SILICON VALLEY, Calif., Aug. 30, 2018 /PRNewswire/ -- Personal Capital today announced a new feature called Retirement Paycheck that helps clients with a personalized, tax-efficient withdrawal strategy for retirement. Retirement Paycheck provides clients with guidance on how to withdraw money in retirement in a simple, clear, year-by-year, interactive way so they can plan for tax implications and avoid penalties by withdrawing funds from the right mix of accounts. Clients can access the feature now within Personal Capital's Retirement Planner, the company's Monte Carlo forecasting tool, which shows a retirement savings projection that incorporates portfolio return and volatility, annual savings, income and spending goals.
Retirement Paycheck, built meticulously by integrating detailed tax assumptions leveraging the account level tax status, household tax filing status, and the latest state-by-state and federal tax data, is Personal Capital's final step in making the Retirement Planner completely tax aware. The guidance that Retirement Paycheck may help clients extend the life of their portfolios and safeguard their financial legacies.
"How you withdraw money in retirement is just as important as how much you save," said Amin Dabit, Personal Capital's director of advisory services. "There is a lot of complexity about how retirees should pay themselves from taxable, tax-deferred and tax-free accounts. Retirement Paycheck helps provide clients with the clarity needed to withdraw confidently."
According to research, a tax efficient withdrawal strategy can increase someone's chances of not running out of money in retirement by eight percent. A recent Transamerica Retirement Survey found that 57 percent of GenXers and 55 percent of baby boomers cite outliving their savings and investments as one of their greatest retirement fears. Personal Capital's Retirement Paycheck tool helps client feel confident in retirement by clearly guiding clients through paying themselves in retirement.
"For most of our lives, we have a paycheck and we take it for granted. Once we retire, we have to create and secure a paycheck for ourselves out of our own savings. This is arguably the most complex financial decision we will ever make, and the stakes are high: in retirement you get one chance to do it right, the runway is short," added Shlomo Benartzi, PhD, Professor of Behavioral Decision Making at UCLA and member of Personal Capital's Board of Academic Advisors. "Tools that help retirees create a paycheck, and personalize it to reflect their specific financial circumstances, are critical for retirement success."
With Retirement Paycheck, Personal Capital clients can easily:
- See taxable, tax-deferred, and tax-free accounts and get guidance on which to withdraw from, in what amounts, for each year of retirement.
- Potentially increase their chances of having enough money throughout retirement.
- See an indicator to reach out to their advisor if a Roth Conversion or Tax Gain Harvesting strategy is appropriate for the client's situation to save money on taxes.
- Avoid paying unnecessary penalties by planning for Required Minimum Distributions.
- Update the Retirement Planner in real-time to integrate income, spending, and giving goals to ensure most accurate withdrawal amount recommendations and adjust instantly alongside clients' changing needs.
"We're thrilled to introduce this feature to our Retirement Planner," said Personal Capital CEO, Jay Shah. "The technology we build for our users, clients, and advisors has always been what sets us apart at Personal Capital. We want to transform people's financial lives, and with features like Retirement Paycheck, our advisors are doing just that."
About Personal Capital
Personal Capital is a hybrid digital wealth management company based in San Carlos, California, with more than $7.5B in assets under management. The company offers free financial planning tools for investors and fee-based wealth management services, with hubs in San Francisco, Denver, Dallas, and Atlanta. Personal Capital has fiduciary financial advisors across the U.S. For more information visit personalcapital.com.
SOURCE Personal Capital