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 How VeriPlan Helps You To Plan Your Lifecycle Finances
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(3109 reads)
VeriPlan automatically projects your family's annual lifecycle income in multiple categories, which might include:
1) normal earned employment income (wages, salary, bonuses, etc.)
2) working business owner income or self-employment income
3) pension and annuity income
4) Social Security income
5) other income, including income from alimony, rental real estate, royalties, trusts, and farm income
You can control the growth for any income source by setting growth rates that are below, above, or equal to the expected inflation rate.

VeriPlan automatically projects your future asset income and capital gains related to your cash, bond, stock, real estate, property, and other assets.

VeriPlan also enables you to make annual positive and negative adjustments to your projected pre-retirement and post-retirement income. You can adjust your projected income at any age to reflect planned events, such as, unpaid sabbaticals, recurring or non-recurring bonuses, working part-time, and other situations.
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(2376 reads)
Along with your efforts to increase your earned income, your personal savings rate largely determines your lifelong financial planning success or failure by steadily and more substantially feeding your investment portfolio. The attempt to be clever in the selection of particular investment securities is a far less reliable, less important, and most often negative factor in your long-run personal finance success.
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(2157 reads)
VeriPlan's fully integrated and automated financial calculators and financial software tools help you to plan for major expenditures, including private preparatory school and college education costs. A separate section of VeriPlan's Expense and Savings Tool provides a detailed example of using VeriPlan as a finance calculator that plans the future college savings, expenses, scholarships, and loans for two children who currently are very young.
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(2176 reads)
VeriPlan's fully integrated mortgage calculator and loan calculator functionality can automatically project interest and principal payments on up to 25 of your currently outstanding loans. VeriPlan's debt management planning facilities handle mortgages, lines of credit, bank loans, student loans, revolving credit arrangements, credit cards, or other types of loans. You can model higher monthly payments that accelerate the repayment of any particular loan or all loans.
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(2249 reads)
VeriPlan's Home Purchase Tool automates the lifecycle financial planning process associated with future residential home purchases. VeriPlan's financial calculators automatically take into account: the planned home purchase price, closing costs, settlement cash required, mortgage debt to be assumed, interim expected real estate price changes, and subsequent expected real estate price appreciation.

VeriPlan's personal finance software will automatically adjust interim real estate values, purchase costs, future real dollar growth rates, tax basis, etc. Using projected future investment portfolio values, VeriPlan will liquidate sufficient cash, bond, and stock investment assets to fund the projected home purchase and closing costs minus the planned mortgage debt principal.
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(2301 reads)
VeriPlan's comprehesive and integrated retirement calculators help you to plan your retirement much more easily. The VeriPlan lifetime financial software automates the financial planning process for your retirement income, pensions, annuities, Social Security payments, retirement expense budget, retirement taxes, and tax-advantaged retirement plans.

To a very great extent, VeriPlan has automated the development of your lifecycle projections by incorporating current tax laws and rules associated with tax-advantaged retirement investment incentive programs such as traditional IRA, Roth, 401k, 403b, SEP, Keogh, and other retirement plans. For example, VeriPlan has fully automated the projection of your IRA contributions, deductions, asset growth, withdrawals, and taxes, regarding traditional IRA accounts and Roth IRA accounts. Note that information about VeriPlan has been updated and consolidated here: Financial Planning Software
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(2069 reads)
Personal finance and investing can be baffling. You can try to learn what works and what does not work from the media or from the financial services industry, but this effort is largely futile. The media reports the financial news as an endless, unfiltered, and often contradictory financial information fire hose. To what should you pay attention? What can you ignore, and what should you ignore?

