NestEgg News

The software itself doesn’t “guide” you exactly which investments go into which baskets…but from the 1st page of the users manual (below) you are trying to put the more conservative assets, like cash and CD’s in basket 1 and the higher risk stuff in basket 4. Medium risk in basket 2 and 3.

The idea is you want the longer term, more volatile assets, to be in later baskets so they have more time to grow and mature reducing the risk. So for stocks for example you can look at the ratings and history for each.

As far as what interest rates to use, of course everyone knows past performance is no indicator of the future, but it is a good place to start. What has been the historical rate of return for that asset.

Also one other thing …we offer free portfolio analysis…at no cost and no obligation from a licenced financial advisor and he can help with putting the assets in the right baskets.

Read this post…get a free review. I can vouch for him….he is MY financial advisor

http://nesteggsoftware.com/blog/2010/11/free-retirement-planning-review/

Excerpt from the users manual below

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Basically you allocate your investments; cash in savings, stocks, mutual funds, 401K, and IRA’s into 4 different baskets of money. Your conservative investments go in Basket 1, the more aggressive, longer term investments in Basket 4. The logic is simple; in general if the more aggressive investments have a longer time to mature, it reduces your overall retirement risk. Moderate risk investments go in Baskets 2 and 3.

Nest Egg Software has just added a cool new feature to its Retirement Planning Software that makes the tried and true basket strategy easier to get started.

Once you have filled out the balance sheet in Nest Egg Software, the most time consuming part of the set up has always been determining how much funding must be put into each of the growth baskets. To be honest it was kind of a guessing game.

No more guessing.

We have created a handy little tool that does it for you. In the image below you can see that Basket #1 has $191,000 of funding in the basket. You can clearly see that the basket is overdrawn and therefor does not have enough funding for the basket settings that have been selected.

Next to the basket amount field is a “calculator” icon.

 
Simply mouse over the icon and it tells you, “This calculator determines the minimum funds needed for the basket based on the current basket variables”:

 
Next just click on the calculator icon and it automatically determines the minimum funds needed based on the basket settings. In this case it is $210,000 and the calculator has populated the field for you automatically.

It’s that simple.

You can change any of the variables in the basket settings like desired income, retirement year, inflation rate, etc. and then you can re-click the calculator icon and it will determine the new minimum needed.

 
Nest Egg Software used to take about 15 minutes to set up.

Now with this new Nest Egg Calculator, it should cut that time at least in half.

We have had many client’s ask us “Can Nest Egg Software handle declining cash requirements as we age?”

While many people expect to have their yearly income from their Nest Egg increase year over year in retirement, some folks just don’t see it that way. Yes you do have to consider inflation, but many retirees in their later years will have paid off the mortgage and will have cut back on their traveling and vacation costs among other expenses.

They have seen their parents spend less and less as they age, so it is a valid option to consider as one of your Nest Egg Scenarios.

So for many folks it does make sense to evaluate their retirement plan with a retirement calculator that can figure in declining cash requirement as you age. Nest Egg Software is the only calculator that we know of that has this capability.

And of course, Nest Egg Software is free!

Here is how it works.

The inflation rate in Nest Egg Software defaults to 3.0%, but you can change that number to anything you like.

In this scenario below we have changed it to a negative (-1.0%).

By doing this you can show a declining cash requirement as you age as shown in the total income on the basket illustration.

 
So it is that easy. Give Nest Egg Software a try.

You can find more details and sign up for a free account at www.NestEggSoftware.com

Several of our Retirement Planning clients have asked if our software can handle things like selling a 2nd home AFTER they retire and how to account for lump sum sales of property, etc. at some point during their retirement years.

There are a few ways the Nest Egg Software Retirement Planning Software can accomplish these types of retirement scenarios.
 
As far as selling the 2nd home several years into retirement, you can account for this by adding a line item to your “income sources”. In general, the baskets are designed to hold and invest money “you currently have saved” and the income sources section of the balance sheet handles future money received like pensions, social security, etc.

 
 
You can add a line item for your 2nd home in the income sources section and enter the start date (when you plan to sell it). When the income sources kick in and contribute to your total income, the basket withdrawals are off set and reduced by the amount of income coming from other income sources. For example if you had $100K in desired income and the income sources were kicking in $30K, the software only draws $70K from the baskets in that year.
 
You can show the proceeds from the 2nd home in the year you sell it. For example if you sold the home for $200K in 2020, you could add an income line item to the income sources with an annual income of $200K and the duration of just one year. Or if you planned to reinvest the $200K in an annuity for example and draw from it for 10 years, you could show a $20K income stream for 10 years….or any combination of the two in between. You likely would take the proceeds from the home and reinvest in another product anyway that allows an annual distribution.
 
We have designed Nest Egg Software to be powerful, yet easy to use. So we consciously did not design in all of the possible “what if specifics”…but have made it flexible enough to handle these types of retirement scenarios.

If you are holding on to property and plan to sell it after you retire you can handle it the same way.
 
As far as the life insurance distribution or an annuity it can handle that as well. Basically it can handle any anticipated income stream whether it is a lump sum in one year or an annual draw over time.
 
The bottom line is the Nest Egg software handles 3 kinds of money:
 
1 – Money you already have saved which goes into the baskets
2 – Money you receive after retirement which goes in the income sources of the balance sheet
3 – Money you plan to save before retirement goes in a line item under cash in the balance sheet

See this Article.
 
http://nesteggsoftware.com/blog/2010/10/how-to-include-anticipated-savings-prior-to-my-retirement-date-in-nest-egg-software/
 
 You can see an overview of Nest Egg Software here:

http://nesteggsoftware.com/blog/2010/04/retirement-planning-software-quick-start-guide/

Also we are offering a free portfolio analysis for a limited time. It does not cost a thing and we promise we won’t try and sell you anything you don’t need.

Learn more about it here:

http://nesteggsoftware.com/blog/2010/11/free-retirement-planning-review/