New Tax Planning Feature Enables More Comprehensive Retirement Coverage

New feature enables advisors to more easily connect with clients on many different levels for more fulfilling and complete retirement options

RICHMOND, Va., April 2, 2020 /PRNewswire/ — Envestnet | MoneyGuide today announced the launch of a new Tax Planning feature that will enable advisors to have deeper conversations with clients regarding different strategies and show via interactive graphics and illustrations the potential impact of each across personalized retirement plans.

Since the SECURE Act recently became law, advisors say clients have more questions than ever about rules related to required minimum distributions (RMDs) for certain retirement accounts and how the new law could impact their own financial plan.

Advisors are also finding that clients have some common misconceptions about paying taxes in retirement, as pre-retirees often assume they will automatically pay less to Uncle Sam during their golden years. However, today the opposite is more likely. MoneyGuide’s new Tax Planning feature allows advisors to shed light on these topics, as it quantifies the expected savings and illustrates the potential impact of implementing different strategies in the plan, thereby helping reduce a client’s tax burden during retirement.

Helping Advisors Help Their Clients

“Our goal was to deliver a solution that helps advisors feel confident in having these conversations and educating their clients so they can make informed decisions,” said Tony Leal, President of Envestnet | MoneyGuide. “Using the personalized breakdown as a backdrop, advisors can discuss the tradeoffs of taking qualified distributions early in retirement, when tax brackets may be lower, to avoid being pushed into higher tax brackets later and the overall potential tax savings if implemented in the plan.”

Based on the client’s goal – whether it’s to lower taxes during retirement, improve lifetime tax savings, or maximize the amount to their heirs – advisors can calculate a Roth Conversion, Qualified Charitable Distributions (QCDs) and Qualified Distributions, to dynamically test the strategies, and immediately see the impact on the client’s plan, including probability of success and overall tax savings.

Some examples of what this new feature can help advisors show clients:

  • Roth Conversion: Show how converting a Traditional IRA or an Employer Retirement Plan to Roth Assets impacts your tax burden and the assets left to heirs. Based on the clients’ projected taxable income during retirement, auto calculate the amount to convert that maximizes the use of a selected tax bracket.
  • Qualified Charitable Distribution (QCDs): Show the impact on lifetime tax savings of gifting up to $100,000 of Qualified Retirement Assets directly to charities. Establish the amount to gift based on the client’s projected Required Minimum Distribution.
  • Qualified Distribution: Show the impact of taking distributions from Traditional IRA or an Employer Retirement Plan early in retirement rather than waiting until RMDs begin. Based on the clients’ projected taxable income during retirement, instantly determine the amount that maximizes the distribution in years where there is lower taxable income.
At this point and time in the industry, financial advisors are being asked more and more by their clients to assist them not just with retirement in a general sense, but to also share guidance on ways to help minimize how much they pay in taxes throughout retirement...

These strategies are available in MoneyGuidePro® as Goal Strategies on the What If Worksheet. Interactive visual models to demonstrate these strategies in the plan are available in MoneyGuideElite.

Comprehensive Retirement Assistance

“At this point and time in the industry, financial advisors are being asked more and more by their clients to assist them not just with retirement in a general sense, but to also share guidance on ways to help minimize how much they pay in taxes throughout retirement,” said Kevin Hughes, Chief Growth Officer of Envestnet | MoneyGuide.

“They also want to know how much they can potentially provide to their heirs in the most tax-efficient fashion. And they want these strategies all in coordination with, obviously, still being successful in retirement. Our developers had this in mind when they built this new tool.”




About Envestnet
Envestnet, Inc. (NYSE: ENV) is a leading provider of intelligent systems for wealth management and financial wellness. Envestnet’s unified technology empowers enterprises and advisors to more fully understand their clients and deliver actionable intelligence that drives better outcomes and improves lives.
Envestnet Wealth Solutions enables enterprises and advisors to better manage client outcomes and strengthen their practices through its leading Wealth Management Operating System and advanced portfolio solutions. Envestnet | Tamarac provides portfolio management, reporting, trading, rebalancing and client portal solutions for registered investment advisers (“RIAs”). Envestnet | MoneyGuide provides goals-based financial planning applications. Envestnet Data & Analytics enables innovation and insights through its Envestnet | Yodlee data aggregation platform.
More than 100,000 advisors and more than 4,700 companies including: 16 of the 20 largest U.S. banks, 43 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs and hundreds of internet services companies leverage Envestnet technology and services. Envestnet solutions enhance knowledge of the client, accelerate client on-boarding, improve client digital experiences and help drive better outcomes for enterprises, advisors and their clients.
For more information on Envestnet | MoneyGuide, please visit www.moneyguidepro.com and follow us on Twitter at @ENVMoneyGuide.