Retirement Spending Planner (RSP)
As employers move from defined-benefit to defined-contribution plans, and employees increasingly rely on IRA’s and 401k’s instead of traditional pensions, it has never been more important for individuals and their financial advisors to carefully and realistically plan for retirement. Such a plan must incorporate appropriate asset allocation, realistic savings and spending projections, as well as the tax situation of the individual. Most importantly, the plan must account for the uncertainty of future returns on investments.
Wagner introduced RSP in 1998 as a ground breaking financial planning tool that uses the technique of Monte Carlo simulation to model the uncertainty of investment returns. Instead of naively assuming that investments grow at the same pre-set rates year after year, RSP acts out thousands of separate understandings of the possible outcomes, and calculates the probability of clients achieving their goals. Incorporating standard methodologies from mathematical finance, as well as a faithful tax model and the flexibility to handle the most diverse of situations, RSP remains a leader in using Monte Carlo methodologies in personal finance.
RSP 3: The Premier Retirement Planner
RSP is the ultimate in retirement planning software using the Monte Carlo method to evaluate the probability that a savings/investment/spending plan will achieve a client’s financial objective.
RSP is Excel based so all input schedules can be fine-tuned using your spreadsheet skills. The program accepts inputs for income, savings, spending, and has provision for a customizable eleven-asset class description of the investment market place. Up to ten standard portfolios can be defined to represent a spectrum of conservative to aggressive portfolios. The program output includes an estimate of the probability distribution of wealth at a target year, the probability that various financial objectives are achieved, and sensitivity tests for a variety of alternative portfolios and spending plans.
RSP 3 comes loaded with two different eleven-asset class breakdowns, with returns, volatilities and correlations provided by our CFA consultant. These data sets are intended to get you started using the software, so that you can see what is required to describe the various asset classes you will recommend to your clients.
RSP 3 Pricing
The price for a one-user license is $1,100 which includes one year of maintenance. Additional users at your office are charged $550 per user, for up to 10 licenses. Contact us to discuss discounts beyond that. Annual maintenance is $336 per user.
Maintenance includes downloading of fixes and enhancements from our private website, telephone help, and updates of tax tables and other changes in the tax code. The program is self-sufficient as far as updating tax tables yourself, but maintenance must be continuous to qualify for all other fixes and enhancements.
For your (and our) convenience we charge for the maintenance on a sliding scale
depending on the month in which you purchase, and you are then paid in advance for somewhere between 12 and 14 months. If you buy in the first month of a quarter the price is $1,100 and that includes 12 months maintenance, buy in the second month of the quarter and the price is $1,156 and that includes 14 months maintenance, buy in the third month of the quarter and the price is $1,128 and that includes 13 months maintenance.