It’s been almost a year & a half since the post entitled DIY Financial Planning … Is it for You? went up. I have learned a little more about the whole process since then. The biggest lesson is that financial planning is pretty complex & winging it is probably not a good idea. While financial planning is built on forecasts & estimates, it remains crucially important for retirement planning. We need to make a plan with the best estimates available. A plan provides a foundation. Something to work with & measure against going forward.

I continue to like using the Adviice platform to massage the data & predictions into a plan. This platform will not be for everyone. It does take time to learn. I sometimes worry about what might be missing. Starting out, I made errors that I only caught much later in the process. Though I used a pretty straightforward scenario, I still made mistakes & found myself wishing there was a do-over button on a number of occasions. I have to accept most of the responsibility for this.  I should have watched a few of the instructional videos first!

It’s still just $9 a month but, now, you can convert to an even more frugally attractive $49 a year plan. For what you get, this is pretty amazing value. At this price, you get a lifetime of financial planning for what you might pay a professional for developing a one-time plan. Which is out of date when you walk out the door. A plan requires updating & tweaking periodically. Aside from the many changes that can impact our own lives directly, much financial planning is dependent on estimates. Although data driven, these inputs will change over time. Many professional planners, for example, use the projection guidelines published by sources like FP Canada™ & the Institute of Financial Planning. As does the Adviice platform. Now this is good information to plan with. Rather than a DIY investor thinking that the annualised 15% returns from the past decade or so will continue indefinitely into the future! While these projections are done by professionals (& they do put a lot of careful thought & work into this), it’s still just a set of best guesses. Reality will typically be different, either up or down, from the projections. These projections are updated annually. Ideally, we should be reviewing our financial plan following any major changes too. That might be the result of job loss, a health issue, an inheritance, a market crash, a lottery win, & who knows what else.

A retiree might benefit from an annual review, in order to confirm the spending plan for the next year or two. And maybe to confirm that the budget for the retirement home is still intact, should it be needed down the road. All that reviewing & confirming stuff can be more challenging if we need to pay a financial planner to do the reviewing & updating for us. Some of us can take a dismally frugal view of spending money on such things, right? I know it won’t be for everyone, but tools like Adviice can be part of the solution to that problem. With a bit of luck, AI will continue to to take on even more of the financial planning burden. These are complex tools & AI may enhance the usability, while adding some protective guardrails to help defend against our potential for errors.

In this regard, it can be very useful to consider what-if outcomes. Creating alternative scenarios in Adviice is now more comprehensive. For example, you can more easily look at the impact of the earlier demise of one spouse. Previously, you needed workarounds for this. Now you can just choose an age from one of the options in the AI cluster & hit recalculate. The low-cost, single-user version limits the user to one plan, but you can create up to 10 scenarios around that.

The platform does pretty much most of the things you’d expect. With many of these managed by making choices in the AI options. You can start OAS or CPP at different ages. And for each spouse. Set it to prioritise drawing down accounts in different order, beef up tax free savings accounts, limit OAS clawback potential, modify retirement spending up or down, smooth out taxes, manage the size of the after-tax estate you want to leave the kids, & more. Within each scenario, you can target something different. Just select & enable the appropriate options within the AI cluster. You can then use the “Compare” function to see the differences in outcomes between the scenarios. Along with a graphical representation of net worth, the columns of information for each scenario allow for fast & easy comparisons of all the useful information, like income, including CPP & OAS, taxes, lifetime withdrawals & spending, & so on. It’s all pretty cool.

It’s also interesting to colour outside the lines sometimes. You can build a scenario that cuts a portfolio’s value in half, for example. Then play with the AI cluster options to figure out how to survive that scenario. Since there are Monte Carlo simulations built in, you don’t need to do extreme things like this but, hey, it can be fun, terrifying, & educational! You can’t directly modify the FP Canada projection guidelines for returns in the baseline data, nor should we want to for the most part. However, there are workarounds to test with numbers worse, or better, than those guidelines. Create a new scenario & you can then make changes to the return metrics for each account under the “Advanced Options” button. Here you can bring down the returns to, for example, stress test a scenario where you think the guidelines might now be overly optimistic. Great options for those who like to play. And, after all that playing, you might end up with a plan. In fact several variations of a plan!

