Kent Irwin, who recently wrote a guest article: Is Suze Orman Right, Can You Be Your Own Financial Planner?, sent me a free license to use his eFinPLAN online financial planning software. In this post, I am going to provide you with my initial experience, and I will follow up with a second post to discuss the 64-page report I received — yes, 64 pages!
Before I begin, I will share a few things I didn’t like — the interface and usability. It is an old school web site that doesn’t have the crisp Web 2.0 look and feel. Also, I felt the web site navigation could be clearer and more intuitive.
Get Your Financial Planning Report In 10 Easy Steps
Now with the negatives out of the way, let me walk you through the 10 steps I took to get my 64-page personalize financial report.
1. About You
First the software asks for some basic information like names, birth dates, annual income levels, marital status, state of residence, average tax rate (using their marginal and average tax rate calculator), and number of children.
2a. Investment Values
Next the software asks for retirement and non-retirement assets, including what you currently have, and your planned yearly contribution to each. The list includes:
- Defined contribution plan (i.e., 401k, 403b, 457 and Profit Sharing),
- Traditional and Roth IRAs,
- Roth 401k,
- Taxable Investment,
- Tax free Investment (e.g., municipals), and
2b. Assets and Liabilities
This is part B of step #2 where you’ll have a chance to list additional assets and liabilities
- Assets — House, autos, personal properties, collectibles, business, real estates, etc.
- Liabilities — Mortgage, credit cards, auto loans, personal loans, etc.
This step was easy for me because I have been keeping track of these numbers in NetworthIQ, so all I needed to do was transferring the information over.
3. Retirement Benefits
This is where you can enter information about your pension and social security benefits. I don’t have this information handy so I just skipped to the next step.
This is a nice feature since I don’t have to know everything to get started. I can always come back to enter more information to improve my report’s accuracy later.
4a. Your Spending
This step asks for annual living expenses, future large purchases, and special income.
Finding out my annual living expenses would have been difficult since I don’t budget. Luckily, I have my information entered in Mint.com (a free online money management software). To find out my annual living expense I just: log in, go to trend, click on “Past 3 months”, and multiply that number by 4.
I left the future large purchases and special income empty at this point.
4b. Money Habits
This is a “personalize” step where the software asks about:
- Budgeting Management
- Spending Habits
- Money Tools/Technology
Here are some of the answers I chose:
- I do not use a budget, but I know where my money goes and I have surplus for savings and investments.
- I do not balance my checkbook each month.
- I use budgeting software.
- I use software to help me track investments.
- I use internet banking and bill paying.
- We are in harmony with our money decisions. Money is NOT an issue in the health of our relationship.
- I would like to increase the amount I give to charities or organizations that are important to me.
5. Investment Preferences
Another personalization step that asks you about:
- Risk tolerance level (i.e., very conservative, conservative, moderate, aggressive, and very aggressive). If you don’t know your risk tolerance level, it gives you a little quiz to help you figure it out.
- Your level of investment knowledge.
- Your preferred method of investing.
- Your investment advisor.
6. Your Insurance
This step asks you about insurances that you have including:
- Term Life Insurance
- Whole Life Insurance
- Long-term Disability Insurance
- Long-term Care Insurance
- Property and Casualty Coverage, and
- More personalization questions about insurance
7. Children’s Education
This step asks questions about your child expected college expenses (in today’s dollar), and the college savings plan that you have in place — i.e., 529, UGMA/UTMA, Coverdell, Savings, Bonds, and other.
8. Your Legacy
I felt bad about this step, because I don’t have any of the important documents listed. These documents include:
- Basic Documents — Will, Power of Attorney, Guardian named for minor children, and Letter of Instruction
- Health Care Documents — Living Will and Healthcare Power of Attorney
- Trusts — Revocable Trusts, Testamentary Trusts, and Irrevocable Trusts
However, I am planning to fix this shortly. I have been meaning to do a review of Suze Orman’s Will & Trust Kit, and this just motivated me to get to the review sooner.
9. Your Advisors
This step asks questions about your current financial advisors and insurance agent (if any). If you don’t have an advisor or an agent (or if you are unhappy with them), you can ask for referrals through eFinPLAN.
In this last step, the software asks you about the expected life expectancy of you and your spouse, expected rate of inflation, inclusion of college expenses and expected large purchases, projected expenses as a percentage of current expenses, assumed rates of return, and increase rates of annual contributions.
Finally…A Personalized Financial Planning Report
It took me about an hour to complete the 10 steps above. But it may take you longer depending on how prepared you are with the various information, and your familiarity with your finances.
To get your personalized report, just click on the “Generate Your Report” then “View Your Report”. Viola, a 64-page personalized financial planning report (the number of pages may vary).
After the report, there’s an additional “What if?” step that allows me to tweak my numbers; otherwise, I can always go back and play around with them until I am satisfied.
How To Purchase eFinPLAN Financial Planning Software
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.