is an online interactive investment guidance and advice tool. Participants access Plan Goals through the ASPire Participant Gateway, where they can see their retirement goal forecast, receive suggestions about how to improve the forecast, and take immediate action with increased deferrals and/or changes to their asset allocation. Plan Goals even allows participants to include retirement assets they
have outside their employer’s plan to get the most out of the highly complex computations presented in a simple and engaging interface.
Plan Goals was developed by Klein Decisions, Inc., known for bringing simplicity and clarity to the investment decision process. Coupled with the expertise of their Financial Professional, Plan Goals gives plan
participants the RETIREMENT EDGE.
Plan Goals complies with the Department of Labor’s requirements for approved investment advice to participants.
BENEFITS OF PLAN GOALS
- Incentive to take action
- Confidence in the planning process
- Success benchmarks for growth to their goal
- Two strategies to close funding gaps
- Personalized “Easy Enrollment” process
- Ability to customize their reports on the web
Advisors and Brokers
- Enhanced fiduciary monitoring of participant behavior
- Quantification of participant success
- Increased value of their employee benefit plan
FOR PLAN GOALS USERS
- A competitive edge in the marketplace
- Increase assets under management
- Quantify participant success
- Keep competitors in check
- Gain access to a sophisticated participant communications system and retain their portfolio management role
- User Guide
- Plan Goals Demonstration Videos (Click on links below to view videos)
1. What is Plan Goals, and why is it available in my retirement plan?
Plan Goals is an online interactive tool which is integrated with your plan's recordkeeping platform in order to provide investment guidance and advice. Your employer has adopted this important benefit in the hopes that it will help you save and invest more successfully for your retirement.
2. If Plan Goals makes a recommendation for my account, do I have to implement it?
No. You can always choose other investments or elect a different deferral percentage, as long as your plan allows it.
3. I’m over 50. Does Plan Goals account for catch-up contributions?
Yes. Once you're 50 and your contributions exceed the IRS limit for elective deferrals, Plan Goals will automatically assume you are making catch-up contributions.
4. How does Plan Goals determine the inflation value?
Plan Goals considers inflation rates going back to 1926, though more weight is given to inflation rates since 1960.
5. Does Plan Goals change along with changing IRS contribution limits?
Yes. Each fall the IRS typically announces any changes to contribution limits. Plan Goals models the limits to increase by the inflation rate each year, taking the IRS changes into account.
6. How are life expectancy values determined?
Plan Goals takes its life expectancy values from the Period Life Table for the Social Security area population, using the gender-specific life expectancy if gender is provided, and an average of male and female life expectancies if the gender is not known. Then Plan Goals simulates a longer-than-average life expectancy for each participant by adding an additional five years to the Social Security life expectancy. And of course, participants may also edit the life expectancy value online.
7. What is "probability of success"? How is it calculated?
The probability of success refers to the likelihood of generating a particular level of retirement income from the time you retire through your assumed life expectancy. This is based on the investment strategy you follow and your savings rate. This probability is calculated using a simulation technique that estimates how much money will be available during a participant's lifetime. If the simulation has the participant running out of money too early, it is said to have failed. To be considered successful, at least 75% of the simulations have to result in the participant having assets left over at the end of the life expectancy.
8. How does Plan Goals know whether I'd be satisfied with higher retirement income than, say, retiring sooner?
Plan Goals lets you decide your own priorities. In the Objectives section, you are invited to input the desired values for retirement age, retirement income, savings rate and investment risk. Plan Goals even allows you to input the relative importance of these 4 goals, with certain goals given more weight. The closer the strategy comes to meeting all your weighted ideals, the more satisfied you should be.
9. I just noticed that the strategy Plan Goals is suggesting for me has a lower probability of success than what I'm doing currently. Could that be right?
It may not look right, but it is. Plan Goals' objective is not simply to find the solution with the highest probability of success. If that's all you wanted, you'd just work as long as possible, save every penny, and do with the least amount possible in retirement. But Plan Goals looks for the combination of variables that has an acceptable probability of success AND keeps you within your comfort zone (which you define when you set your ideal levels). So your current strategy might require more sacrifices than you really need to make, and the suggested strategy, even with a lower probability, is going to give you an acceptable probability of success.
10. When Plan Goals searches for that acceptable probability mentioned in the question above, what's going on there?
Plan Goals will almost always look for the solution with less investment risk and therefore less probability of loss. This is particularly crucial in your early retirement days because losses during this timeframe can have long-term consequences. Remember that you're saving to get income to last you through your retirement years, so Plan Goals seeks out a solution, based on your inputs, that is less risky and has less volatility. An example of this would be the replacement of income at the level you want. You might have an 85% probability of success with your current strategy, but a strategy with an 80% probability of success would be less volatile.
