Napoleon Hill, author of the ChooseFI staple Think and Grow Rich, famously said, “Plan your work and work your plan.”
If you know anything about the journey to Financial Independence, you know that achieving it means having a plan for your money. If you don't have a plan, retiring early may be something you talk about but never accomplish.
For ChooseFIers, NewRetirement.com gives you the FI plan you need, one you can work with to meet your FI goals.
Using your data, NewRetirement allows you to create models for a huge variety of financial scenarios. The planner then generates graphs that make it unbelievably easy to map out your FI target and plan to meet your goals. It accounts for everything you need to determine how much money you have, how much you need, and how you can put your money to work in order to bridge that gap quickly. Try out NewRetirement for Free
TABLE OF CONTENTS
- How NewRetirement Works
- Why NewRetirement is a great planner for FI
- NewRetirement Vs. Competitors
- Pricing Plans
- Pros and Cons
- Final Thoughts
How NewRetirement Works
Where other plans are more complicated and less user-friendly, NewRetirement is easy to use and only requires basic information from you to get started.
First, you'll answer some preliminary questions about your age, retirement goals, income, assets, expenses, and health. These are basic questions and should take 5-10 minutes to answer; you add more of the details and nitty-gritty later on.
Once you've finished entering the basic information, New Retirement generates a Lifetime Retirement Projection graph that gives you an overview of your financial status. Before you really study it, you'll want to add more data to your NewRetirement financial portfolio.
The “My Plan” menu at the top allows you to add annuities, pensions, debts, upcoming one-time expenditures, etc. It will further refine your projection model using all of your data. When you're done entering your information, it will look something like the chart below.
NOTE: For this article, we've created a profile for a couple in their early 40s. Each has an income and some savings accounts. We've selected the system default age of 93 for life expectancy for each person and listed retirement age as 67.
That's as far as you'll get with the free plan. When you upgrade (more about that later), you'll have a lot more ways to look at your money. You'll also have a lot of different ways to plan out how you can save more. That's where the Insight tab comes into play.
When you're using the Insights, you're able to get a detailed picture of different areas of your financial future. You can break it down by income and expenses, savings, taxes, withdrawals, and surplus-gap.
To give you an idea of the detail in each of these charts, we're going to show you several. With each chart, you can focus on the whole of it, which is your projected lifetime. You can move your cursor over one particular year to see the numbers projected for just that part of your life.
The first is what a basic income and expenses chart will look like for our couple.
Next, here's what our couple's savings and contributions chart will look like. Again, you can see that we've selected one year towards the middle of the plan to highlight. It shows the breakdown of savings, contributions, and return for just that year.
Finally, here's the chart for the surplus-gap. In this example, there is no unfunded gap. That means all expenses through this couple's lifetime are covered by income, distributions, and savings.
The great thing about NewRetirement is that it's so easy to play with the numbers. You can watch how the charts shift as you adjust your finances virtually. What will happen if you save a couple of hundred dollars more each month? Enter it in and see. What if you want to retire at 55 instead of 67? Change the retirement age in your profile. Then watch the surplus-gap chart to see if it's possible on your current income.
Along the left side of your dashboard, you'll also see “Coach suggests.” This is where NewRetirement sets you up with articles and suggestions about how to do things differently so your money works harder for you.
Why NewRetirement Is A Great Planner For FI
All retirement planners are not created equal. Because our perspective is always the pursuit of Financial Independence, that's how we looked at all of the planners. Keeping that in mind, we have three reasons why we like NewRetirement the most.
First is the sheer volume of places to make adjustments to your finances. There are so many ways to play with your numbers to get them to work in your favor. Other sites allow you to play with income and investments too, but NewRetirement takes it to a whole new level. Just a few of the ways New Retirement lets you manipulate the numbers of your financial future include:
- Giving you places to enter your passive income, like owning additional properties.
- Offering you the choice between viewing an optimistic returns assumption and a pessimistic one.
- Allowing you to enter in different rates of return to play with the percentages.
- Letting you plan out a Roth conversion to see how that affects your retirement goals.
Secondly, you can add everything to the NewRetirement plan, including passive income and multiple mortgages for rental properties. Passive income streams are such a huge part of FI. Using a site that doesn't allow you to list multiple houses doesn't make sense.
Third, NewRetirement is an unbiased program. They are not aligned with any particular financial services group. That means they don't have a vested interest in selling you anything – music to a ChooseFIer's ears. NewRetirement's goal is just to give you the most complete picture of your retirement and then help you get there. Try out NewRetirement for Free
NewRetirement Vs. Competitors
As we've said, there are many online retirement planning tools from which you can choose. Three of the most popular apart from NewRetirement are Personal Capital, Mint, and OnTrajectory. Here's a little more about each one so you can compare them and determine which planning tool works best for you.
Personal Capital focuses very heavily on investing. They feature a 401(K) fee analyzer and an asset allocation tool to help you understand how to build your wealth. The flip side is that they focus very little on budgeting, something beginning FIers really need.
