We would like to thank our valued customers for their continued support and vital feedback, without which we would not be able to stay ahead of our competition on so many levels. We strive to improve our application with one goal in mind, to bring you features that mean something to your practice and that help you be a better advisor, help more clients, and grow your business.
PART 1 | ADVISOR PORTAL
NEW - Update to the calculation of Current Age
Until now, the system would calculate the current age of the client and the spouse, for planning purposes, as the age of each person “as of today”.
This method would allow all the reports and charts to show the current age of the client and spouse. Unfortunately, it would also cause a change in results throughout the year, as each person’s birthday would pass, and it made it difficult for the user to tie events to specific point in time.
Therefore, we decided to rework the calculation so that all charts and results will now display the age each person will attain in the current year, thus ensuring that no matter what the current date is, all results will be consistent throughout the calendar year.
For example, with the previous logic, if the user was to open a scenario for a client born on 04/20/1953 at the beginning of the year (Jan 1st), all reports and charts would have shown an AGE/YEAR pair of 61/2015. If the same scenario was opened later in the year (Jul 1st), all reports and charts would have shown an AGE/YEAR pair of 62/2015.
With the new logic, no matter when in the year the scenario is opened, all reports and charts will show an AGE/YEAR pair of 62/2015.
NEW - Month of Retirement
You can now choose the month in which each person will retire, which in turn will allow for a finer tuning of cash flows such as salary, living expenses, and any other item which is tied to retirement.
In the options available for this new input, along with every month in the year, is the Birth Month. This allows the user to replicate the functionality as it was before this update.
By specifying a Retirement Month, the user can now define how much of their salary a person will receive in their retirement year, or how much of their pre and post retirement living expenses they will need to satisfy.
For example, if the user sets a person to retire in the current year with September as the retirement month (last month), the system will process 9 months of salary for that person in current year.
UPDATE - Proration of Start and End of Incomes and Expenses based on month
We enhanced the inputs for the proration of Other Incomes, Other Expenses and Pensions by replacing what was once a simple selector (true or false radio button) with a Month selector.
This enhancement goes hand in hand with the new Retirement Month input, and it allows the user to choose in which month an income/expense will begin (first month), and in which month it will end (last month).
Users can select the first month on the starting year of the income/expenses and the last month of the last year. Available selections are the calendar months as well as the dynamic month variables Retirement Month (based on retirement month of the owner) and Birth Month (based on the birth month of the owner).
NEW - Survivor Benefit for Pensions
We have introduced the Survivor Benefit option for Pensions. Survivor Benefit can be specified as a percent of the original benefit or as a dollar amount.
Survivor Benefits will start on the year of death of the original pension owner, or the next year, depending on the pension proration settings.
For example, if the pension has a proration setting with the Last Month set as December, the full annual value of the original pension benefit will be paid out on the year of the owner’s death.
As another example, if the Last Month is set to be August, on the year of the owner’s death, the pension will pay out 8 months’ worth of the original pension benefit and 4 months’ worth of the survivor benefit.
NEW - Inherited IRA and Inherited Roth Accounts
We added two new account types to the system, Inherited IRA and Inherited Roth. Both types can be used in creating a manual account or chosen as a type when importing accounts through data aggregation or any other integration.
Both accounts share similar additional inputs, which can be found under the Planning tab. The new fields are:
Who was the account inherited from?
Date of Birth of the original owner
Date of death of the original owner
Distribution factor based on
Users have to provide information for these inputs in order to properly calculate the distribution method and to help the system calculate the correct distribution factor based on rules from IRS Publication 590-B.
Firstly, we need to know if the previous owner was the spouse of the new owner. This will determine the options available.
The date of birth and of death are needed to determine whether the original account owner died before or after the required distribution age of 70 ½, whether the 5 Year distribution method is available or not, and how the distribution factor should be calculated.
Note: 5 year method option is only available if the original owner died within the last 5 years and if the original owner was younger than 70 ½.
Users may also specify a birthday of the person whose life expectancy will be used as a reference when calculating the distribution factor. By default, the system will use the date of birth of the new account owner to calculate the distribution factor; however, if the distribution method was not selected within the prescribed time, the IRS will require that the distribution factor be based on the date of birth of the eldest beneficiary of the original account. For this reason we allow the user to specify the effective date of birth to be used.
For example, the user adds an Inherited IRA. This was not a spousal inheritance, there were multiple beneficiaries, and the account was not split within the period set by the IRS. The original owner was born on November 08, 1958 and died on March 01, 2013. The oldest account beneficiary was born on September 01, 1955.
To define the initial distribution factor, the system calculates the age of the specified beneficiary in the year following the year of death of the original owner – 59. The initial distribution factor, as per Table I (Single Life Expectancy), is 26.1. This factor will be reduced by 1 for each consecutive year after 2013. Thus, in the current year 2015, the required minimum distribution from this Inherited IRA account will be based on factor 24.1
The Inherited Roth account has similar controls on the Planning tab, with the addition of a field for the “Year in which the original account was opened”. This parameter helps determine if the five-year holding period rule has been met or not, and therefore if there will be any taxes associated with the withdrawal.
NEW - Guaranteed Living Benefit for Traditional IRA Accounts
To model annuities nested inside Traditional IRA accounts, we have added the Guaranteed Living Benefit option on the Advanced tab of the Traditional IRA - Account Details screen.
Enabling this option, along with specifying the distribution schedule, will ensure that distributions from this account will continue even after the account has been depleted.
PART 2 | CLIENT PORTAL
Client Portal Welcome page
In line with our effort to improve usability of our portals, we have now introduce a Welcome Tour for the client portal. On their first login, clients will be presented with the new welcome page, which provides a brief introduction on how to use and how to navigate within the client portal.
Clients can choose to skip the tour and go to the profile home page by clicking on “Start right now”.
Custom subcategories in the budget tool
The user can now add custom subcategories to the budget tool and use them to categorize transactions.
To add a new subcategory, follow these steps:
In the budget tool, select transactions and click “Edit Selected”.
Select one of the available top-level Categories on the left.
Under Sub Categories section on the right, click “Add New Sub Category” and type a name.
- Click “Save”.
Transfers and Adjustments
When a transaction is classified under the “Transfer & Adjustments” category, it will not be included in the Budget and Spending chart.
To classify transactions as “Transfers & Adjustments” follow these steps:
In the budget tool, select the transactions and click Edit Selected.
Under Categories, click on “Transfer & Adjustments”.
Select one of the available sub categories or add a new one.
- Click “Save”.
Inherited IRA accounts
We added two new account types to the system, Inherited IRA and Inherited Roth. Both accounts share similar input screens and contain the following new fields:
Who was the account inherited from
Available options are “Spouse” and “Other”, and determine some of the additional options available on the account.
Available options are “Life Expectancy Method” and “5 Year Method”
Note: 5 year method option is only available if the original owner died within the last 5 years and has not reached age 70 ½ by that time.
Distribution factor based on
This date usually represents the date of birth of the beneficiary who inherited the account, however, if the distribution method was not selected within the prescribed time, the IRS will require that the distribution factor be based on the date of birth of the eldest beneficiary of the account. For this reason we default this input to the current owner’s DOB, but allow the user to specify the effective date to be used.