Even though I’ve been writing about personal finances for 15 years, our finances have gotten complex. My wife’s military pension and upcoming retirement take a lot of planning. Over the years we’ve acquired rental properties and run side hustles.
In a recent email, Jim pointed out exactly the problem I had come up against. The professionals who had the most experience with this complexity would have charged fees of ten thousand dollars or more. They also wanted to completely manage our finances, which isn’t a good fit for a do-it-yourself investor like myself.
This had me paralyzed with no way to move forward. Fortunately, Jim had a solution, retirement planning software from NewRetirement.
There are quite a few retirement planning websites out there. I find it fun to plug in our numbers and get reassured that we are in a good financial place. Most of the websites boil down to giving you a percentage of retirement success.
NewRetirement is more detailed than any other retirement planner I’ve used. It’s a lot more detailed. I was particularly interested in an option to pay for professional guidance. While I haven’t tried this option yet, I think that a professional having all the numbers and details will help make him/her very efficient.
Let’s look at how to going up and running with NewRetirement:
Table of Contents
- Getting Started with NewRetirement
- 1. Quick Profile
- 2. Income
- 3. Social Security
- 4. Retirement and Savings
- 5. Pension
- 6. Home Value
- 7. Expenses
- Overall Start-up Impression
- The NewRetirement Dashboard
- Coach Suggestions and Articles
- NewRetirement PlannerPlus and Other Upgrades
- Pros and Cons
- NewRetirement Conclusion
Getting Started with NewRetirement
When you first sign up with NewRetirement you are presented with two options to input your data. One they estimate would take two minutes. The other they estimate at eight minutes. I don’t think eight minutes is too long to plan for years of retirement. Here are the steps and my thoughts:
1. Quick Profile
NewRetirement asks about your age and your spouse (if you have one) and their age. One very interesting thing they do is create a longevity age, 10 years more than your life expectancy. You are going to want that extra padding, you don’t want your money to run out.
It was easy for me to add my blogging and dog sitting estimates as well as my freelance work. Adding my wife’s income and pension was easy too. I wish they would let you give a label to the income sources but most people won’t have too many income sources, so it shouldn’t be a problem.
3. Social Security
Next up you add Social Security estimates. I had my estimate handy because I went to the Social Security website and checked it a few months ago. I didn’t have my wife’s estimate, so I just left it as the default setting.
4. Retirement and Savings
It may slow some people down as they gather retirement and savings information. I keep a net worth retirement spreadsheet that I update every month, so moving the over was very quick.
Whoops, I had added a “pension” back in step 2, by essentially giving my wife another income that will happen when she retires. I don’t think it changes any of the numbers, but I fixed it.
6. Home Value
This was again a very straight-forward transfer from my spreadsheet.
Like everything else with the initial set-up, it was very simple. They only needed medical and a number of monthly expenses. Our expenses will change as we send the kids off to college in 10 years, but the graphic says we can model that in more detail later.
Overall Start-up Impression
This was a very quick initial set-up, true to the 8-minute suggested time. It may have been easier for me than the average person because I had most of the basic numbers readily available in a spreadsheet. The average person may need to log into their retirement and mortgage accounts to get numbers to fill in.
However, because you can work with estimates and change it later, there’s nothing stopping you from guessing.
The NewRetirement Dashboard
To spare you the complexity of my situation, I created a fresh account for this review
I looked up some average numbers to plug in. This average family makes $5,600 of income a month, which is around the $67,000 annual average family income. I assumed $150,000 in savings using an average that I found online for a 45-year-old like myself.
I left the other options as their defaults. I kept expenses at $4,500. That may be a lot since housing expenses were captured elsewhere.
As you can tell it doesn’t look good for our average family:
They have a score of 79, which is fair. A little more work can push them in the good range. It’s not great that they may run out of money at age 51, but at least they know where they stand now.
The graph in the middle is my favorite part of the NewRetirment planner. It gives you a map that details expenses over time.
Coach Suggestions and Articles
Fortunately, this family has 12 coach suggestions from NewRetirement’s AI. Since this is a new account there are a number of suggestions I can resolve here. I didn’t update every suggestion, but I thought about them and my plan is stronger than it was before the questions.
Many times the coaching suggestions will direct you to review some articles they created to help. There are a lot of NewRetirement articles. There are almost so many articles NewRetirement could be a standalone content website without any tools and still be extremely helpful. I saved many for future reading. It will surely keep me busy for a long time.
