Let's jump to the end of the story. You craft a brilliant plan for your clients. Now, you must explain it,
and convince them to take action. Unfortunately, explaining to clients the complex numbers generated by planning
software can often be challenging (to put it mildly). For the first time, the Smart presentation in MoneyGuidePro makes it easy.
The SMART presentation can be used 3 ways:
1. As a live, interactive presentation in your office
2. As an interactive presentation online
3. As the "executive summary" section of a printed report
MGP automatically converts your recommended plan into a five-step interactive, Powerpoint-type presentation.
All you have to do is click through the pages and tell the story.
1 Preferences: Review what your clients want -- to be sure they will be happy with your recommendations.
2 The Bottom Line: Compare Current and Recommended Results. Clearly show changes that are required.
Concentrated Positions
What is the potential risk for clients who have concentrated positions in specific stocks or bonds?
Because the portfolio standard deviations in MGP assume well-diversified holdings, clients with a
significant position in a particular stock or bond (as a percentage of their total portfolio) should
be aware of the potential for increased volatility and unsystematic risk.
MGP has a Concentrated Position analysis to help you assess this risk for your clients' Plans.
We included the Concentrated Positions analysis as a new page in "The Bottom Line" section of the
Presentation. (Note that this feature is only available in the Presentation, which uses the SmartCalc
calculation method.)
The Concentrated Position analysis automatically shows the impact of a loss in value of 50% to 100%
(these are our defaults, which you can change). For stocks, the analysis not only reduces the value
of the clients' current holdings, it also re-calculates the value of Stock Options and Restricted Stocks,
if applicable, by reducing the market price of the underlying stock.
We've also included an explain link that shows one example of the risks inherent in a concentrated
position-the performance of Enron stock in a 16-month period. It's a very sobering example of what can
happen to a company and its stock.
There are three new settings in User Options (accessed from the MGP Main Menu) for the Concentrated Position assumptions:
1) What minimum percentage of the total portfolio defines a concentrated position?
2) What is the percentage loss for the first result?
3) What is the percentage loss for the second result?
3 Loss Cushion: Can you attain you Acceptable Goals; Calculate your loss cushion.
Bear Market Test
Since 2008 is almost everyone's benchmark for a "really bad year," MGP has incorporated the returns for
this recent recession into a new feature -- the Bear Market Test. You'll find it on the Loss Cushion page
in the Presentation. The Loss Cushion shows how much clients could lose from their portfolio today, and
still be in their Confidence Zone, with their goal values set to Acceptable. The Bear Market Test puts
the Loss Cushion in context, by comparing it to the loss suffered by a similar portfolio during the
recession of November 2007 through February 2009. The Bear Market Test helps answer the question:
"What if such a loss happens again?" (Note that this feature is only available in the Presentation, which
uses the SmartCalc calculation method.)
4 Inside the Numbers: For the first time ever, clearly explain return uncertainty and Monte Carlo results.
5 Action Items: Present a clear set of Action Items to implement your recommendations.
Play Zone
Play Zone is an easy, fun way to change Plan assumptions for goals, savings, and portfolios, and instantly
see the effect on the Probability of Success. While Play Zone is as simple to use as a calculator, it employs
the same sophisticated, in-depth calculations as the What If Worksheet. Now, clients can play with the assumptions
in their Plan using simple "sliders," and immediately see the new results, without affecting your recommended scenario.
While Play Zone was designed with the client in mind, advisors can use it as a quick, easy way to model changes in
a Plan, without the complexity of the What If Worksheet.
After you've reviewed your recommended scenario with your clients, use the Guest Sharing feature to provide them
access to Play Zone (usually, along with the Presentation). Clients love being able to play with their Plan on
their own. And, you can see everything they change.
Star Track
Star Track provides a visual summary of the clients' progress toward achieving their Financial Goals over time.
While financial plans have a long-term focus, the Plan results at any point in time are only a snapshot, based
on current goals and assumptions. It's easy for clients to lose perspective on how their goals, assumptions,
AND results have changed (and will change) over time. And, it's often difficult for clients to know how to
interpret their Plan results in a longer-term context. Star Track provides both the perspective and the context.
