“If an advisor uses software, they can be compliant and go into some of these more technical areas, but a white paper can’t be replicated in real life,” Meyer says. “Technology is lowering the barriers to providing more comprehensive advice, mitigating the compliance risk and migrating advice to issues like Social Security and taxes.”
At the heart of the software is a tool that allows advisors to compare and analyze different strategies for asset allocation, asset location, rebalancing and withdrawal sequencing during a client’s "decummulation" phase.
Income Solver gives advisors the ability to strategize withdrawals to dedicated tax brackets by either withdrawing tax-deferred assets up to dedicated levels or by using Roth conversions.
“What we ideally want to do is withdraw to the proper thresholds, up to the limits of an individual’s tax bracket," Meyer says.
The software also uses strategies to maximize and maintain Social Security and Medicare benefits. Strategies can be compared graphically, such as through bar or line charts.
“We allow an advisor to create a strategy, analyze it and compare it to other drawdown strategies,” Meyer says. “There are thousands of options. It’s very complicated, but advisors can drill down and see how the strategies are different.”
Income Solver includes a visual interface that allows advisors to demonstrate the amount of “gamma,” or advisor alpha, that their advice provides to clients. The interface breaks down a client’s retirement income sources—for example, current assets, Social Security, defined benefits and any gains that result from professional advice.
“Gamma is the notion that you can get superior performance and value just by working with an advisor,” Meyer says. “Income Solver helps advisors illustrate some of the gamma they provide. An advisor can now show a client that by working with them and implementing certain strategies, their nestegg will last six years longer or will calculate to be worth $1 million more. It’s a nice discussion piece.”
Advisors can also create scenarios based on client behaviors, market projections, tax policy changes and increases or decreases in benefits like Social Security. These assumptions can be changed across different time periods.
Income Solver includes a publishing engine that produces personalized reports for clients that can be branded to an advisor’s practice, and Meyer’s Social Security tool, SSAnalyzer, to help optimize claiming strategies.