Maxifi

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CPA_RIA
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Maxifi

Post by CPA_RIA »

I'm considering subscribing to the below financial planning software for a year. Has anyone tried it? If so, any feedback would be helpful. Do they need PII? Did you find them to be secure? Was the information helpful? Are there competing products that do it better?

https://maxifiplanner.com/
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simplesimon
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Re: Maxifi

Post by simplesimon »

What are you trying to do?

They do not need PII, it's all numbers and assumptions you manually input (or that they have set as default).

The information is helpful if you keep certain caveats in mind. The numbers are based on all the assumptions you put in. The engine is pretty powerful as you can tinker with the assumptions, build out multiple different scenarios, and compare them to each other. I don't know of any competing products, but haven't researched it either.

As a bonus they offered free webinars to go over different interesting topics over the past year.
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CPA_RIA
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Re: Maxifi

Post by CPA_RIA »

That's great - thanks.

Basically, I'm trying to get some objective feedback on what my savings/retirement strategy will produce. I want to know if I need to make any tweaks.
Exchme
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Re: Maxifi

Post by Exchme »

If you do subscribe, please give some feedback to the forum on what you find, ease of use, features, etc. We're hungry for powerful tools.
kaesler
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Re: Maxifi

Post by kaesler »

I recommend it highly. Been using it since release.
yog
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Re: Maxifi

Post by yog »

Strengths:
Most tax accurate planner that I've used so far
Tax-optimized planning when using the Maximizer, which is my preferred method of planning vs. goals-based used by almost all other tools
SS claiming engine is the most accurate I've used, more so than openSS since you have tax & growth info included

Weaknesses:
No ACA support (may be important for some)
Roth conversions can be planned & compared, but not automatically calculated

They also have features we don't use, like Monte Carlo, spending & investment glide paths, etc., and annuity planning
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CPA_RIA
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Re: Maxifi

Post by CPA_RIA »

yog wrote: Wed Dec 01, 2021 10:27 am Strengths:
Most tax accurate planner that I've used so far
Tax-optimized planning when using the Maximizer, which is my preferred method of planning vs. goals-based used by almost all other tools
SS claiming engine is the most accurate I've used, more so than openSS since you have tax & growth info included

Weaknesses:
No ACA support (may be important for some)
Roth conversions can be planned & compared, but not automatically calculated

They also have features we don't use, like Monte Carlo, spending & investment glide paths, etc., and annuity planning
Thanks for that - I think I may splurge and get the Monte Carlo simulations, too. So I'll let y'all know how helpful that feature is.
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sleepysurf
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Re: Maxifi

Post by sleepysurf »

Maxifi is apparently the (newer) web-based version of ESPlanner, with some slightly different capabilities... https://economicsecurityplanning.com/es ... comparison

The former is no longer available for sale/download, and future development will focus on Maxifi. Here's a recent review... https://www.doughroller.net/personal-fi ... er-review/

I'm thinking of taking it for a "test drive" (comparing to PersonalCapital and eMoneyAdvisor/PlanVision) but their refund policy is a bit nebulous... https://economicsecurityplanning.com/or ... ent-policy
Retired 2018 | currently ~64/33/3 (partially sliced and diced, with a slowly rising equity glide path)
twh
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Re: Maxifi

Post by twh »

I've used ESPlanner since soon after it came out and switched over to Maxifi once it had all the same capability. I highly recommend it. Very very useful for understanding what you can spend and not run out of money. Definitely get the Monte Carlo version. It really helped me understand that retiring was going to be ok.
tonyclifton
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Re: Maxifi

Post by tonyclifton »

We are using the version with the Monte Carlo. Their online webinars and technical support are excellent. The technical support is more than just nuts-and-bolts tech. They will explain to you the thought process and rationale behind the interface and algorithms. It is opinionated software. What I mean by this is they have a financial framework around what brings the most happiness which is described here:
https://maxifiplanner.com/consumption-s ... l-planning

I am buying into this framework on how to view money long-term.

They also err on the side of caution with their assumptions (you can easily override). In short, if you are happy with the worst/realistic case then you will be overjoyed with the better case.

I will use it in January to update our assets and then a few times throughout the year to tinker with some assumptions.

You do need to enter your dob and assets which is PII. No social security number needed. The privacy policy is on their website.

For some reason I trust it more than the free tools - the reporting and support are certainly better.
mrb09
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Re: Maxifi

Post by mrb09 »

I've used maxi a few times, I got a subscription and let it lapse, and now have a subscription again.

Maxi seems unique in that rather than telling you how long your money will last with your defined set of expenses, it tells you how much money you can safely spend every year, "smoothing" your income from employed to retired. That really made me think differently, so that alone made it worth it for me.

On the con side, it seems a little complex and/or opaque on defining tax expenses in a way that I can't quite decipher. Fault could be mine.

