys look at these scenarios all day long and can advise you as to the trade-offs as well as with any issues with your inputs and assumptions that might be skewing the recommendations. They are smart and helpful. If there were a 400-page manual you wouldn't need them, but there isn't, and you do. There is so much money on the line that you want to see through your plan like plate glass. You want an expert looking over your shoulder. The computer is the expert but you also need the person who understands what the computer is doing.

Once I had a plan that I loved, then I would pare back my usage to most minimal coverage or maybe even discontinue it, perhaps re-upping when something significant changed in the tax code or my financial world.

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Re: Has anyone used Income Strategy website/software?

Post by busdriver » Sun Apr 07, 2019 1:00 pm

Phil:

Thank you for your reply. Unfortunately, I am challenged when it comes to I-ORP and never felt like I could work with it properly. I am also unable to work with spreadsheets, so any free programs that run on excel aren't any help to me. I am happy with the Income Strategy product and am still subscribing to the basic $20/mo and will likely continue to do so for the next several years of the Roth conversion process. I have had several sessions with them to fine-tune the plan for our specific situation and feel it was money well spent.

Txflyer:

The program doesn't provide any investment analysis other than there is an asset summary pie chart based on all your investments that you've linked. It also forecasts what your projected growth and balances, (on what I was told), are based on conservative market expectations along with your investment style when all your accounts have been linked. It breaks down withdrawals from taxable, tax-deferred and tax-free accounts. I would recommend that you and anyone else to try the product for a month basic service and see if you feel it's a good product or not and post your thoughts. If it's not to your liking, cancel subscription and you're only out $20. The ability to generate multiple plans and compare results of one vs another to me is a good value.

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Re: Has anyone used Income Strategy website/software?

Post by yobyot » Wed Apr 17, 2019 7:08 pm

Phil DeMuth wrote:
Sun Apr 07, 2019 10:34 am
I have spent the past year working with Income Solver, the Income Strategy software for financial advisors. There is a learning curve so here are my thoughts:

I recommend starting with i-ORP, which is free. Once you have that down and a good understanding of the inputs and outputs and how they work together, then -- if your retirement plan is anything but a slam dunk, and especially if you have significant assets, I would move to Income Strategy. This is like going from High School to Grad School.

Even though I'm a cheapskate, I would recommend starting with a more expensive option that includes several hours of phone consultation. You will be looking at the top plan off the shelf, but these guys look at these scenarios all day long and can advise you as to the trade-offs as well as with any issues with your inputs and assumptions that might be skewing the recommendations. They are smart and helpful. If there were a 400-page manual you wouldn't need them, but there isn't, and you do. There is so much money on the line that you want to see through your plan like plate glass. You want an expert looking over your shoulder. The computer is the expert but you also need the person who understands what the computer is doing.

Once I had a plan that I loved, then I would pare back my usage to most minimal coverage or maybe even discontinue it, perhaps re-upping when something significant changed in the tax code or my financial world.
What an excellent suggestion to start with i-ORP! I've been looking all around for some place to start. We are fortunate enough to have the first-world problem of having done well enough to have plenty of account types, making a distribution strategy impossible to template in just my head.

I've had a subscription to MaxiFi for almost a year. But it doesn't do what i-ORP does as it's first output: tell you which accounts when. I've gone round and round with the support folks at MaxiFi on this point and, despite very detailed responses to my queries, they just don't seem to get it. MaxiFi can tell you what the true, inflation adjusted amount is that you can spend across your lifespan. And it accounts for Medicare part B costs and has great flexibility when it comes to scenario development. But there's a single binary switch for Roths: you can select to either spend them first or not. In either case, the outputs don't tell you which accounts are tapped when. There's also no breakdown of RMDs, which loom large in my initial planning.

i-ORP tells you immediately which accounts go in which order even in the simplest scenarios. As the help says, "The Nominal Withdrawal Report separates ORP from the herd of retirement calculators." I couldn't agree more.

I look forward to spending hours and hours with it to see what I can learn from it.

One advantage of using all these products, IMHO: when you use more than one and they all tell you that you have accumulated "enough" (whatever that means to you) it's a comforting thought. Using all of them can give you a set of data points that let you move from the concern about sufficiency to how to develop the most tax-efficient plan possible.

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Re: Has anyone used Income Strategy website/software?

Post by spammagnet » Thu Apr 18, 2019 10:14 pm

yobyot wrote:
Wed Apr 17, 2019 7:08 pm
What an excellent suggestion to start with i-ORP! I've been looking all around for some place to start. We are fortunate enough to have the first-world problem of having done well enough to have plenty of account types, making a distribution strategy impossible to template in just my head.

