Planning in detail is essential for the successful navigation of your later years, when paid work may cease as a whole or half or we can say partially. It will relive your financial fears as well by providing you a one stop solution.
If we talk about the fees, for a one-time fee of $50, SMI premium-level members have access to such planning via Money Guide Pro , a sophisticated software package normally available only to clients of financial planners who pay more than $1000 for an MGP license. A strength of Money Guide Pro is its ability to model many what-if scenarios.
Develop A Viable Plan With Money Guide Pro
Let us take a quick recap of the log in or a sign in process of the Money Guide Pro . After completing the ‘About You’ section of the software’s sign in process, inputting your age, income, investments, goals (categorized as needs, wants, or wishes), and more, you can check your ‘Current Scenario’ in the Results section. you can check your results and “Probability of Success” which is essentially showing you how likely you are to reach your selective goals.
You can check the “Recommended scenario” by clicking the “Choice” option from the main menu. The software will offer options for improving your plan’s likelihood of success, suggesting clear changes within each of your goal categories. For instance, Money Guide Pro might suggest reducing your hoped for retirement travel budget by a specific amount. (The recommendations are clear, though not always easy to accept!) from there, you could go back to the ‘About You’ section and change your goals accordingly.
Stress Testing Your Plan Through Money Guide Pro
Do you have a workable plan in place? If yes, then Money Guide Pro enables you to test your strategy against a series of threats. There is a tool in the software named “What Are You Afraid Of?” you can differentiate various eight numbers of risks. (If you see a blue triangle with an exclamation point next to any of the risks, that means it relates to a specific concern you noted in the ‘About You’ section.)
You will watch how each risk could impact your ability to achieve three sets of goals: All of your goals (those you categorized as needs, wants, and wishes), just those goals labeled needs and wants, and only the goals you identified as needs.
You can also weigh the impact of combining multiple risks (perhaps the husband dies early and the wife needs long-term care at a certain point) by locking one risk and then adding another. Here are the risks Money Guide Pro enables you to evaluate, along with suggestions for managing them.
#1 Concentrated Position:
More than 10% of your portfolio consists of one security then this feature will be used by the users. You can see how various levels of decline in the value of that one holding could impact your plan’s chances of success, which may prompt you to decrease your exposure to that security.
Money Guide Pro uses a 2.25% default inflation rate throughout the data entry process, but here is where you can put your strategy against more extreme rates. You can not go all 1979 on your scenarios when the inflation topped 13%, but you can explore options up to 5.25%.
Investing in asset classes that have an excellent chance of outpacing inflation, is one of the best defenses against inflation. Maintaining some exposure to stocks throughout an individual’s retirement is the exact use of Money Guide Pro for some investors. For every conservative investor who has dialed their equity exposure way back, these inflation scenarios may prompt a shift towards a somewhat higher equity allocation.
#3 Social Security Cuts:
You will read thousands of articles about the Social Security System’s deteriorating financial condition. What will Congress do to shore up the system? No one can say for sure, so this threat is particularly difficult to gauge. Still, Money Guide Pro will help you see how various levels of reduction in SS benefits would impact your financial plan.
#4 Low Returns:
The risk may produce on your investment to double check your portfolio’s asset allocation, that actually impacts estimated returns. If the plan is unrealistic for you to invest any more aggressively, the best solution may be to boost your strategy’s margin of safety by investing more each month, because the simple rule we all know is “High risk high return, and low risk low return” so make sure you diversify the risk that helps you to cover the gain according to your expectations.
Other than that you can take help from the Die early / live long concept, take help of mediclaim, health care, or LIC (Life Insurance Company) policies, you can also gain benefits from the special retirement plannings also. These are the back up plans, you can not totally depend on these plans, but these help your family a lot.
Also Read: Financial Tips For Young Adults In 2022
The Final Thought:
Financial planning is such an essential thing that you must do at a certain age, because after the age of retirement your monthly income may totally stop, that affects the whole family. That is why Money Guide Pro will help the users by suggesting where to invest, how to invest, and how much to invest to secure an individual’s life after retirement.