NewRetirement Review: An Excellent Retirement Tool

If there’s one thing I love to do, it’s plan for retirement before retirement and during retirement. The more you can plan for retirement, the more retirement success you will likely have.

In the old days, I would write everything out on a spreadsheet and update each line item every month. Fortunately, more fintech companies are taking the guesswork out of retirement planning.

One such firm that’s making headway in the space is NewRetirement. This is my NewRetirement review for all of you looking for a great retirement planning tool. Both my wife and I sat down and reviewed the product together.

NewRetirement Overview

NewRetirement was founded in 2015 by Stephen Chen and is based in the San Francisco Bay Area. The company’s objective is to enable people to help themselves with a DIY retirement planning solution.

NewRetirement raised $2.2m in 2018 from 2 key investors, Guggenheim Partners and Intercept Ventures. NewRetirement originally reached out to me in 2017 and I passed. But after a good 5+ years of development and refinement, I’m excited to share my thoughts on NewRetirement with all of you.

Chen was inspired to launch NewRetirement when he and his brother Tim witnessed their mother struggling with her own retirement planning. They quickly realized that since their college educated, entrepreneurial mother (co-owned an advertising business) was struggling with her retirement transition, surely millions of others are too.

Wanting a better DIY solution than just using spreadsheets, NewRetirement was born. Independent and built from the ground up, the company is gaining traction.

Before founding NewRetirement, Chen co-founded a VC-backed company that raised $40M and filed to go public (got sold).

He also bootstrapped a profitable 7-figure consulting firm and a separate performance marketing firm. In addition, he worked as a consultant for Charles Schwab, Fidelity, Dimensional Fund Advisors, and others.

NewRetirement was voted best retirement tool by Forbes, and the American Association of Individual Investors. The company has a growing user base of 100,000+ DIYers.

The typical user demographic of NewRetirement’s retirement tool is between 50 – 65 years old, has an average of $1 million and a median of $600,000 in investable assets, and $400,000 in home equity. As NewRetirement focuses on helping everyone achieve financial independence, it will likely attract a younger audience over time.

What Does NewRetirement Do?

NewRetirement wants to bring financial planning to the mass market at a very low cost. Users like you can utilize their technology to gain confidence, achieve financial independence, and maximize your money. This in turn can help you save time and stress.

Some of the resources and services offered by NewRetirement include:

• Customizable Online Retirement Planner
• Advisory services with CFPs
• Live coaching sessions
• Calculators for retirement, social security, lifetime annuity, reverse mortgage
• Virtual Financial Advisor (coming soon)

How Much Does NewRetirement Cost?

NewRetirement has both free and paid services. Here is a breakdown of their various plans

NewRetirement Planner Pricing Plans

There are currently three different pricing plans for the online retirement planner ranging from free to only $125/year. Both of the paid plans come with a free trial. Here is a summary of the features for each version.

1×1 Advisory Services Plans

NewRetirement offers flexible financial services options. They offer personalized 1×1 financial coaching with no long-term commitment. An initial plan review session runs 45 minutes for just $99. Then, you can schedule follow-on 30-minute sessions for only $50 as needed if you want more help.

If you prefer to get direct help from a Certified Financial Planner (CFP), they offer an Advisor package starting at $500. It includes a 1 hour consultation Meeting, an expertly crafted retirement plan based on your individual needs, and a 1 hour review meeting to discuss the plan and answer questions.

If you want continued support, you can get additional advice from your Advisor anytime for $200/hour. This is an efficient way to get answers to new questions that arise in your journey. In addition, you can get help if changes arise in your lifestyle, career, financial needs, or goals.

Here’s a look at NewRetirement’s 1×1 financial services offerings. You can also request a free initial consultation through their website.

How Is NewRetirement Different From Personal Capital?

Regular readers know I’ve been a long-time user of Personal Capital’s retirement, net worth, 401(k) fee analyzer, asset allocation and other financial tracking tools.

I also consulted for Personal Capital and know Bill Harris, the founding CEO. And as a regular user of Personal Capital, I still highly recommend taking advantage of their free services.

With that said, how is NewRetirement different from Personal Capital and are they worth exploring? Frankly, retirement is such a huge milestone in everyone’s life. Thus, I think it’s always worth taking advantage of other tools out there, especially when they are free to play around with.

What you may find helpful about NewRetirement is they are highly focused on budgeting. Personal Capital is more focused on investing. Being able to accurately budget and invest well are both keys to a happy retirement. So you may find it helpful to use both.

The other main difference between Personal Capital and NewRetirement is the access to an advisor and the fee structure. Personal Capital requires a minimum of $100,000 in investment assets. In addition, PC charges an annual management fee (ex. 0.89% for the first $1M.)

NewRetirement’s advisor offering starts at $500 for a one-time complete review. And those who want further support can get additional help at $200/hour. Therefore, NewRetirement has a lower hurdle to get started and get help. And if you have a large amount of assets, NewRetirement can be cheaper on a percentage of assets basis.

Retirement Facts

Before we dive into the setup wizard, here are some interesting facts to note about retirement. Perhaps they will help inspire you to get planning.

• The average life expectancy in the US is currently 78.7 according to the CDC. When planning for retirement, you need to think about your personal health and family medical history. No-one can accurately predict how long they will live, but estimating your own life expectancy is important for planning.

• Only 38% of couples are having open dialogs about their investing and saving plans for retirement. Regular discussions about your financial health, goals, and retirement plans are vital. Get your partner involved today, don’t wait.

• 75% of folks who are financially secure actively manage a financial plan. It makes sense that those who are proactive with their finances tend to yield much better results.

