Trust Builders, Inc. released its Sequence of Returns calculator with integration in The Retirement Analysis Kit’s (TRAK’s) existing retirement needs analysis calculators.
The Sequence of Returns analysis evaluates a client’s retirement plan and assesses the likelihood of possible success or failure based on a historical stock index or a blend of indexes.
Retirement planners often assign hypothetical rates of return to illustrate market returns, but this method does not account for shorter periods of market volatility and sequence risk, Trust Builders contends. Retirement funds invested in the market may have both positive and negative rates of return at different time periods. Lower or negative returns early in retirement may have a more detrimental impact on future retirement cash flow.
The Sequence of Returns calculator uses rates of return from a historical index to illustrate the potential performance of retirement investments. It also illustrates the historical success or failure for different retirement ages, life expectancies and rates of inflation. The resulting reports use visually engaging graphics to engage clients while explaining a complex subject.
“The Sequence of Returns calculator is a great educational tool allowing advisers to educate clients on market volatility and create realistic retirement expectations based on historical data,” says Edward Dressel, president of Trust Builders, the Dallas, Oregon-based developer of TRAK. “At Trust Builders, we have been focused on retirement education for 30 years. While other fintech providers are changing their products to meet DOL fiduciary rule requirements, TRAK has had interactivity and education as its guiding principles since 1986. For advisers looking for fiduciary tech solutions, TRAK is ready today.”
The Sequence of Returns calculator augments TRAK’s suite of solutions that engage clients in the retirement planning process. TRAK presents advisers with a technological solution that satisfies the Department of Labor (DOL) fiduciary rule requirements for interactive investment materials. TRAK also allows advisers to incorporate multiple assets and income streams, thereby improving projections of clients’ retirement income.
TRAK features more than 20 calculators to educate clients about a wide variety of financial planning topics including a full retirement needs analysis, retirement plan contribution analysis, Social Security timing strategies, participant benchmark reports and many more.