4 Great Tools to DIY Your Own Financial Plan
There was a time when Mark Felton put together a financial plan the old-fashioned way: With spreadsheets.
The 59-year-old from Stilwell, Kansas, had always been reluctant to pay an ongoing portfolio-management fee to an adviser, so he wanted to try financial planning on his own. Because he had no formal training in that area — he works in the legal department for a cell-phone carrier — that was a pretty big hill to climb. He found the spreadsheet method cumbersome, and he figured there might be some gaping holes in his knowledge. So last year, he started toying around with do-it-yourself software.
“As I got into my fifties, I realized I didn’t have a great financial plan,” says Felton, whose brood includes four adult kids and three grandchildren. “So I started looking around and subscribed to few different programs. I wish I had discovered this software a lot earlier.”
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Everyday users now have access to suites of tools that are approaching professional levels. While not as sophisticated as the enterprise software advisers use — programs such as eMoney, MoneyGuidePro, RightCapital, NaviPlan and Holistiplan—consumer-oriented tools are still impressive. They are available from multiple providers, with different interfaces, approaches and price points.
These programs won’t replace advisers, whose role involves much more than just number-crunching. But for those who are looking for a DIY option and enjoy digging into the data, the choices are better than ever.
“The evolution of DIY planning software has been tremendous,” says Stephen Kates, analyst for Bankrate. “It has come a long way, even compared to what was available just a few years ago. A basic retirement calculator used to be all you’d have if you didn’t want to talk to an adviser. Now these products have become so good.”
Although you may be charged a fee to use some of these DIY services, you’ll likely pay less than you would to an adviser, whose typical annual fee is about 1% of assets under management. Below, we’ve shared pricing as well as some notable features for a few major programs.
Boldin
Best for: Those who prefer a data-rich deep dive into retirement planning.
Formerly known as NewRetirement, Boldin is one of the most prominent offerings. More than 450,000 people have built plans on the platform, with users managing more than $300 billion in total assets.
Among Boldin’s features: A calculator that helps you set a strategy for converting traditional retirement accounts to a Roth IRA, and a tool that lets you compare and contrast the outcomes for multiple financial scenarios. For instance, you can test out different inputs for when you or your partner will retire, your projected health care expenses or what the inflation rate will be. Note that these features kick in at the paid tiers, which start at $12 monthly, while the free version is more limited.
(Image credit: Boldin)
“It’s not much more than what you pay for a Netflix subscription, but you’re getting tons of information and data for that money,” says Ben Henry-Moreland, a certified financial planner and “Senior Financial Planning Nerd” at Kitces.com, which supports the financial advisory industry. “It offers a lot of bang for the buck.”
You choose the level of service you want, from a basic subscription to more-comprehensive advisory services from Boldin’s in-house team. The tiers include a free version as well as PlannerPlus, which is $12 a month and includes more-advanced features. For $31 a month, you can get assistance from a coach to navigate the tools. And Boldin Advisors comes with comprehensive guidance from a CFP. You’ll pay a flat yearly fee starting at $550 for ongoing advisory support. Or, for a thorough, one-time review of your financial plan, try the Retirement Plan Checkup, for $2,800.
Mark Felton was drawn to the software’s sophisticated Monte Carlo simulations, showing the probabilities of how long his money will last under different scenarios. But as he gets closer to retirement, the most helpful function has been figuring out cash flow, “seeing where the sources of income will be — Social Security, a pension or withdrawals — and how to draw them down most efficiently,” he says. “I hadn’t even considered some of these things, like income taxes on required minimum distributions. That’s been the biggest eye-opener.”
MaxiFi
Best for: True DIYers who want a realistic assessment of how much they can spend in retirement.
Larry Kotlikoff, a professor of economics at Boston University and a well-known personal finance expert, developed MaxiFi. It has been online since 2017, with tens of thousands of users, after starting out as a desktop version called ESPlanner back in the 1990s.
After you answer an initial, 10-minute series of questions, MaxiFi generates what it calls a Base Plan. After that, you can explore more in-depth scenarios, such as with the Maximized Plan, which analyzes ways you can safely increase your discretionary spending. For example, it helps you narrow down a Social Security claiming strategy to boost your benefits and calculate ideal withdrawal rates from your retirement accounts to minimize taxes.
MaxiFi claims to remove guesswork that could lead to off-target numbers, instead employing “economics-based planning.” Specifically, it zeroes in on what economists call consumption smoothing: Figuring out a consistent and affordable level of spending so that you’re neither splurging nor slashing costs based on temporary circumstances.
In that sense, the results tend to be more “logical,” says Kates. Instead of letting you enter growth assumptions for your portfolio that may be too large, MaxiFi paints a realistic picture of “what you have and what that will be likely to produce,” he says.
(Image credit: Maxifi)
MaxiFi’s Standard level costs $109 a year, and the Premium version is $149 a year, with the latter featuring elements such as life insurance contingency planning in case a spouse passes away sooner than expected, a tool to determine a Roth conversion strategy, and a Monte Carlo function. A typical Monte Carlo analysis might be limited to studying assets, projected growth and the chance you might go broke, but MaxiFi’s looks at more data, such as specific family circumstances, more-dynamic spending based on market conditions, and the risk to your desired living standard, so you can tweak the dials as needed.
MaxiFi’s Premium Plus level, at $359 a year, offers more-specialized guidance as you navigate the tool’s features and includes the annual Flight Check service. That’s a one-hour, private online session with an expert to walk through your plan, check your data inputs and assumptions, and explore alternative scenarios you may not have considered. You can also sign up for deeper assistance from an expert; with the $1,000 Co-Pilot session, for example, you join a CFP for a two-hour call to build a financial plan. But MaxiFi doesn’t provide ongoing advisory services.
