. . . the real distinction for financial advisors is not MaxiFi’s cost-effective price point, but its potential to frame the entire financial planning conversation differently – around the long-term impact of a client’s decisions on their long-term sustainable standard of living, instead of “just” their assets.
Nerd's Eye View
Most investors understand the importance of saving with a Roth IRA account or an employer sponsored 401K account for retirement. However, most people are much less prepared to answer questions like when they should start drawing social security or how to figure out which type of retirement account to withdrawal from first, when to do start, and at what rate to withdrawal. MaxiFi Planner answers those questions, as well as many other questions you haven’t even thought of yet. The software is easy to use and provides amazingly detailed financial recommendations which are supported by advanced Monte Carlo analysis. MaxiFi Planner is an outstanding resource for regular investors as well as for professional investors with a large financial planning practice.
Chartered Financial Analyst, Financial Analyst Insider
I’ve used ESPlanner since its earliest days and recently tried MaxiFi. The user experience is dramatically improved. Despite the fact that I probably spend as much time planning my own retirement as anyone, MaxiFi recommended that I slightly tweak my Social Security claiming strategy and make a change to withdrawal order that resulted in an increase in lifetime consumption. I believe there may even be a better withdrawal strategy and MaxiFi will help me test that theory. I’m a fan!
The Retirement Cafe blog
MaxiFi is the next generation. MaxiFi’s dynamic programming provides the most accurate forecasts and projections of any financial planning product I’ve seen and is essential to our ability to deliver accurate financial advice. The Monte Carlo approach is uniquely theoretically sound, providing guidance about the impact of different investment outcomes on spending decisions. The web-based user interface is clean and intuitive. The program is stable and there is excellent technical support. Since our founding in 2002, using this product and its predecessor for financial planning, we’ve delivered hundreds of financial plans and our clients find our financial advice persuasive and compelling
PhD, CFP®, Founder and CEO, Sensible Financial Planning and Management, LLC, Waltham, MA
MaxiFi Planner is a simple and elegant solution for financial advisors seeking to advise clients or for unadvised investors looking to optimize their own plan.
While most financial advisors learn about financial planning through the CFP Board’s curriculum and topic list, traditional economics has its own body of knowledge around financial planning and household personal finance topics, generally known as “life-cycle finance“. The foundational concept with the life-cycle economics approach is “consumption smoothing” – the idea that households will generally prefer to maintain a steady standard of living throughout their lifetimes… which then leads them to save the “excess” during their working years in order to fund the deficits (i.e., retirement spending after there’s no more work income) in the later years. The significance of this shift is that lifecycle finance focuses far more on the amount of life-time spending that can be sustained at any particular point, as opposed to focusing on more “conventional” measures like account balances/growth or Monte Carlo probabilities of failure. In addition, consumption smoothing is also much more complex in practice than “just” traditional approaches like saving a percentage of income in your working years to fund retirement, recognizing that income and the ability to save itself may be volatile over time (e.g., as kids are added to the household and constrain available dollars to save, and then eventually leave as parents transition to an empty nest stage with more disposable cash flow to save), and necessitating its own software tools (e.g., Larry Kotlikoff’s ESPlanner software or his more recent MaxiFiPlanner solution). Other notable distinctions to the lifecycle finance approach in practice with clients includes: risk capacity is measured not just by the ability to withstand a market decline, but how much “excess” the client can afford to invest above-and-beyond what it would take to simply buy a secure guaranteed income stream (e.g., via an inflation-adjusted annuity or a laddered TIPS bond portfolio); retirement projections similarly tend to be built from a base of what it takes to secure income, and then adds a “risk premium” for investing over and above that amount (if clients want to take that risk); insurance needs (both life and disability insurance) take on added importance by calculating exactly what is needed not just to “replace” income, per se, but ensure that it can still be effectively smoothed over life; and annuities tend to be more about the trade-off between secure retirement income and bequest motives, as opposed to just a psychological alternative for risk-averse clients who don’t want to invest in markets.
Financial Advisor and Writer, former VP of John Hancock Financial Services
As a financial planner, I’ve tried all of the traditional financial planning programs. MaxiFi beats them all because it focuses on what matters most – annual sustainable spending throughout your lifetime. I used ESPlanner for many years, and now MaxiFi is my new “go to” financial planning program. MaxiFi has a great user interface, some really cool living standard maximization features, and a Monte Carlo analysis that is much more useful than traditional Monte Carlo. MaxiFi allows me to answer all of my client’s financial questions with confidence. Use MaxiFi only if you want to take control of your life and start making smarter financial decisions.