You determine which Plan to "adopt" and when to "record" a new scenario (we suggest with each formal review
of the clients' Plan, and at least annually), which creates a new Star Track bar. Each bar shows the clients'
results compared to their Ideal and Acceptable results, with all results displayed relative to their Confidence
Zone. Like the old saying, the Star Track graph is worth a thousand words.
You can provide clients with access to their Star Track History via the Guest Sharing feature of MGP.
Roth Conversion - Calculator
The Roth Conversion Calculator estimates the effects of converting qualified assets to a Roth IRA, using the assumptions
you enter. You might use the Calculator to make a preliminary assessment of the effects of a conversion, including
modeling different assumptions. The Calculator includes the key factors relevant to a possible conversion-including
disposition of the converted asset, tax rates, tax years, and sources of taxes. Because the Calculator is a stand-alone
feature, you must enter all the assumptions. After using the Calculator, if a conversion may be beneficial, you can then
model the assumptions within a MGP Financial Goal Plan, using the Roth Conversion Goal Strategy.
Roth Conversion - Goal Strategy
In preparation for the changes in Roth conversion rules effective in January 2010, MGP has included a Roth Conversion Goal
Strategy on the What If Worksheet. We've implemented the key features that will help you and clients determine the effects
of converting qualified assets to a Roth IRA. By comparing two What If scenarios-one with the conversion and one without
it-you can easily see the overall effect on the clients' Plan. Moreover, because the results of a Roth conversion are
dependent on many factors-including future tax rates and disposition of the Roth assets-you can use the Tax Options and
Spending Order sections of the Worksheet to model different assumptions.
More Details
As a best practice, when using the Roth Conversion Goal Strategy, adjust the Spending Order on the What If Worksheet to see
the difference in results when using Roth assets before other qualified assets, and vice versa.
If you elect to spread a Roth Conversion over multiple years, MGP divides the amount to be converted into equal
current dollar increments.
For Roth Conversions in 2010, MGP allows you to defer paying taxes until 2011 and 2012, and to split the conversion income equally
between the two years.
For employed clients, MGP uses the marginal tax rate you enter in the Goal Strategy to calculate the taxes due with the
conversion. For retired clients, MGP calculates the conversion taxes using the tax method selected on the Tax and Inflation
Options page. (The MGP default during retirement is using the progressive tax tables.)
When taxes for the conversion are paid from the investment portfolio, MGP first uses Taxable Fund All Goals assets, then
uses money from the converted Roth IRA. If the owner of the asset is less than 59 1/2, MGP assesses penalties on the taxes
paid from the Roth IRA asset.
Goal Wizard
Every Client's story starts with their Goals. Nothing is more important to the creation
of a successful plan than the full and complete identification of clients' unique financial
Goals. For something so important, you might want to see the Wizard.
Everyone should have a Wizard working for them, and MGP's Goal Wizard is one of the best.
MGP has 2 methods for entering Goals:
1.
Standard is for speed. Simply click the "Add" button for each Goal and enter the data requested.
View Sample Goal list
2.
Goal Wizard helps you create a Retirement Lifestyle plan. It acts as a tutorial, to provide quality and comprehension,
not speed. The Goal Wizard steps you through a "conversation" about client Goals in a way that helps identify and define
them better. It can be used in two ways:
1.
By the Advisor (or sales assistant) as a training aid. You'll learn the recommended way to create a
Retirement Lifestyle Plan in MGP, so you can deliver the greatest value to your clients.
2.
By the client online. A thorough conversation about Goals can be time consuming. You can choose to "off-load" this to your clients by
allowing them to enter Goals at home. Then, when they meet with you, it's a simple process to review and refine their Goal picture.
But don't look at this as passing a burden to your client. The Goal Wizard is FUN. Many clients prefer it, because they can create their
Goals on their own time, at their own pace, without any pressure, while they sip their coffee or glass of wine.