11. I am just a few years into my career. My salary will undoubtedly go up as I progress in my future jobs. Does Plan Goals take this scenario into account?
Yes. Plan Goals lets you model wage increases to take into account better job positions as your career advances. Look at the Wage Rate Increase figure on the Assumptions page. It's likely set to equal inflation, a conservative assumption for a younger person. If you think you'll receive raises at a rate more than inflation over the years or if you think your job position will improve, just change the Wage Rate Increase to a number above inflation. Studies have shown that older people tend to have wage increases more in line with or slightly above inflation while younger people have both increases and career job advancements working in their favor. So since you're just getting started, you might think a 6% number could be reasonable depending on what you expect your career to do.
12. I don´t understand--I set savings rate as my lowest priority and income replacement as my top priority. I thought Plan Goals would tell me how much to increase my savings rate so I could maximize my income. Instead, my Plan Goals Suggested Strategy is saying I should continue saving at my current rate, but that means I'd replace less than my ideal amount of retirement income. What happened?
You're right--that does seem illogical. But Plan Goals is looking for the solution, considering all of your ideal levels, that will get you there with an acceptable probability of success. In your case, Plan Goals thinks that your current savings rate is your ideal and, since you can achieve an acceptable level of income replacement without saving more, it tells you to maintain the "ideal" current rate. But you're still in control. Just go to the What-If screen where you can raise both income replacement and savings rate and see the different probabilities of success.
13. My spouse wants to know if there's some way Plan Goals can produce a strategy for both of us combined?
You can add your spouse's current retirement plan balance, other assets you have set aside for retirement, or both in the "Other Retirement Assets" field in the Online Experience. When you put a value in this field, its growth will be simulated as if it was invested in the same way as your current plan. Because your contributions will be tested against individual limits, this isn't a complete joint strategy because you SHOULDN'T include your spouse's current retirement contributions by adding them to yours. But your spouse could use the investment strategy suggested by Plan Goals in their retirement plan or other accounts. That could provide a more accurate combined picture.
14. How does Plan Goals set the ranges for each participant response?
Plan Goals starts with some assumptions. For Savings Rate, it's your current savings rate as the low part of the range and 2x this rate (OR this rate + 5%) as the high part of the range. For retirement age, 62 is considered ideal but 67 is acceptable. For Income Replacement 85% is considered ideal and down to 70% is acceptable. As for Portfolio Risk, participants are always assumed to prefer less risk to more. Ultimately, participants have the ability to set the ranges for each of these four factors. These then are the ranges used for the On Track Report. NOTE: These assumptions can be adjusted by the Plan's financial advisor.
15. How does Plan Goals determine expected risk and return of the investment portfolios (asset allocation models)?
The risk and return of the component asset classes and their relative weights within the portfolio drive the expected risk and return of the asset allocation models. Either KD Advisors or a 3rd party advisor provide the risk and return assumptions.
16. What about outside retirement assets? How does Plan Goals know how they're allocated?
Plan Goals assumes the asset allocation for your spouse's retirement savings or any other retirement savings outside your plan is the same as your current plan investments. This assumption is used in projecting your Current Strategy's outcomes.
17. Does Plan Goals analyze target date funds?
Yes, and in a very sophisticated way. Unlike basic calculators that simply look at the Target Date Fund's current allocation, Plan Goals simulates the returns based on the Target Date Fund's specific Glidepath, that is, the formula that defines the asset allocation mix of a target date fund, based on the number of years to the target date. Typically the asset allocation becomes more conservative the closer a fund gets to the target date. Please note that the primary purpose of this analysis is to help you figure out how much to save each pay period.
18. On the Adopt Strategy screen, I see suggested Asset Class and then suggested Investments. What's the difference?
Asset Classes are broad categories that describe your investment portfolio's asset allocation. Examples are Large Cap Value, Intermediate Term Bond, and International Growth. You plan probably has a number of funds in each class, and those may be the suggested Investments. The thing is--You can't really invest in an asset class. You have to use the mutual funds listed as being in those classes.
19. Plan Goals dictates that the range between the Ideal and Acceptable retirement ages can't be more than 10 years. Why?
If you pick a realistic Ideal Retirement Age, ten years later will be more than enough for an Acceptable Retirement Age. You can control the range that will be searched for your Suggested Strategy by setting both the Ideal and Acceptable ages online.
