Sometimes life goes as planned, and sometimes it throws us curveballs. Whether expected or unexpected, certain events have a large effect on our financial lives. So, this week, we’ve added a new feature to Personal Capital’s Web Dashboard to prepare you for anything that may lay ahead.
Our new planning features take the guesswork out of financial decisions by allowing you to create multiple income or spending scenarios. You can immediately see the impact of hypothetical income events like inheritance, the sale of a home, or going back to work after retirement. Similarly, you can input expenses like travel, a child’s wedding, home renovation, or making a charitable donation. Maybe you or a spouse want to take a year off or stop working entirely. What impact would this have on when you can retire, or how much you save? Our new scenario and comparison tools allow you to plan for multiple potential outcomes. Best of all, you can save different scenarios and compare the impact of various decisions versus your current financial plan.
This feature works together with our newly launched ‘Education Planning’ tool, which helps you understand and compare the costs of a specific college or overall in-state vs out-of-state college costs, as well as determine your annual savings needs while you track your progress. Forty percent of college students take a fifth year to graduate, and you can model what impact that would have on your annual spending. You can also see how hypothetical changes to education goals impact your overall portfolio and retirement readiness.
How it Works
Sign in to your Personal Capital account and select ‘Retirement Planner’ under the ‘Planning’ tab in the header menu.
In the Retirement Planner, select the ‘+’ next to Spending Goals, and select the ‘Education’ icon.
Create a ‘New Education Goal’. Select or add your student, their birth year and their education type – private school (pre-college) or higher education.
Add in any and all savings toward this goal by linking any current associated accounts or you can manually enter the amount. However, we encourage you to link any existing accounts so you can designate all or a portion of those given accounts toward an education goal. This allows you to monitor your progress and contributions and helps you keep on track for hitting your goals. Our Average costs calculator – which includes tuition, room and board, and books – will help you determine an appropriate amount to save.
Our planner accounts for inflation by deflating future returns on your college savings to today’s dollars for an easier comparison with today’s college costs, to help you most accurately compare.
Our planner helps you calculate how much you need to save per month or per year, from now to the time your student starts college. Personal Capital recommends saving for 70% of the total costs.
Select ‘Done’ and you now have your final education analysis. You can see your projections and edit contributions, select specific schools to see how your savings will net out, and see your “Fund-it-all” amount and your projected tax savings from a 529 plan.
You can now complete your final analysis. For example, you can save it as a new scenario such as, “Katie goes to Stanford” under ‘Retirement Planner’ and see how it affects your retirement readiness and your overall financial plan. This is how you can compare all different types of scenarios (home-buying, inheritance, etc) and see how it impacts your plan.
It’s that easy! Stay tuned for more exciting new product updates coming soon.
For a video demonstration, click here.
This communication and all data are for informational purposes only and do not constitute a recommendation to buy or sell securities. You should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. You should consult your legal or tax professional regarding your specific situation. Third party data is obtained from sources believed to be reliable. However, Personal Capital cannot guarantee that data’s currency, accuracy, timeliness, completeness or fitness for any particular purpose. Certain sections of this commentary may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Keep in mind investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
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