The easiest way to explore what’s possible is via the Adviice YouTube channel. You can also get more insight at the Adviice community on Reddit. Here, you’ll also get a good handle on how they respond as a company. They’ll acknowledging feature requests & partake in Q&A interactions that will give you a great feel for the user experience. They will also acknowledge where something is lacking & provide feedback on whether it’s being address in future releases. All pretty good & pretty transparent, I think. I have no affiliation but I am enthusiastic about the product & the company. For me, Adviice is a whole lot better than trying to create financial & retirement planning scenarios with my limited spreadsheet skills. Even with the Adviice platform, I don’t trust myself fully. I still might miss something important. So having a professional run a plan periodically is probably wise. A retirement plan is just too important a thing to allow for any unnecessary uncertainty or discomfort.

Inside the Adviice platform menu, you can actually book a review session with a real professional. One that can use the baseline plan that you created within Adviice. There are several advisors on board the platform, offering a range of services. These range from a review, all the way through to a comprehensive planning & support package. Some of the pricing is quite competitive, particularly for an oversight or review exercise. I don’t have any direct experience with these services, so you’ll have to assess this option further before making a decision on whether it might be right for you.

There are other new platforms coming into this space now. I haven’t played with them yet & I don’t know how they compare. But this is great news. Financial planning is so important & I know I wasn’t doing the greatest job with a spreadsheet. These tools can shed more light in the darker corners & that can make for a better plan. Potentially one a better outcome. These are the kind of tools that everyone needs access to. As AI improves, I’m looking forward to seeing them get smarter & easier to use. Hopefully this progress will deliver an even better product & at an affordable price. Easy to use, more idiot proof (I’m the idiot referred to here!), & affordable are key attributes. Many people are discouraged by the cost of a having a plan done by a professional, so affordability does matter. But costs aside, one thing is certain: we can all benefit from having a good plan. Especially one prepared far enough in advance to help us avoid going into a poorly planned retirement!

To sidestep from Adviice for a minute, I’ve also enjoyed playing with the TPAW Planner. This is a very interesting, & free, online planning tool that was developed by Dr. Ben Mathew. You can learn more about it on the Bogleheads thread for Total Portfolio Allocation and Withdrawal, that’s where the TPAW initials come from. This is based on the “lifecycle model” & it considers a variable withdrawal as a more appropriate strategy for retirement. There are a lot of Greek letters used in the formulae employed by the lifecycle model! The TPAW Planner, however, keeps all that under the hood & it is an easy tool to use. But you might not be getting all the detail you need either. It doesn’t get into taxation, all the registered account stuff, etc. so it’s not as all-embracing of detail like we’re used to seeing on Adviice, or on the financial planning video clips from the pros. It doesn’t cover all the bases that tools like Adviice & the other Canadian solutions do. But it might help provide another perspective of what things might look in retirement. It might be a good comparison exercise for any financial plan you might already have. Or to one you develop in Adviice or one of the other tools. TPAW Planner is pretty easy to use, but be sure to spend time reading up & understanding it, a lot, before trusting the results. There is a lot more to financial planning, & to this methodology, than first meets the eye. Simplicity can hide some of the dangers from sight. Even from experienced DIY planners.

Whatever you choose to do, even if it’s a spreadsheet or on a coffee stained napkin, a financial plan is hugely important. Unfortunately, sometimes we don’t know what we don’t know. If you don’t have the knowledge & confidence to do it yourself, keep yourself safe & pay for professional advice. We don’t want to discover we didn’t know something important when we’re half way through retirement, eh?
Of course, the other challenge might be figuring out how to choose a good financial planner. That’s a whole other question but, at the very least, make sure they’re appropriately qualified & certified. Be careful out there!

If you want to learn more about saving & investing, please check out Double Double Your Money, available at your local Amazon store.

Important – this is not investing, tax or legal advice, it is for entertainment & conversation-provoking purposes only. Data may not be accurate. Check the current & historical data carefully at any company’s or provider’s website, particularly where a specific product, stock or fund is mentioned. Opinions are my own & I regularly get things wrong, so do your own due diligence & seek professional advice before investing your money.