Empower
Best for: Those looking for free tools to analyze their portfolio and test out their retirement plan.
The popular site Personal Capital was absorbed into Empower starting in 2020, which is where you’ll now find its dashboard and tools. Its offerings are a little more basic and straightforward compared with, say, Boldin’s tier that generates a plan from more than 250 data inputs. But a key appeal of Empower’s Personal Dashboard is that it’s free, so it’s a snug fit for those who don’t have any interest in an ongoing subscription plan.
“It doesn’t have quite as many functionalities, but it still works very well,” says Kates. “It’s a good option for someone who is dabbling but doesn’t want the up-front cost. It’s like a high-touch robo adviser.”
(Image credit: Empower)
Among its useful features are the Retirement Fee Analyzer, breaking down how much of your portfolio could be lost to management fees (more than most people realize), and the Investment Checkup, which compares your current allocations to recommended, target ones. But it doesn’t have the depth and breadth of some other software, such as tools that address Roth conversions or Social Security claiming strategies.
The program is fairly insistent that you electronically link it to all your financial accounts. That’s useful for assembling a complete and current picture of your finances, but it may give you pause if you’re concerned about privacy or security. You can enter data manually, but not in an easy or intuitive way.
If you want one-on-one consultations with an adviser and a more bespoke plan, you can use the Personal Strategy service, which is open to those with at least $100,000 in investable assets. But you’ll pay an annual fee of as much as 0.89% of assets under management, which is the kind of charge that many DIYers are seeking to avoid.
Read more: Empower Review: Is This Financial Hub the Right Tool for You?
Origin Financial
Best for: Users who would like to leverage AI to manage budgeting and spending.
If you want to lean into artificial intelligence — with a personal finance twist — Origin offers a unique way to explore what’s possible. It bills itself as a “personal AI financial adviser,” and after you connect your accounts to it, it essentially gives your finances an x-ray in typical areas, such as spending, investing and forecasting how your money may grow. Recently, you could sign up to use Origin for just $1 for the first year. It renews at $99 annually, so set a reminder near the one-year mark to evaluate whether you want to continue the service or cancel it.
Origin isn’t quite as retirement-focused as other software, and it leans toward helping you monitor day-to-day finances, such as examining your current spending patterns. For example, its AI Budget Builder instantaneously creates a budget based on your income and spending needs, and it can help you review and cancel any monthly subscriptions that are gobbling up cash.
As you might expect with an AI tool, there’s not much output from live human beings. Conversational AI models run the show, using contextual reasoning, market data and your own financial history to inform the answers. That makes up part of Origin’s appeal: You can ask it questions and get tailored responses, as you would with ChatGPT, which can be an intuitive way to understand your finances.
“It’s much more of a natural-language chatbot interface,” says Henry-Moreland. “Rather than all numbers, all the time, you can ask it things like, ‘What can I do to save for a home in five years?’ And you get an answer. From a user standpoint, I like that.”
How to use these tools
Whichever program you choose to go with, keep a few general principles in mind:
Run multiple scenarios.
If there is anything predictable about life, it’s unpredictability. So if you are entering only one set of data and assumptions — about income or savings, projected investment growth, lifespan, and so on — then you’re getting a narrow view of how much you need to save and potential outcomes.
A primary advantage of these software programs is that you can move the dials on any scenario and instantly come up with new figures.
“One of the biggest mistakes people make is not accounting for variability,” says Charles Rotblut, vice president at the American Association of Individual Investors. “Two classic errors are that either you or your spouse will live longer than you expect, and that you might need long-term care earlier than you think. Even just changing life expectancy, from 85 to 90 or 95, will drastically change how much savings you’ll need and how much you can withdraw. So assume a lot of different scenarios, and run them all.”
Know the limitations.
(Image credit: Getty Images)
DIY software is terrific at coming up with projections. But that’s only the first step of any fully realized plan. The next question is, what do you do with those numbers?
That’s where interaction with a human being could be helpful. When it comes to software programs, “the biggest shortcoming to me is the focus on numbers, like probability of success, without a lot of the context that you need to do something productive with that,” says Henry-Moreland. “That’s the danger when you take tools developed for professionals and give them to a consumer audience: You might get Monte Carlo probabilities in front of you, but you don’t understand the way forward.”
Revisit your conclusions.
Taking the time to enter all your financial data correctly can be laborious and time-intensive, so you may not feel like going back and doing it all over again in the future. But you should revisit those results.
“Even if you only subscribed to a program to use it once, you should go back later and update those scenarios,” says Rotblut. “Because as you get closer to retirement, things will change — how long you decide to work, what your health is like, differences in lifestyle or spending, or what the stock market has been doing. All your assumptions may be very different from what you actually encounter.”
Mark Felton agrees, and he even takes it a step further: He occasionally meets in-person with a local group of about 10 other DIYers. They share their financial plans, bounce ideas off each other, and get some critical feedback.
It might seem a little counterintuitive to chart a financial path on your own, only to hash it out with peers. But for Felton, that approach combines the best of multiple worlds: leveraging tools similar to what the pros use, avoiding fees that draw down your assets, and talking things through with other finance aficionados to see where your blind spots might be.
“I view it as a tool to use on an ongoing basis,” says Felton, whose rough plan is to retire by 65 — only a few years away. “You don’t need to redo your plan every day or week or month, but you can’t just do it one time. The markets change, the environment changes, and your personal circumstances change.”
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
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