Research shows that people get great pleasure from dreaming about and planning their future. Providing online access to Goal Wizard is
a great way to add value for existing clients and to demonstrate value to new prospects
What If Worksheet
The What If Worksheet in MGP is the most POWERFUL on the planet. Plus, it's amazingly
fast and easy to use. If anyone disagrees, we'd welcome a What If showdown.
Here's a list of some of its most important features. In addition, it includes the incredible
SuperSolve™ button, which is covered in the next section.
3. Multiple simultaneous return calculation methods within
each Scenario (e.g. Average, Bad Timing & Monte Carlo)
4. Multiple Stress Tests for each Scenario
(up to 3 per Scenario)
Bad Timing
Back Test
Return Sensitivity
Rolling Period
5. For straight-line calculations, results show
Percentage of Goal Funded
Safety Margin in current and future dollars
6. Unique Monte Carlo Meter with Confidence Zone
Confidence Zone varies by age of client
User can modify defaults
User can change Confidence Zone for each client
7. Ability to configure What If just the way you like it
8. View Detailed Reports by Scenario
Combined Details
Details by Goal
Cash Flow Chart
Cash Flow Graphs
Cash Used to Fund Goals
Income & Earnings
Annual Returns
Yearly Detail
9. Four Calculation Methods
SmartCalc
Monte Carlo only
Custom
Custom with Monte Carlo
10. Three Results Views
Goals
Needs-Wants-Wishes
Total
The Next Top 23 List - For each Scenario you can:
11. Copy one Scenario to another
12. Select Stress Tests
Bad Timing
Back Test
Class Sensitivity
Rolling Periods
13. Change Stress Test assumptions
14. Select Goal Funding Order & use of Assets
Importance Order vs. Time Order
15. Spending Order - change assumptions
16. Change Earmarked asset and income to Fund all Goals
17. Enter name or description for each Scenario
18. Select Portfolio
Before retirement
After retirement
19. Enter your own return assumptions
20. Change Retirement ages (client and spouse)
21. Change all Goal amounts
Including up to 4 retirement periods
22. Reset Goal values to Ideal or Acceptable
23. Change Planning Ages (life expectancy)
24. Change Retirement income sources
Change & compare Social Security start years
Increase Social Security > 100% for Enter Your Own
Run sensitivity test to see effect of reduced Social Security benefits
Compare Pension options
Add part-time work during retirement
25. Add Goal Strategies
Immediate Annuity
72t
NUA
Roth Conversion
GMWB
26. Change additions to existing (current) assets
(e.g. increase 401K contributions to 8%)
27. Add new assets (e.g. add IRA for $4000)
28. Add Extra Savings by Tax Category Bucket
(e.g. save an extra $5000 in Tax Deferred)
29. Select Stock Option strategies and bring
cash into the plan to fund Goals
30. Bring cash from Restricted Stock into
the plan to fund Goals
31. Change other Assets and bring cash into the
plan to fund Goals (e.g. sell house in future)
32. Run sensitivity test for increase or decrease in Tax rates
33. Change multiple Tax and Inflation options for this client
Inflation for
Base rate
Social Security
Income Tax Brackets
Taxes
Marginal rate before retirement
Untaxed gain on Asset earnings
LTCG rates
Tax rate during retirement
Deduction amounts
Tax on Social Security
Tax Penalties
Tax Relief Act
This is the "Easy Button" for financial advisors. It has three major benefits:
1) It will save you time and effort by eliminating the frustrating task of
trial-and-error plan creation.
2) It will give you confidence that your recommended plan will be satisfactory
to your client.
3) It allows less experienced advisors to create better, professional-quality plans.