Personal Capital is free to use. If you want access to their advisors, however, you must have over $100,000 in assets and pay a fee of at least 0.89%. You must also link at least one account to the site before you are able to analyze any of your finances through their site.
Mint is actually owned by Intuit, which also owns Quicken and Turbo Tax. That means you can link those accounts (if you have them) with your Mint account. Like Personal Capital, Mint makes you link at least one of your accounts to their site before they let you into it.
Mint is heavily focused on budgeting and not as much on investing. If you want to know where your money has gone, this is a good site to use. It will help you track your spending so you know where you can cut back, a good first step to FI. However, if you want to know where your money should go to best prepare for retirement, there might be other planners that fit that need better.
It's free to use, but you can choose to get a subscription to Mint Credit Monitor for $16.99/month if you're concerned about your credit rating.
When you first look at NewRetirement and OnTrajectory, they seem to be very similar. Both focus their sites on how to plan for retirement. Both allow you to make all kinds of adjustments to your finances so you can get a thorough plan for retiring. Neither one requires you to link any accounts to the site. You only have to enter your information as you know it and the sites will start generating graphs.
OnTrajectory charges a fee of $60 if paid annually ($5/month) or $9/month if paid monthly ($108/year).
NewRetirement has three different pricing plans.
The free plan gives you a really basic snapshot, as we noted above. If you want to really get into the numbers and manipulate the models to see what financial moves are the smartest for you to make, you'll definitely want to upgrade.
The PlannerPlus plan is $72/year, so just $6/month. That's a fraction of the fee that a financial advisor would charge. For that price, as we mentioned, you get a much more expanded array of inputs to see how your money can do more for you. Make virtual changes to your tax planning, estate planning, conversions, and income and more to see what you can do to retire as early as possible. This plan also allows you to print your information or export it. Then you can very easily share it with your financial advisor or anyone else who needs to see it.
The PlannerPlus Live plan is $125/year, working out to $10.42/month. You get everything listed above, as well as a private phone conversation with a retirement expert. That person will look at your plan and make suggestions on things that you can do differently to maximize your return and retire in the exact financial position you want to be at the time you want to be there.
As an added bonus, you can try both the PlannerPlus and the PlannerPlus Live plans for 14 days with no risk.
Pros And Cons
As with any product, there are pros and cons. Here's our assessment.
- Flexibility – As we've mentioned before, your ability to play with so many numbers in your plan sets this tool apart. That allows you to plan for just about any financial scenario possible.
- Funded Gap vs. Unfunded Gap – Without a doubt, one of the most important graphs on the site is the Surplus-Gap. It's on the Insights menu. Knowing how big the gap is (if there is one) between the funded portions of your retirement vs. the unfounded portions of your retirement – and when the money would run out – is invaluable to your planning.
- Vast Amount of Articles and Information – NewRetirement doesn't just give you the numbers and leave you to figure out the future for yourself. As part of the coach suggestions, they give you articles to read at your leisure that apply to your specific scenarios.
- Great Place for Beginners to Start – If you're a longtime FIer, this tool will help you refine your plans. It will help to maximize your money and minimize the time you have to work before retiring. But if you're a beginner, this tool is a great place for you to start planning for your future. It gives you a wholistic and honest view of where you are vs. where you need to be. It will help you decide the best path to get there.
- Unbiased Approach – As we mentioned, NewRetirement isn't affiliated with any particular financial advisors. This is good news because you know they're not out to sell you things you don't need. If you want their financial advice, you know they're looking out for your best interest instead of a business.
- Coach Suggestions to Make Sure You're on Track – The “coach” is suggestions that NewRetirement makes. They're based on your particular sitation and will help you to not miss any retirement planning steps. It makes recommendations for you to do things that you haven't yet and ranks them in the order of importance.
- Can be overwhelming – We mentioned that NewRetirement is a great tool if you're beginning ChooseFI. It gives you such a good overview of where really are once all of your data is inputted. However, this tool could prove to be overwhelming initially. That's especially true if you're still learning the ins and out of the financial world and even some of the lingo. There is so much information at your fingertips. You need to really pace yourself to go through it so you don't get bogged down with everything that's there.
- Could be a better budgeting tool – When you're starting on the road to FI, you often start by looking at your budget. Where can you cut expenses to start saving money? Other retirement planning tools may include this as part of their method to help you meet your goals. NewRetirement does not. The PlannerPlus Budgeter(available when you upgrade to PlannerPlus) is helpful with large-picture spending. That's categories like insurance payments, dining out, personal care, and pets. However, it won't get into the nitty-gritty of where every penny goes. You may need that when you first start out on the road to FI.
Try out NewRetirement for Free
In summary, NewRetirement is the best retirement planning tool for people on the path to FI. You need information that's easy to read. You need to know that the people giving you that information don't have an agenda. And most of all, you need to know how to work with what you have to be able to retire early.
NewRetirement checks all of those boxes and a whole lot more. Try it out risk-free today and we know it will help you too.