Our tool was originally built by one of our co-founders, Jeff Jones, CFP®, for use in his financial planning practice. In addition to holding his CFP® designation, Jeff also has a Master’s degree in Financial Engineering from Princeton University. The myFinancialAnswers team has modified the tool to make it web-enabled, but it has the exact same functionality and calculations as Jeff’s original tool, which he has improved upon over the last several years and continues to use in his client-facing practice.
- LifeQuotes: We think LifeQuotes is one of the best online term life insurance quote services around. Their simple, intuitive website will let you quickly select the best – in most cases, that’s also the cheapest – life insurance policy that fits your needs. They have a very wide variety of term life insurance providers, which helps ensure that you get the best possible deal when implementing our recommendations.
- DisabilityQuotes: As far as disability and long-term care insurance, DisabilityQuotes has been in the business longer than any other online provider, and they have great representatives who will help lead you through the process of selecting and applying for these policies. Unfortunately, disability and long-term care insurance are somewhat complicated products, which means that it’s rarely a simple case of applying online, getting the screenings, and getting the insurance. However, DisabilityQuotes has a broad selection of providers and a better online experience than anyone else we’ve seen.
- Betterment: Betterment is what we call a “robo-investor” – they automatically invest your money in low-cost ETFs and rebalance your portfolio for you based on your age and life stage. They also have a tax-advantaged loss harvesting service for taxable brokerage accounts. Betterment is a low-cost, “set it and forget it” type of service, and an ideal complement to our tool. myFinancialAnswers will tell you how much you need to be setting aside for retirement and in what types of accounts, and you can then either do it yourself, let Betterment do it for you, or engage an independent investment advisor to assist. We’ve recommended Betterment to clients in the past and think they are a great option for the investment side of things.
When you see links in the tool for our partners, you will see affiliate links – those allow us to track whether or not people who use myFinancialAnswers actually follow through on our recommendations, so that we know if our tool is making an impact. We won’t provide recommendations for specific insurance providers, which helps us maintain impartiality in the advice that the system provides.
Either way, once you have purchased the insurance that the system recommends – whether through our affiliates or not – we suggest that you enter in your new insurance amounts (and costs) into your myFinancialAnswers plan, so that we can run an updated analysis of your financial situation.
The first is gathering all of your personal financial information. How long this will take is up to you – if you already have most of the information at hand, then it won’t take long at all. See our “What information do I need in order to use the tool?” FAQ to see what types of things you’ll need to gather.
The second step is inputting your data into our tool and calculating the results. It should take about 30 to 60 minutes to go through the online interview and input your information. The more detail you provide, the longer it will take, but those details will also help us to make more meaningful recommendations. It will also take longer if you choose to manually enter all of your investments, which is why we recommend using our automatic linking option, which is powered by the Intuit technology behind mint.com.
The calculation engine itself usually only takes about 30 seconds, but it could take up to a couple of minutes if our site is experiencing a lot of demand. From there, you can spend as much time as you like poring through our results and analysis. If you’d like, you can also perform a “scenario analysis”, to see how your projections would change if certain inputs could be changed.
Unfortunately, our tool is based on U.S. tax law and U.S. estate law. If you are not subject to those laws, then this tool is not for you. However, if you are subjected to those laws, then this tool is a great way for you to understand what you need to do in order to meet your financial goals.
When you’re done with our interview and you’ve gone through the recommendations that our tool has made, just click on “Ask a Question” in the tool, and we’ll connect you with a trusted financial planner. That planner will have access to your file, so you won’t have to go through the process of entering in your information again.
Robo-Advisor: An online, comprehensive financial planning tool that allows you, the user, to enter in all of your pertinent financial information and receive a comprehensive financial plan without the need of a human financial advisor. This doesn’t mean that you won’t later seek out a human to round out the plan or answer specific questions, but many of you will probably find that you do not need a human once you’re done.
Robo-Investor: An online platform that automatically invests in tax-efficient, low-cost index funds for you, rebalancing your portfolio on a regular basis to ensure that you stay within appropriate asset allocation. We recommend that users who do not want to manage their own investment look at Wealthfront.
Put simply, a robo-advisor will tell you how much to invest and in what types of accounts (along with how much insurance you need, how much you need to set aside for college, and if you can retire at your desired retirement age with the standard of living that you’re looking for). A robo-investor can then manage those investments for you at a low cost.
While most calculators will take into account just a few pieces of basic information, we put together a comprehensive cash flow timeline for the entirety of your expected life, including all of your assets, expected returns, your family situation, and how you’d like to spend your money. We try to capture every piece that might affect your future decisions, in order to provide the best possible advice.
Furthermore, we’re creating a comprehensive set of recommendations. We’re not simply trying to answer one question in isolation. Instead, we’re doing the same thing with this online software that we as planners do with our clients – considering various trade-offs, identifying vulnerabilities, and telling you everything that you need to know in order to meet your goals.
If you want to learn more about the potential benefits of a well-designed plan, feel free to read our article here. While we can’t guarantee any specific results, we think the empirical evidence is hard to dispute. It only takes a few minutes to get started, so sign up and take control of your financial future!