• Only 44% of people between the ages of 44 to 59 feel their retirement savings are on track.

In other words, planning for retirement is very important. With interest rates plummeting during the pandemic, I’ve made the argument we should correspondingly lower our safe withdrawal rate in retirement, accumulate a larger net worth, or both.

As a result, more focus is needed when planning for retirement.

A Look Inside NewRetirement’s Retirement Planner

Curious what the NewRetirement Planner looks like? Here’s a glance at the signup process and a sample output.

In my demo, I used the following inputs for future retiree William, who lives in a coastal city with his spouse and two young children.

• William is 38 with longevity age goal of 88

• Spouse Helen is 36 with a longevity age goal of 92

• They have 2 young children in daycare/preschool

• Both plan to earn $150,000 in compensation until age 55 and then retire

• Their combined savings is $200,000 in retirement accounts plus $50k in cash and investments

• They own a home worth ~$1.2mil, paid 20% down, purchased 3 years ago

• Mortgage balance of $726,000 at 2.6%, $6,500 monthly payments

• $8,800 in monthly expenses (medical, childcare, food, utilities, transportation, insurance, clothes, entertainment, misc.)

NewRetirement Setup Wizard

The setup process is straight forward. You begin by entering your age, how long you hope to live and target retirement age.

Income And Savings

Then you input your compensation and savings. You can also add your spouse’s info by following the prompts to get a full picture of your family’s finances.

Next, the setup wizard will help you add projected Social Security benefits and mortgage information if you own you home.

You will want to have your home’s current value, mortgage balance, interest rate, and monthly payment amount on hand.

Check out the projected $20.2m total savings for William and Helen by the year 2076.

If you’ve been a disciplined saver and are still many years off from your retirement age, you may see your total savings chart want to shout, “Wow, I’ll be rich!” at this stage of the setup process. But, don’t get too excited yet.

Expenses

Now it’s time to input all of your monthly expenses and watch all those projected savings shrink. The positive is you may get very motivated to find ways to tighten your budget!

After you input your expenses, you get to see your retirement plan score and a detailed lifetime retirement projection chart.

Tip: Some of the colors in the chart are hard to differentiate from each other. If you hover over a category you can see it highlighted in the graph.

Results From NewRetirement’s Planner

Here’s a look at William and Helen’s retirement plan.

With a score of 135, William and Helen are in “Great” shape and are anticipated to meet >95% of their retirement needs. Even though the initial setup wizard stops here, you can go back and edit your inputs.

In addition, to get a further customized chart and score, click the “Complete My Plan” button. There are more sections you can complete such as passive income, one-time large expenses, withdrawn strategy, and basic estate planning.

Other features you can access are the Savings Timeline under the Insights menu and a Net Worth Forecast. Here’s a look at the Savings Timeline:

And here’s a snapshot of the Net Worth Forecast chart.

PlannerPlus Features

There are even more graphics and customizable inputs you can access with the paid version. Here are some of the best bonus features you get with the PlannerPlus version. You can try Plus free for 14 days and then for just $72/year.

• Advanced Real Estate modeling
• State specific Tax Projections
• Roth Conversion Modeling
• Roth IRA Explorer/optimizer
• Automated Coach Suggestions
• Relocation Modeling
• Medicare Estimations
• Ability to link accounts
• Access to create scenarios
• Advanced reports and charts
• More control over assumptions
• Printed Reports

Below is a snapshot of the Planner Plus Roth Conversion Explorer. This is a really neat tool because there’s been so much debate about whether converting to a Roth IRA is a good idea. The tool enables the user to make a more objective decision and model out the results way into the future.

Below is a snapshot of the PlannerPlus Real Estate Modeling tool. Given real estate is my favorite asset class to build wealth, I’m thrilled to see such a robust tool that can be used for a larger percentage of my net worth. In fact, for most Americans, real estate accounts for a majority of our net worths.

NewRetirement Positives

Here’s a quick summary of NewRetirement’s offering.

• Free – It’s free to use their basic retirement planner for as long as you want and the paid versions come with a free trial.

• Simple to setup – Built for DIY retirement planning newbies, the setup questionnaire process is simple and easy to understand.

• Customizable – It’s easy to make the planner as customized as you want, especially the paid versions. Flexibility is great when you want to plan for different scenarios.

• Visualize if your money could run out or overflow – Many people are visual learners. The graphs make it easy to see when you could run out of money and when you could have excess funds.

• Linking accounts isn’t required – Unlike Personal Capital, you don’t have to link any of your personal financial accounts to use the planner.

Areas Of Improvement

• No free advice – NewRetirement offers free tools to make your own decisions, but not free advice. To get investment and budgeting advice, you would need to hire a 1X1 financial consulting session.

• Can’t see the numerical score ranges – You can’t see the maximum possible score or what the numerical ranges are for great vs good, fair, and needs work. I guess they have their reasons for not revealing the breakdown, but I’d prefer to see the details.

NewRetirement Conclusion

When it comes to retirement planning, it’s better to be more prepared than not. NewRetirement is designed to help those who like a DIY approach, gain confidence and better plan for retirement. With NewRetirement, you can gain a much better grasp of you retirement future.

The company has several new initiatives in the works that should be rolling out in the near future. Be on the lookout for their Virtual Advisor, a simpler interface, more customizable inputs such as dependents and employer 401(k) matching, and more.

To sign up for NewRetirement’s award-winning retirement tool for free, click here. It is truly one of the best new tools I’ve seen come to market for DIY retirement planners.