20. Will Plan Goals allow me to set the ideal retirement age prior to age 62?
Yes. In the absence of input from you, Plan Goals start you off with age 62, but you can set the ideal age lower as long as you're not already that age! Please do note that the acceptable age cannot be more than ten years after the ideal.
21. You show a lot of my personal data on the Assumptions Screen in the Online Experience and in the On Track Report. Where does Plan Goals get that information?
Most of this information comes from account information held at ASPire. ASPire also provides this information to you in your periodic reports.
22. Can you describe the difference between a Pension Benefit and Other Retirement Assets?
Defined Benefit plans provide Pension Benefits, typically a payment you will receive for the rest of your life. Other Retirement Assets could be lump sum balances in 401(k)s, IRAs, Rollovers, or even other assets you've set aside for retirement which you are holding outside your company's retirement plan. You can also include your spouse's retirement savings in the Other Retirement Assets field for a more complete view of your combined situation
23. It looks like my pay (or my Account Balance) is wrong on the screen. How can I fix it?
Just click on the "Edit Information" button on the right side of the screen and then make your corrections as necessary. In regard to changing your Account Balance, just be aware that, if you change it, your current strategy will not be evaluated because Plan Goals won't have your correct asset mix.
24. I plan to visit the Online Experience often. Will the information I enter on this screen remain or will I have to re-enter it each time?
In general, the data you enter will remain. You should know , though, that Plan Goals receives periodic updates from your plan's providers which may update your information to make it more current. So it's a good idea to always print your Plan Goals report each time you leave the Online Experience, and then check the Assumptions screen each time you enter the Online Experience in case you want to make adjustments.
25. There are percentages at the bottom of the Objectives Summary Screen. What do they mean?
Those percentages represent how important each of your objectives is to you, based on your responses to the relative importance and trade-off questions. Remember that there are two parts to each of your four objectives: (1) Goals (the actual target or range you wish to achieve) and (2) their Priorities (how important meeting that goal is to you). Each of these objectives is part of the strategy decision, so their values must total to 100%. The higher their value, the more important they are to you.
26. What if I say, "Zero" on the Risk screen? I can't think of a size of loss I'd find "acceptable" in a bad year.
Plan Goals assumes that virtually all investments carry some degree of risk, even if it's only some kind of loss with a low probability. So if you choose "Zero," Plan Goals will probably not be able to produce a Suggested Strategy. Try a few different levels of risk along with adjusting other variables, like saving more or working longer. But entering "Zero" will probably not allow Plan Goals to suggest a strategy for you.
27. I've noticed that a value for expected loss pops up when I move the slider on the Risk screen to either the extreme left or extreme right. What's happening?
These are illustrating the expected losses of the most conservative and most aggressive asset classes offered through your plan.
28. I'm looking for the make-up of a specific investment portfolio recommended by the Suggested Strategy. Where can I find that?
The details can be found in two places: (1) The Take Action Screen and (2) your printable Online Report.
29. If I click on the "Go to What-If" button, what happens?
The What-If button will take you to a screen where you can play with the individual choices for your goals and/or select a different investment portfolio. This is more like a traditional online calculator which allow you adjust various factors to receive different answers. The What-If tool does not consider your priorities. So if you're not pleased with your Suggested Strategy, you can probably achieve a more satisfactory and complete solution by clicking on the Objectives tab at the top of the screen and taking another look at your responses to your goals and priorities.
30. I've gone through 3 or 4 different Suggested Strategies. Are they stored somewhere so I can go back to them?
If you want to keep track of the various Suggested Strategies you get, you'll need to print them out or record them in some way. In Plan Goals you'll see only the most current Suggested Strategy.
31. Once I print out my Online Report, close my browser and return to the recordkeeping system, how do I see if the changes I submitted have been made?
Once you return to the recordkeeping system, click on the Investments icon at the top of the screen, and then on Elections in the bar to the left. Here you can see that you are invested in the investment portfolio you selected.
32. On the Investments page, I see that I have a number of choices: Update Elections, Transfers, Realignment and Rebalancing. But the only one that makes sense to me, given that I've implemented a Plan Goals strategy, is the one about rebalancing. Could you explain that choice?
Rebalancing is a powerful feature of the recordkeeping system, especially for those who have implemented a Plan Goals strategy. This is because the implementation of a Plan Goals strategy will apply only to your future contributions, while rebalancing is necessary to bring your existing balances in line with your adopted Plan Goals strategy. In order to ensure your current balances are invested based on your Plan Goals decision and your current deferrals, you will want to go to “Investments” = > “Rebalancing” and click “New” and continue until you see your rebalance transaction in an “Approved” status.