Spillane Financial Planning, Inc. North Reading, MA
I love your customer support. I bought your two consumer software products over the last few days. They are very helpful. I had some specific questions on items that I needed to understand and adjust in the programs. I sent the questions to support Sat and Sun (today). I got both (very on point) answers today (Sun). Very impressive!
Investment Banker, Arcady Bay Partners LLC, Aldie, VA
My business is focused on helping my clients discover a sustainable, inflation-adjusted retirement income. After using a variety of planning programs I became so frustrated with their complexity, cost and unsatisfactory results that I created my own utilizing a funding ratio calculation similar to that used by pension plans as well as a Monte Carlo simulation. It wasn't fancy but it worked.
Then I discovered MaxiFi. Not only is it easy to use, it provides sound solutions to the challenge advisors face when stretching a finite amount of retirement resources (money) over a retirement that can last up to 30 years.
Professor Kotlikoff has really raised the standards of retirement planning with his innovative way of determining an income level based on each year's potential returns. It's a real game changer for those of us who have relied on the usual Monte Carlo simulations. MaxiFi helps the advisor educate clients and show graphically how incomes can change based on the rate of return over a long period of time and at the same time discover a sustainable, inflation-adjusted income a retiree can rely upon. Kudos to Professor Kotlikoff for his pioneering work in the field of retirement planning.
RICP® Greenville, SC
Larry I’m in the process of forming a financial planning practice. I’m a long-time (old) CPA and CFA and last year spent a great deal of time evaluating financial planning applications, including eMoney, RightCapital and Naviplan. Probably eMoney most closely met my needs but I still found it lacking. Against my better judgment, I finally threw in the towel and decided to create a spreadsheet to do the job. As you can imagine, the spreadsheet idea turned out to be a bad choice too. Then finally early this year I read about MaxiFi. I tried it out and haven’t looked back. I think it’s absolutely great. You’ve put together an incredible planning tool and I’m glad you’re getting the word out. Finally, your customer support is fantastic.
CPA and CFA, Columbia, SC
MaxiFi Planner is a powerful tool that projects a consistent discretionary spending budget, even with inconsistent income. This really helps my clients see how to transition to retirement, and with confidence. It’s very robust and accounts for Social Security, taxes, retirement account withdrawals, real estate, and much more. The staff is very knowledgeable and always responsive. Outstanding product.
Financial Planner, Juniper Investments & Financial Planning, A Member of Advisory Services Network, LLC. User since 2013
MaxiFi Planner has been such a valuable tool for my work with clients. To be able to share with clients a different view of consistent discretionary spending budgets has been so great. It is a such a different view than traditional Monte Carlo analysis, and is much more intuitive and easy for clients to grasp. MaxiFi really helps my clients see how to transition to retirement and see the effect of different planning scenarios and how they might impact their lifetime spending and taxes paid. Being able to share these outcomes, side-by-side, is so helpful for clients as they evaluate different decisions. Not only is it easy to understand, It’s very robust and accounts for Social Security, taxes, retirement account withdrawals, real estate, and much more. Additionally, their support has been amazing and responsive, which I very much appreciate. Well done!
CFP, Principal and Founder, Clarity Capital Management, Portland, OR
MaxiFi is obviously very thorough and considers many variables simultaneously. Given how complex things have become (taxes, investments, etc.), having a tool like this is indispensable.
CPA, temporarily residing in Japan
MaxiFi helps answer the question that everyone asks - "Will I have enough money to live on?" It defines "live on" as discretionary spending and that is where the advisor can help the client by making sure that the non-discretionary amount is more inclusive than simple housing costs. Most of my clientele do not want glitz and glamor but want something that they can understand. This fits the bill and is a great arrow in our quiver of tools.
Armstrong Financial Strategies, Cheshire, CT
MaxiFi offers a user-friendly, robust algorithm, which I recommend to anyone doing retirement planning. Dan Royer is a rock star whose Expert Review was exceedingly accretive to all of my scenario analyses.
CEO and Managing Partner, Mercury Capital Advisors, New York, NY
I finally got around to running my first plan on MaxiFi. You guys have done an outstanding job! The browser interface is easy-to-use and flexible, greatly simplifying data entry. The explanatory notes throughout are very useful as are the maximization functions with flexible assumptions. I’ve spent many hours over the years satisfying myself as to the accuracy of calculations in ESPlanner. I’ve grown to have complete confidence in ESPlanner, which translates into complete confidence in MaxiFi since they share the same computation engine. Congratulations on a fine product.
National Wealth Management, LLC, Florham Park, NJ