Financial planning education is a central objective of VeriPlan. VeriPlan’s design and functionality reflects a strong belief that individuals will follow scientifically-grounded, savings-conscious, risk-adjusted, cost-effective, and tax-efficient financial planning and investment strategies, if they can. VeriPlan contains extensive and integrated documentation that explains what VeriPlan does and why. To promote investment and financial planning education, VeriPlan is also highly integrated with The Skilled Investor website.
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(2193 reads)
VeriPlan's tax calculator software automatically projects your real dollar tax obligations using current tax rates and tax limits that would apply in your particular situation. For example, regarding your income taxes and income tax rates, VeriPlan uses current marginal federal income tax rates after taking into account your projected tax deductions, exemptions, and adjustments. Regarding state taxes and local income tax rates, VeriPlan assesses these taxes according to the marginal or flat tax rate method that applies in your tax jurisdiction. VeriPlan automatically assesses Social Security taxes, Medicare taxes, self-employment taxes, real estate and property taxes, short-term capital gains taxes, and long-term capital gains taxes. In addition, it automatically applies taxes across your lifetime to your traditional IRA and 401k accounts and to your Roth IRA and Roth 401k account contributions.
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(4020 reads)
With IRA, 401k, and other tax-advantaged retirement investment portfolio accounts, you trade off the relative value of paying federal income taxes, state income taxes, and local income taxes now versus paying them either later or never. The value of this tradeoff varies dramatically from person to person, and a proper analysis should be done within the context of your projected lifetime personal income tax situation. What you should do is highly dependent upon your income, investment portfolio assets, and the variable federal, state, and local income tax rates that you may face across your lifetime.

VeriPlan automates much of this evaluation for you. With VeriPlan, you can focus on personal financial planning analysis and decision-making, because VeriPlan's financial calculators and tax calculators hide all the the computational details. U.S. income tax laws concerning tax-advantaged retirement plans are extraordinarily convoluted. To the extent possible, VeriPlan has automated your lifetime projections regarding various employer retirement plans and personal retirement accounts that allow you to defer taxation or to avoid future taxation altogether.
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(1965 reads)
Insurance can provide cost-effective risk pooling benefits. However, buying appropriate and economical insurance is not simple. There is no free lunch when you purchase life insurance, home insurance, long term care insurance, and other insurance contracts. You trade your assets and/or you make premium payments in exchange for the assurances of insurance companies.

As a sophisticated financial lifecycle projector, VeriPlan can help you to calibrate your potential exposures to some insurable risks. For example, the projected income, expense budgeting, savings, and human capital data presented in VeriPlan may help you to gauge the amount of life insurance coverage you may wish to carry. Furthermore, you can input the cost of term life insurance or whole life insurance as an incremental expense into VeriPlan and estimate the long-term impacts of paying different levels of insurance premiums on your projected investment portfolio assets and investment returns.
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(2193 reads)
Without an adequate asset buffer, a financial setback like disability or extended job loss coupled with debt can put your family into an unrecoverable downward financial spiral. Financial crises are particularly insidious, because of the very high cost of consumption debt. While subsequent positive net income might allow you to recover at certain interest rate levels, even higher interest rates can prevent a recovery entirely.

VeriPlan's Future Debt Tool requires only that you to set the interest rate that you would pay, if your future income did not cover your expenses and you were to run out of financial assets. VeriPlan automatically manages for you all other aspects of projecting the impact of such debt.
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(4582 reads)
VeriPlan's lifetime personal financial planning software develops customized scenarios based on your current personal finance situation and your goals for the future. VeriPlan is a sophisticated and fully integrated future value calculator that automatically projects the year-by-year future value for your investment portfolio assets, net of additions and withdrawals based on your future earnings and expense budgeting. VeriPlan's investment growth calculator uses return on investment growth rates that are in line with the very long-term historical trend.
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(3476 reads)
When making personal finance and retirement planning decisions, individuals must confront the dilemma that, historically, more conservative portfolio investments have yielded substantially lower investment returns than riskier investments have delivered. With risk-adjusted market returns, you simply cannot have your financial cake and you eat it too. If you take on higher investment risk, you may be able to save and invest less, because the return on investment of the assets you hold is expected to be more rapid. However, the financial growth outcome is less certain.

Conversely, if you expose yourself to less investment portfolio risk, you must plan to save more and to invest more, but the outcome likely to be more certain. How to strike a personally appropriate balance between risk and return is part science and part art. There are no easy answers, because the future is fundamentally unknowable by anyone. You can test these tradeoffs by experimenting with various settings for your VeriPlan lifecycle projections.
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(2430 reads)
When you use VeriPlan as a Mid-Career Education Planning Tool, you can:
1) experiment with changes to your future earnings potential, including different future income growth rates
2) model any income lost or any other expense changes, during your return to school
3) grow annual educational expenses at rates that may equal or differ from expected inflation
4) offset expected education costs by anticipated employer tuition reimbursement, scholarships, and educational loans.
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(3761 reads)
Your current assets and anticipated asset growth rates are key components in decisions about how to structure your estate plan. Once you have an estate plan, then your estate attorney can educate you about any financial trigger points that could create a need to revise your estate plan in the future. VeriPlan can help you to anticipate your progress toward these financial triggers, such the amount of your assets relative to estate tax rules.
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(4609 reads)
Within the context of your particular financial circumstances, VeriPlan can give you a much better understanding of the interplay of investment risk and return projected across your lifecycle. VeriPlan provides five user selectable and adjustable asset allocation methods, each with automatic annual portfolio rebalancing. These five allocation methods provide unprecedented planning flexibility in analyzing and choosing a financial asset allocation strategy that matches your preferences about investment risk and return.
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(5773 reads)
VeriPlan provides extensive cost-efficiency projection facilities to help you understand the lifecycle impact of investment costs. Once you enter the investment cost characteristics of your current portfolio, VeriPlan will handle the rest automatically.

