Financial Planning Fridays #7: The Decision Center

Today we wanted to share something with you that we use every day at Presilium: The Decision Center, a key feature of our financial planning software.

After creating a financial plan that shows our clients a step-by-step path to reach their goals, we have tools within the Decision Center that clearly show how a variety of decisions can affect that plan. We can model how each decision will affect the plan this year, and over five, ten, 20, even 50-plus years for their children and grandchildren.

Three common decisions that we often model are things like:

  1. How would their financial plan look if the market fell another x%?
  2. What if tax rates or the rate of inflation changes in the future?
  3. How will a change to my investment allocation affect my plan?

We are able to model almost anything that you can think of and see the impact over long periods of time. We use it to calculate things like the maximum amount clients can spend each year of retirement, or the earliest that they can retire and still reach their financial goals, or to gauge the impact of major purchases, like a second home (or car).

In this example, our client was concerned about market volatility and the impact a significant drop would have on her retirement experience. She was also very concerned about future tax rate increases. Both very reasonable concerns.

By modeling this out in real-time with her, we found that by making a change to their long-term investment mix, the client could still retire on time, even if the market fell by an additional 15% and future tax rates increased by 10%,

This allowed the client to walk out of the meeting with not just peace of mind, but also with a defined plan of action to execute.

This tool is very powerful and something that we love using is CERTIFIED FINANCIAL PLANNERSTM. As such, we are always happy to model any decisions that you may be thinking of to see their impact on your financial plan.

In our next video in this series, we are going to talk about tax-loss swaps and how they can help to save you taxes. They are something that most investors should consider especially when the market is down.

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.