... i-ORP tells you immediately which accounts go in which order even in the simplest scenarios. As the help says, "The Nominal Withdrawal Report separates ORP from the herd of retirement calculators." I couldn't agree more.

I look forward to spending hours and hours with it to see what I can learn from it. ...
i-ORP was created and is run by a single person, self-described as "... an octogenarian, well past [his] euthanize-by-date." (i-ORP: FAQ) When he is no longer able to maintain the system personally, the vendor who hosts it for free will continue to host it but there will be no more maintenance. When inevitable OS updates require changes (the code is 30 years old), it will fail. That will be a loss to a lot of us.

The author invites other proposals for a succession plan and can be contacted at orplanner@gmail.org. Unfortunately, I have neither the hardware resources nor software skills required to manage such a project. Hopefully, someone (or some group) does.

roboracer
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Re: Has anyone used Income Strategy website/software?

Post by roboracer » Wed Apr 24, 2019 8:09 pm

I just subscribed to the Premier Version

- Pretty buggy (cryptic errors) with non-existent to abysmal support. Pathetic user manual
- Seems overly optimistic in it's projections

I have signed up for an advisor session. Let's see if it is any better. If not, this is a waste

I signed up for a trial version of WealthTrace, which seems far better from a support perspective. Though it looks not to be equivalent in capability.

yobyot
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Re: Has anyone used Income Strategy website/software?

Post by yobyot » Wed Apr 24, 2019 10:45 pm

Thanks.

I can't wait to hear how the advisor session goes.

anu
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Re: Has anyone used Income Strategy website/software?

Post by anu » Sat May 11, 2019 12:53 pm

roboracer wrote:
Wed Apr 24, 2019 8:09 pm
I just subscribed to the Premier Version

- Pretty buggy (cryptic errors) with non-existent to abysmal support. Pathetic user manual
- Seems overly optimistic in it's projections

I have signed up for an advisor session. Let's see if it is any better. If not, this is a waste

I signed up for a trial version of WealthTrace, which seems far better from a support perspective. Though it looks not to be equivalent in capability.
How was the advisor session

danielm
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Re: Has anyone used Income Strategy website/software?

Post by danielm » Wed May 15, 2019 12:05 pm

I bit the bullet and started using the Basic version of Income Strategy back in the fall. My initial reaction was that it seemed very powerful but a bit buggy. There is an included training session that just goes over basics but doesn't answer any questions about how best to use the product. After playing around with it for a few days I found some definite minor bugs that I reported to them and they have since corrected.

The tech support is pretty bad. I pointed out several issues and they promised to get back to me and didn't. They don't have any sort of email support that I know of.

The product results were confusing and there are settings that weren't clear to me how they should be used. This includes the 'model' portfolios which are used for projection purposes regardless of your actual portfolio. I decided to pay for a one-hour session (which I had with Chris) and that was extremely helpful. He both helped with critical settings as well as better explained how the model portfolios and product work. I spent some more time with the product and had a 2nd paid session with Chris which also was very helpful.

Based on settings, selected model portfolio (which you can customize), personal profile, and actual portfolio (which fortunately can be automatically updated) the software generates a list of suggested and ranked strategies. The strategies include maximizing social security benefits, minimizing taxes, and possibly using Roth conversions. Each strategy has a well defined plan which shows year by year the withdrawals, taxes, Roth conversions (if any), required minimum distributions from tax-deferred accounts, and expected Medicare premium payments. You would typically pick the most optimized plan (the one that results with the largest value at the end of your lifespan or that lasts the longest during your lifespan). Once you get the hang of the software it is fairly easy to run some 'what-if' type of analyses.

There are some things the software does that I'm not sure are optimal. For example, it wanted me to move my REITS index funds from my Tax Deferred accounts to Taxable accounts. The plan includes details on selling and buying assets at the front-end but I discovered bugs in the results that Income Strategy never fully explained.

Overall I think it has been a positive experience for me and at least confirmed summarized projection results I've seen in other similar products. The details on withdrawals over the years is very helpful as that was probably my primary concern going in. I'm not sure how much value there is in continuing the subscription but it does provide rebalancing suggestions. I would only recommend the product if you plan on spending extra money for at least 1 or 2 sessions with one of their planners.

PS - I also tried out Maxifi Planner. The inputting of portfolio information is difficult and doesn't seem very useful as you only enter totals by account types and not by actual holdings. They are not updated automatically so as the markets change you would have to update yourself. The results primarily just try to determine that maximum yearly amount you can spend to last your lifetime. Between the two I've found Income Strategy much more useful.

Hope this helps!

-daniel-

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