Planit:Release Notes Version 5.16

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PlanPlus is pleased to announce the release of version 5.16. This release introduces some exciting and powerful new features and we hope you will find them valuable. Below is an overview of the new features and enhancements, as well as an update on any bug fixes and corporate administrative improvements.

NEW FEATURES AND ENHANCEMENTS

Income Splitting

This long awaited feature is here! You now have the ability to incorporate Pension Income Splitting into your retirement projections for your clients. On the Planning Assumptions screen, in the “Tax Assumptions” area, you’ll see a new option that allows you to identify if you wish to include income splitting for your clients. The default is for this to be turned on. For those rare occasions where you might not want to do income splitting, you’ll turn off this check box.

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When this feature is set to “Yes” the tax calculations in the system (Both in the Modular Goal Planning and Life Goals Planning) will recognize income that is eligible for income splitting and reduces family taxes by splitting that eligible income to get the best end result.

If you were to look at the taxes payable in your analysis without income splitting and then look again after turning on the income splitting option, you'll find that your taxes overall will be somewhat lower when using the income splitting feature. If you look deeper at the taxes paid each year after retirement, you'll see that the lower income spouse will pay more in taxes and the higher income spouse will pay less. This will be apparent when you have entered a defined benefit pension plan revenue stream and flagged it as that revenue type and will also be apparent after age 65 since at this point the analysis will balanced the taxation on the RRIF withdrawals to split between spouses to minimize overall taxes for the family.

Certainty of Outcome Analysis

With this release you'll find a new tab on the Modular Goal Flow "Results Screen". It's called “Certainty of Outcome”. The analysis on this new tab helps you to illustrate to your client the probabilities of being able to fund their goal, which in the example below was a retirement goal of $52,000 per annum.

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The graph seen here illustrates how the client's capital will grow and deplete over their lifetime given your various assumptions. The black line shows their expected results with a 50% chance of doing better and a 50% chance of doing worse.


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One thing you will notice is that the black line is plotting the same values as the capital graph you see in your modular goal report and the bands above show the probabilities of doing better and the bands below show the probabilities of doing worse. In this case we created an analysis that had a small surplus, so it shows the black line running out of money at the end of the client's time horizon. That is why the Percent of Goal Achieved seen in the screen shot was 101%. The client had more than enough capital to last to the end of their lifetime with a small surplus.

But note the probabilities of doing better or doing worse are also illustrated. There is a 3% chance of being in the white area, a 12% chance of being in the dark red area, a 35% chance of being in the light red area (which ends at the expected result) line, and then there is a 35% chance in being in the peach area and a 12% chance if being in the dark blue area. When you hover over the graph you can see the values for each of these plotted lines. The intention with this graph is to help clients understand the concept of probabilities. It’s one thing to say your expected return is 6% and you have a 50% chance of being lower than that and a 50% chance of being higher than that . . but this graphic illustrates the impact those probabilities have on their capital. Your money could run out much sooner than expected or last much longer than expected and in fact even end up with a large surplus at the end of the day. Again, the purpose of this graph is to help client’s understand that rates of return can be projected, but no one can control what the future holds. With the probabilities identified, client’s are made aware of all the possibilities. Note also that in phase two of this feature we will be tying this graph to actual performance so you can track your client’s ACTUAL results against their projected results to see where on the graph they are from one year to the next.


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You also have the option to change the time period viewed in the graph (both on screen and in the report). The above graph shows us zoomed in to only view the first 5 years.

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Reliability Forecast Enhancement (Certainty of Outcome)

One of the very useful components that is part of the Modular Goal Flow is the Reliability Forecast. However we have found for a long time that advisors had had a great deal of difficulty in explaining the graph that goes with this report.

As part of this release we have replaced the former Reliability Forecast graph with the new "Certainty of Outcome" graph. See a sample below. This will tie in nicely with the view of this graph on the screen while in the Modular Goal Flow and allow you to help the client understand the chance of doing better or worse than expected when it comes to their projected rate of return.

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