VeriPlan develops projections that assume you will continue to acquire assets throughout your lifecycle using the same level of cost-efficiency or cost-inefficiency that is apparent from your current portfolio. It also provides a Cost-Effectiveness Tool that allows you to override your current costs and instead to develop projections that automatically reflect lifecycle investment costs that you believe are reasonable to pay.

If your current portfolio costs exceed your reasonable cost assumptions, then VeriPlan will automatically measure the lifecycle value of the financial assets that you would lose in the future, if you were to maintain your current practices regarding investment acquisition and investment maintenance costs.
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(4727 reads)
To develop your financial lifecycle projections in VeriPlan, you can enter as many as 24 separate cash and cash equivalent asset holdings. For each of your current cash holdings, you can also enter your investment costs and your tax basis. In addition, you can indicate whether you hold a particular cash asset in a taxable, traditional 'tax-deferred,' or Roth 'never-taxed' account.

Internally, VeriPlan maintains separate information for each of your individual asset accounts throughout your lifecycle projections. This very detailed approach allows VeriPlan to project automatically your overall portfolio tax-efficiency and investment-efficiency for each year of your lifecycle projection. VeriPlan does this even though the net values of your individual asset holdings may change at different rates due to differences in investment returns, costs, and taxes. By avoiding the use of arbitrary averages across groups of investors, VeriPlan can provide you with much deeper insight into your projected financial circumstances.
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(2131 reads)
To develop your financial lifecycle projections in VeriPlan, you can enter as many as 24 separate bond and fixed income asset holdings. For each of your current bond and fixed income holdings, you can also enter your investment costs and your tax basis. IIn addition, you can indicate whether you hold a particular bond or fixed income asset in a taxable account, in a traditional IRA, 401k or other traditional retirement plan investment account or in a Roth IRA or Roth 401k account.

Internally, VeriPlan maintains separate information for each of your individual portfolio accounts throughout your lifecycle projections. This very detailed approach allows VeriPlan to project automatically your overall portfolio tax efficiency and investment efficiency for each year of your lifecycle projection. VeriPlan does this even though the net values of your individual asset holdings may change at different rates due to differences in investment returns growth, costs, and taxes. By avoiding the use of arbitrary averages across groups of investors, VeriPlan can provide you with much deeper insight into your projected personal financial planning circumstances.
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(2100 reads)
To develop your financial lifecycle projections in VeriPlan, you can enter as many as 99 separate stock and equity asset holdings. For each of your current stock and equity holdings, you can also enter your investment costs and your tax basis. In addition, you can indicate whether you hold a particular stock or equity asset in a taxable, traditional 'tax-deferred,' or Roth 'never-taxed' account.

Internally, VeriPlan maintains separate information for each of your individual asset accounts throughout your lifecycle projections. This very detailed approach allows VeriPlan to project automatically your overall portfolio tax-efficiency and investment-efficiency for each year of your lifecycle projection. VeriPlan does this even though the net values of your individual asset holdings may change at different rates due to differences in investment returns, costs, and taxes. By avoiding the use of arbitrary averages across groups of investors, VeriPlan can provide you with much deeper insight into your projected financial circumstances.
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(2796 reads)
How much you earn, spend, and save are by far the most dominant determinants of your long-term financial well-being. You need a means to evaluate your current sustainable lifecycle consumption rate. VeriPlan provides such a means. VeriPlan projects your wealth and your potential estate in each year through age 100. VeriPlan offers you unprecedented direct control to perform your own automated personal financial planning.
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(1741 reads)
If at any point in the future, your expenses would exceed your net income and would fully deplete your accumulated cash, bond, and equity financial assets, then VeriPlan automatically begins to accumulate an "unfunded consumption debt" loan for you.
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