You’ll also receive daily emails, though you can opt out like any service. There’s an active Facebook user group as well.
I like to think that I’m very focused on early retirement, I have had a personal finance blog for years after all. Yet, even I found it all a little overwhelming. The good news is that you can do as much as you want to, everything will work fine if you don’t read all the articles, emails, and participate in the Facebook group.
Finally, NewRetirement also has events and office hours. I can’t think of how they could possibly be more supportive.
NewRetirement PlannerPlus and Other Upgrades
There is one free planning level and three premium options offers different amounts of personalized guidance.
Annual cost: $0
There are several account options and all users start with the free Planner tier.
The free account lets you create and edit all the basic things I described above when setting up an account. I think it is as good as any other retirement planning software I’ve used.
You can enter your estimated savings rate for your working years and your estimated retirement expenses to calculate if you can afford retirement at your current savings rate.
The platform lists your estimated cash reserves by age and estimates at what age you will run out of money if everything goes according to plan.
You can try the free Planner version first and see if it creates a sufficient retirement roadmap. However, you will need to upgrade to PlannerPlus to unlock customization features for more precise calculations.
One drawback to this version is that you can only make broad assumptions. For example, you can list your gross monthly income but not assume a percentage-based salary increase. Ditto for projecting annual passive income returns.
Only being able to enter a fixed monthly or annual amount can skew the calculations. If you’re willing to dedicate the extra time to enter assumptions, upgrading to PlannerPlus can be worth the investment.
But if you primarily want to see if your retirement plans are on track and want a ballpark estimate of your savings balance and net worth by age, the free version has ample tools.
Annual cost: $96
Upgrading to PlannerPlus costs $96 per year and unlocks several customization tools and advanced simulators. You can try PlannerPlus with a 14-day free trial before paying the annual fee.
You can add optimistic and pessimistic assumptions for each planning category to see more potential outcomes. Some of the assumptions you can add include:
- Annual salary increases
- Estimated investment returns
- Inflation calculator
- Social Security cost of living adjustments (COLA)
- Medicare expenses
- Roth IRA conversions
Paid membership also links to bank and investment accounts via Plaid to track your net worth in real-time, similar to Mint and Personal Capital.
There is also the PlannerPlus Budgeter, that breaks your planned monthly expenses into dozens of line item expenses. NewRetirement doesn’t log transactions from your linked accounts but this exercise can help you see exactly how you spend your income.
You’ll get access to tax planning resources and retirement simulators, including a Monte Carlo analysis. A paid subscription also lets you print and download reports and charts.
The platform is relatively easy to navigate but the weekly office hours sessions let you ask a NewRetirement expert how to use certain tools.
Annual cost: $396
There are two plans that offer financial advisor access. PlannerPlus Live is the more affordable option and includes these perks:
- Two 45-minute advisor planning sessions
The first 45-minute session is intended to create a financial plan and the second session follows up on your progress. Each subsequent session costs $150 if you need more guidance.
Consider this option when you need hands-on guidance when the digital-only PlannerPlus platform doesn’t answer your retirement questions.
The NewRetirement expert can help you create your PlannerPlus and help provide personalized advice for major life events.
Annual cost: $999+
Finally, for $999 and up, you can meet with a Certified Financial Planner and have access to that pro-level expert. Personally, this may be exactly what I need for future tax planning.
This plan is the better option for complex financial situations. You can schedule a free consultation to determine if an advisor can be beneficial.
An initial purchase includes two 60-minute consultations and email correspondence between meetings. You can continue at an hourly rate if you need more help.
This price is in addition to the cost of a PlannerPlus or PlannerPlus Live subscription.
Pros and Cons
- Easy to use
- Free plan has a lot of useful features
- Tons of resources to help fill any gaps in your plan
- Calculators can only make broad assumptions
- Free plan doesn’t link to your accounts
- You have to upgrade if you want to consider future raises or cost of living increases
NewRetirement should be part of any DIYer’s retirement plan. It’s extremely helpful to have a chart that shows when certain incomes go away (retiring) and new ones come into play (Social Security). I feared that I would hit the RMD requirements and pay a lot of taxes and NewRetirement’s analysis confirms it.
The other thing that I’ve learned is that we might have too much income as we get older. That’s not a bad thing, but it means that we can stop saving so aggressively and use the money to make the most out of life now.
NewRetirement’s score is geared so that above a 95 is a great position for retirement. Our current score is 379, which is really an ideal situation for someone to be in, financially speaking.