It's really Smart. Here's what it does:
1) It starts with a Solve Target, which can be:
Probability of Success percentage (for Monte Carlo)
Safety Margin Value (for Average Return)
2) It integrates all the client's preferences into its calculations
Retirement Ages
Ideal and Acceptable Ages
Willingness to delay
Order of retirement
Goals
Ideal and Acceptable Amounts
Importance (1-10 Ranking Scale)
Willingness to reduce amount below Ideal based upon Importance Group
Extra Savings
Maximum Extra Savings that client could save, if necessary
Willingness to save more
3) It runs as many Trials (iterations of the plan calculations) as necessary to find a solution that meets the Solve Target
In each Trial, it varies all Preferences (unless you lock any in Advanced Features)
It changes each value based upon its Importance and Willingness
It never moves a value outside its acceptable range (unless you override it in Advanced Features)
Plus, there are Advanced Features for advisors who want to modify the solve assumptionsMore
1) Change Willingness for one or all Preferences
Needs
Wants
Wishes
Retirement Age - Client
Retirement Age - Spouse
Extra Savings
2) Lock Goal Amounts that you don't want changed
3) Change the Solve Range
4) Lock Extra Savings Amounts that you don't want changed
5) Change maximum Extra Savings Amount
6) Move/Add Maximum Extra Savings Amount by Tax Categories
Guest Sharing
MGP takes advantage of the unique capabilities of the internet to expand and enhance
how you can work with your clients. The Guest Sharing feature makes it easy to work with
clients online, anywhere, anytime.
Guest Sharing FAQ's
What does Sharing mean?
After you create a Plan in MGP, Sharing allows you to provide access for that Plan to other people (called Guests) online
through the internet.
Who can I share with?
You can share one Plan with as many people as you want. In addition to sharing with your client, you may also
share with another professional, such as the client's accountant or attorney. You could even share with a client's adult child or other relatives.
What can I share?
You have complete control over what you share. You can select:
Which Plan to share
Which sections within the Plan to share
Whether or not the guest can make changes to the Plan
Can I turn off sharing?
Yes. You can turn sharing on and off for any Guest at any time.
Can I control what the Guest can do in the Plan?
Yes. You can determine whether they can enter data into the Plan (update mode) or just view the Plan (view mode). You
also control their access to reports.
Do I know when a Guest looks at a Plan?
Yes. You can choose to receive (or not) an email each time a Guest accesses her Plan. Also, every time a Guest
accesses any Plan, it is recorded into a permanent Guest Sharing Log.
Can I use sharing with prospects?
Absolutely. You can add a prospect into MGP, and then share only the Goal Wizard or Profile, so the prospect can
enter his own information.
"The Sky is Falling" Client Marketing
Have any of your clients felt like this poor guy lately? In difficult economic times, clients may believe
that "the sky is falling." It's easy to understand why.
The past two years have been a wild ride for all of us in the financial services industry. While most clients
faced dramatic volatility and many suffered significant losses (at least on paper), it has been difficult
(for you and your clients) to know how these losses might affect their ability to retire when they want, to have
the money they need in retirement, or to fund other financial goals. A MoneyGuidePro Retirement Lifestyle Plan
helps to provide answers to these questions.
Because so many clients were scared by their portfolio losses, and because, on some days, it seemed like the sky
was falling, we developed resource materials (a PowerPoint presentation, a client brochure, and Retirement Lifestyle
Workbooks) to explain the importance and usefulness of creating an MGP Retirement Lifestyle Plan. Because a financial
plan is the only way to determine the long-term effects of any clients' current portfolio losses, it's more important
than ever to offer MGP Retirement Lifestyle Plans to your clients. The target market for these materials is clients
age 50 and older-from clients who are beginning to think seriously about their retirement to clients who have been
retired for years.
After presenting "The Sky Is Falling" to hundreds of advisors in 2009 (and receiving very enthusiastic feedback),
we're offering the presentation and client brochures to all our subscribers. You can preview them
here.
We've also revised our Workbooks, the client-friendly way to collect the information you need to create an initial
Retirement Lifestyle Plan. There are two versions, one for clients who are employed and one for those who are retired.
You can view the workbook for employed clients here
and the workbook for retired clients here.
These resources are available under the Client Marketing Tools link on the MGP Main Menu.
Pre-printed "The Sky Is Falling" Client Brochure and Retirement Lifestyle Workbooks
We're also offering professionally printed versions of the "The Sky Is Falling" Client Brochure and the Retirement
Lifestyle Workbooks, which you can purchase via the Order / Pricing page, accessed from the MGP Main Menu.
