5 Tools to Super-Charge Retirement Planning

Try these free and paid tools that help manage your retirement finances.

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Retirement planning and saving can be intimidating. From selecting an asset allocation to rebalancing and fund selection, saving for our golden years is not for the faint of heart. Fortunately, there are some free and paid tools that make our job a lot easier, and dare I say, even fun.

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Robert Berger
These five tools address various pain points when it comes to retirement planning. Just be careful, because the visual charts and graphs can become addictive.

1. Personal Capital. The free tool from Personal Capital is the easiest and most thorough way to track an investment portfolio. The online tool enables users to connect investment accounts, including 401(k), IRA and taxable accounts from a multitude of brokers and mutual fund companies. Once connected, Personal Capital slices and dices the portfolio to show users their asset allocation, investment performance and even investment fees.

The tool provides visually stunning graphs and charts to help understand a portfolio. With Personal Capital’s 401(k) fee analyzer, users can see what percentage of their returns are being lost to fees. And its investment checkup allows users to evaluate their asset allocation and see alternative investments with lower fees.

2. Jemstep. There are two nettlesome aspects of retirement investing: asset allocation and rebalancing. As retirement accounts multiply from a single 401(k) to multiple IRAs and taxable accounts, keeping the right asset mix can be a real challenge. Jemstep is a paid tool that aims to solve this problem.

Once a user’s investment accounts are added to the tool, Jemstep evaluates the asset allocation of the portfolio. It then compares an investor’s asset allocation with Jemstep’s recommendation. The recommendation is based on the investor’s age and risk tolerance.

It’s the next step that sets Jemstep apart from other tools. Jemstep provides detailed buy and sell instructions to enable an investor to implement its proposed allocation. These instructions consider the tax ramifications of selling an investment, and it also considers asset location in its buy recommendations. If an investor doesn’t like a recommended investment, Jemstep provides alternatives that can be easily selected.

3. Betterment. Betterment is an online tool that makes investing fun and easy. Once a Betterment account is opened and funded, the only decision to make is the percentage to be invested in stocks and bonds. Once that decision is made, Betterment handles the rest. It invests the funds in a select number of low-cost Vanguard and iShare ETFs. Betterment offers IRA accounts for those saving for retirement.

In addition to its ease of use, Betterment also offers a visual tool to help users select their asset allocation. Using a point-and-click slider, users can see the projected effect of asset allocations ranging from 100 percent bonds to 100 percent stocks. With the click of a mouse, the asset allocation can be selected and the invested funds are automatically moved to the right stock and bond ETFs.

4. AARP Social Security Calculator. Determining when to take Social Security benefits is complicated. To help retirees make this decision, a number of online tools have been developed. While there are some excellent paid tools available, including maximizemysocialsecurity.com and socialsecuritysolutions.com, AARP offers a free Social Security Calculator. The AARP tool helps you determine how to achieve the highest monthly benefit.

5. FutureAdvisor. FutureAdvisor, like Jemstep, attempts to take the pain out of choosing an asset allocation and rebalancing a portfolio. It makes connecting investment accounts easy, recommends an asset allocation and provides projections of portfolio performance based on its recommendations.

For a premium membership, FutureAdvisor takes its tool one step further. It will actually make the trades automatically that are necessary to rebalance a portfolio to its recommended asset allocation. It will also invest new cash and even harvest tax losses at the end of each calendar year.

Rob Berger is an attorney and founder of the popular personal finance and investing blog, doughroller.net. He is also the editor of the Dough Roller Weekly Newsletter, a free newsletter covering all aspects of personal finance and investing, and the host of the weekly Dough Roller Podcast.