Goal Cards
We did several pilot tests last year where advisors used an actual deck of "Goal Cards" in client meetings, as a way
of helping clients define the financial goals for their Plan. Advisors reported two key benefits. First, the cards
helped many clients focus more clearly on their goals. Second, when a client and spouse had differing opinions on the
scope and importance of their goals, arranging and re-arranging the cards facilitated the discussion and helped the
clients reach an agreement.
If you'd like to experiment with using the Goal Cards in your client meetings, we're offering them for a modest fee.
The cards are substantial, colorful, and tactile, and are packaged in a well-designed, hand-made box. You can
purchase only the cards or the cards and storage box on the Order / Pricing page, accessed from the MGP Main Menu.
Asset Allocation
MoneyGuidePro includes a robust set of Asset Allocation capabilities in two places; within a
Financial Goal Plan and as a separate module. (See the Power Features tab for a
discussion of Creating Portfolios, Alternative Portfolios and Optimization)
Automatically maps assets to your classes, using Morningstar data
Access Morningstar data for product look-up
Morningstar data includes stocks, mutual funds and variable annuities
2) Current Allocation
Create a current allocation report for current holdings
Calculate return and standard deviation
3) Risk Tolerance Assessment
Use MGP's Risk Tolerance questionnaire
Use Your own Risk Scores
Purchase FinaMetricaPro, an optional add-on product, and use a scientifically-validated risk tolerance system
4) Target Portfolio
Risk Tolerance Assessment calculates risk score
Map score to your portfolios - you control mapping
Target Portfolio selected automatically for use in What If 1 (you can override)
5) Portfolio Comparison
Compare current and target portfolios
Show changes required to re-allocate
6) Portfolios in What If (in Financial Goal Plan)
Easily change portfolio in each What If Scenario (up to 4 Scenarios side-by-side)
Change portfolios before and during retirement
Override portfolios by entering your own return
7) Monte Carlo (in Asset Allocation Module)
Run Monte Carlo analysis on target portfolio
Show range of potential future values
Compare current and target portfolio
8) Use MGP Standard Classes and Portfolios
Created and maintained by Harold Evensky
Includes projected return assumptions
Ready to go "out of the box" - no work for you
No extra charge - included in license fee
9) Concentrated Position
Current allocation
Set at 10% default
Aggregate - Integrate
Aggregate Client Assets
MoneyGuidePro offers CashEdgePro as an optional add-on product (at extra charge) to provide full Account Aggregation
capabilities.
Allows your clients to create links to all their online accounts
Seamlessly integrated within MGP
Automatically transfers current account values into your MGP Plan
Integrate with your other Core Applications
MGP is a leader in integration. We believe you should have the freedom to choose the "best-of-breed" program for each of
your core applications, and be confident that they'll work well together. We are committed to making your life easier
by integrating with as many other applications as possible.
Click here to view our Integration Partners
Life - LTC - Disability - Estate
MGP provides fully-integrated modules for Insurance and Estate Analysis. Each is designed to be used at two levels:
1) One Click - After completing a Financial Goal Plan, clicking one more link will provide an excellent,
first-level analysis for Life, LTC, Disability or Estate without additional data entry.
2) Advanced - For each module, you can choose to refine the analysis by providing additional information.
Life Insurance Needs AnalysisMoreView Sample
Automatically calculates Life Insurance needs for client and spouse
> includes any existing insurance
> includes Social Security Survivor Benefits
Allows User to add information and adjust assumptions
> change existing insurance amount
> enter/change expenses at death
> change living expense goal for survivor - amount and number of years
> adjust other Goals to be funded
> include or exclude stock options
> enter other income for survivor
> change tax rate and return assumptions
Automatically illustrates potential impact of a Long-term Care expense on the Investment Portfolio value
> illustrates Client and Spouse
> assumes three-year nursing home stay at average cost for the clients state of residence
> includes benefits from existing LTC policies
> includes LTC data for Nursing Homes, Assisted Living and Home Care
User can add and modify information and assumptions
> type of care
> cost
> length of care
> expense adjustments
User can recommend and illustrate purchase of LTC policy with these features:
> benefit period
> elimination period
> daily benefit amount
> inflation options
Cost of LTC policy can be automatically included in the plan as an additional Goal
Automatically calculates Estate values and compares the results with
and without a Bypass Trust(for either client or spouse dying first)
> Total Estate Value
> Federal Estate Tax
> Estate Expenses
> Amount for Insurance
> Total amount to heirs
> Cash shortfall at 1st and 2nd deaths
> Bypass Trust funding shortfall
Provides Estate Flow Charts
Allows user to create Estate Strategies
> ILIT
> Gifting
> Re-title Life Insurance policies
What If compares Estate Scenarios with different strategies
> create up to three What If Scenarios
> compare any two side-by-side
> illustrate impact on Estate and on results of Financial Goal Plan
Details
You want Plan Details - MGP's Got Them
MGP provides a wide range of detailed reports that are easily accessed online or printed as part of a report.
Detailed reports and graphs include:
Combined Details -
Year-by-year funding and cash flow for all goals
View SampleAdditional Detail -
More detail on any one year
View SampleBy Goal -
Year-by-year funding and cash flow for one goal
View SampleRetirement Distribution Cash Flow Chart -
Cash flow by year during retirement
View SampleCash Used to Fund Goals -
Graph of Goals funded by year
View SampleIncome & Earnings -
Graph of income & earnings by year
View SampleAnnual Returns -
Portfolio returns by year
View Sample
Budget
Use the MGP Budget Module for clients who need help freeing up money for additional savings.
Just like Frank Sinatra, most advisors like to "do it my way". The User Options feature in
MGP lets you configure the system to suit you and your practice.
Key Configuration Settings You Control
1) Include/exclude major sections in Financial Goal Plan
Budget
Stock Options
Restricted Stock
Life Insurance Needs Analysis
Long-term Care Needs Analysis
Disability Needs Analysis
Estate Planning
2) Select/Set Goal Planning Options
Goal Entry Method (Standard or Wizard)
Return Method (historical or projected)
Confidence Zone defaults (by client age)
What If Worksheet Options
Number of What If Scenarios
Portfolio default for each Scenario
Calculation Method for each Scenario
Results View for each Scenario
Stress Tests Enabled for each Scenario
Presentation Options
3) Asset Allocation Options
Include Monte Carlo
Input your own risk scoring template
4) Reports
Create custom report templates
Personalize the Report Cover page
Select whether or not guest can create reports
5) Defaults and Assumptions
Ability to change any of the key defaults and assumptions throughout the system
6) Create your own asset classes and portfolios - see the Power Features tab
Add and maintain your own classes (unlimited number)
For Historical Returns, select appropriate indexes - standard deviations and correlations automatically generated
For Projected Returns, enter your own returns, standard deviations, and correlations
Add and maintain your own portfolios (unlimited number)
Alternative Portfolios
For any client, you can create one or more Alternative Portfolios within a Plan by changing the Class Allocations. These
Alternative Portfolios are then available for any of the What If Scenarios.
Optimization
MGP allows you to re-optimize your portfolios for a specific client within a Plan.
More
Change constraints
Re-optimize
Select portfolio from the Efficient Frontier
The new portfolio is then available for any What If Scenario
SuperSolve Advanced Features
1) Change Willingness for one or all Preferences
Needs
Wants
Wishes
Retirement Age - Client
Retirement Age - Spouse
Extra Savings
2) Lock Goal Amounts that you don't want changed
3) Change the Solve Range
4) Lock Extra Savings Amounts that you don't want changed
5) Change Maximum Extra Savings Amount
6) Move/Add Maximum Extra Savings Amount by Tax Categories
Longevity Calculator
See how smoking, overall health, and family history affect longevity
Compare probability for living to different ages
Tax and Inflation Overrides - Users can modify MGP assumptionsMore
Inflation rates
Base rate
Social Security COLA
Income Tax Brackets
Taxes
Marginal rate before retirement
Untaxed gain on taxable earnings
LTCG rates
Tax rate during retirement
Deduction amounts
Tax on Social Security
Tax Penalties
Tax Relief Act
Allows input of multiple Stock Option Plans, each with multiple grants
Provides Price Sensitivity Analysis for each Plan, showing potential worth of vested options based on a range of stock prices
Illustrates possible worth of options based on various Exercise Strategies (Now - Vested Only, Now and as Vested,
Now and At Expiration, Start Year and Vested, Start Year and at Expiration, At Expiration)
Provides for side-by-side comparison of three Exercise Strategies
Separate a client's non-vested restricted stock from the other asset in the portfolio
Specify a separate rate of return for this stock
Select whether or not to include value in the Current and What if Scenarios
See the impact of different return assumptions on Plan results
Goal Strategies - Compare What if Scenarios with and without these strategiesMore Immediate Annuity
Compares investment asset to immediate annuity
Define annuity options (e.g., joint or single life, income guaranty, distribution growth rate,
estimated income amount) to match specific annuity contract or to model "generic annuity"
NUA Sell
Used for Employer Stock
Executes NUA and immediately sells the assets in the account selected
Allows the asset to be relocated to the portfolio allocation
NUA Hold
Used for Employer Stock
Holds remaining stock in a segregated account
Executes NUA and pays the taxes due from the NUA account
Segregated account grows tax-deferred
Create a distribution plan for the NUA stock, beginning now or in the future
72(t) Distributions
Ability to add existing 72(t) as an investment asset
Create 72(t) for both client and spouse now or in a future year
Investment asset used to fund the 72(t) account are segregated and grow at portfolio rate of return
Roth Conversion
Compares the effects of converting qualified assets to a Roth IRA
Use the Tax Options and Spending Order sections on the What If Worksheet to model different assumptions
For Roth Conversions in 2010, allows you to defer paying taxes until 2011 and 2012, and to split
the conversion income equally between the two years
GMWB
Models a generic variable annuity with a guaranteed minimum withdrawal benefit (VA with GMWB)
Reduces portfolio value by the purchase amount of the VA with GMWB, and adds the guaranteed
withdrawal amount to the portfolio in the specified years
Spending OrderView Sample
You asked and we listened. MGP has always had a defined order for spending assets. We spend assets by tax
category-taxable, tax-free, tax-deferred, Roth, then qualified. MGP now provides you with the flexibility to
define a different tax category spending order-first, as a new default for all your clients, and then, on the
What If Worksheet, as an adjustment for any scenario for a specific client. On the What If Worksheet, you can
compare Plan results for different spending orders. This feature is particularly useful when evaluating a possible
Roth Conversion, to see the effect of spending the Roth assets last.
Concentrated PositionsWhat is the potential risk for clients who have concentrated positions in specific stocks or bonds? Because the portfolio standard deviations in MGP assume well-diversified holdings, clients with a significant position in a particular stock or bond (as a percentage of their total portfolio) should be aware of the potential for increased volatility and unsystematic risk. MGP has a Concentrated Position analysis to help you assess this risk for your clients' Plans. We included the Concentrated Positions analysis as a new page in "The Bottom Line" section of the Presentation. (Note that this feature is only available in the Presentation, which uses the SmartCalc calculation method.)
The Concentrated Position analysis automatically shows the impact of a loss in value of 50% to 100%
(these are our defaults, which you can change). For stocks, the analysis not only reduces the value
of the clients' current holdings, it also re-calculates the value of Stock Options and Restricted Stocks,
if applicable, by reducing the market price of the underlying stock.
We've also included an explain link that shows one example of the risks inherent in a concentrated
position-the performance of Enron stock in a 16-month period. It's a very sobering example of what can
happen to a company and its stock.
There are three new settings in User Options (accessed from the MGP Main Menu) for the Concentrated Position assumptions:
It's really Smart. Here's what it does:1) It starts with a Solve Target, which can be:
Guest Sharing FAQ'sWhat does Sharing mean?
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