My primary planner these days is Prana gold, but I still check in with maxfi from time to time for a second opinion.
vas
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Re: Maxifi

Post by vas »

I gave Maxifi a try last year. Initially I found it easy to setup; data entry was simple and intuitive. Creating a base scenario and them comparing to alternatives was straight forward and useful. The output is voluminous and takes some time to digest. It definitely takes more commitment to master than the free on line tools.

The biggest conceptual problem was the premise of maximizing annual spending. There's logic behind the approach and an earlier poster included a link describing it. I'm not suggesting its a bad approach but I found it hard to accept. Most tools take annual spending as an input rather than producing it as a result.
“For every complex problem, there is a solution that is clear, simple, and wrong.” - H. L. Mencken
ROIGuy
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Re: Maxifi

Post by ROIGuy »

I have used it for about 1.5 years. Much more in-depth view of your future finances (withdrawals, taxes, etc) then most other software programs that I have tried. A little bit of a learning curve but they have some good video help and whenever I have contacted them with a question they have been very responsive. (I.e) I put in my DW pension info starting at age 70 (no cola), I noticed that when I looked at our numbers over 20 years her pension kept decreasing in value and I couldn't understand why, when the monthly check would always be the same. When I emailed Maxifi they explained that the software automatically decreased it's valued (based on my own inflation estimation) over the years and that there was no cola with the pension.

Other issues that I didn't like was with the 401k plan. There was no section for Roth 401k's, only traditional. I had to create a separate 401k plan and categorize it as a Roth (which we will do with a future rollover in retirement), and reduce the regular 401k by the same amount. Little things like that I would like to see adjusted, but overall it really gives you a really good overall view of your future finances (based on the numbers you put in). I really do like the feature of creating survivorship situations as well as creating other scenarios that you can compare against each other.
tonyclifton
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Re: Maxifi

Post by tonyclifton »

Mr.BB wrote: Wed Dec 01, 2021 12:52 pm When I emailed Maxifi they explained that the software automatically decreased it's valued (based on my own inflation estimation) over the years and that there was no cola with the pension.
This feature really helps illustrate inflation and likewise the cumulative tax expenses.
ROIGuy
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Re: Maxifi

Post by ROIGuy »

tonyclifton wrote: Wed Dec 01, 2021 1:00 pm
Mr.BB wrote: Wed Dec 01, 2021 12:52 pm When I emailed Maxifi they explained that the software automatically decreased it's valued (based on my own inflation estimation) over the years and that there was no cola with the pension.
This feature really helps illustrate inflation and likewise the cumulative tax expenses.
+1
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Wiggums
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Re: Maxifi

Post by Wiggums »

Mr.BB wrote: Wed Dec 01, 2021 12:52 pm I put in my DW pension info starting at age 70 (no cola), I noticed that when I looked at our numbers over 20 years her pension kept decreasing in value and I couldn't understand why, when the monthly check would always be the same. When I emailed Maxifi they explained that the software automatically decreased it's valued (based on my own inflation estimation) over the years and that there was no cola with the pension.
The Fidelity tool does the same thing. I guess it makes sense, because they apply inflation to the appropriate columns.
"I started with nothing and I still have most of it left."
kaesler
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Re: Maxifi

Post by kaesler »

I’ve also had very prompt replies when I had questions about what MaxiFi was computing. Always super helpful.
Toadvine
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Re: Maxifi

Post by Toadvine »

I have been using Maxifi for about three years. I am happy with it. Very sophisticated. I like the features others have mentioned (e.g., SS optimization, flexibility in return and inflation assumptions, the focus on how much you can spend), but also very much like the balance sheet it presents. For $90 per year, well worth it.
“If trouble comes when you least expect it then maybe the thing to do is to always expect it.” | ― Cormac McCarthy, The Road
bigskyguy
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Re: Maxifi

Post by bigskyguy »

kaesler wrote: Wed Dec 01, 2021 10:15 am I recommend it highly. Been using it since release.
Ditto
bigskyguy
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Re: Maxifi

Post by bigskyguy »

We have used since its inception. Extraordinarily powerful and versatile. Customer support is top notch.

For what you receive, it us very fairly priced.
dandinsac
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Re: Maxifi

Post by dandinsac »

I have used it extensively for the past 3 years as I get closer to retirement. It has really helped me evaluate the various financial decisions that I make:

1. What is better - 401K tax deferred or 401K Roth?
2. How much benefit is prepaying our mortgage versus investing?
3. How much does it push back my retirement if we buy a new house?
4. How much does it accelerate my retirement if we move from California to another state?
5. Should I start my pension early?
6. How much does starting social security sooner or later help?
7. How much does working an extra year help us financially?
8. How much does a refi help?
9. Should I reduce my 401K to the minimum required to get the match?

To model all of these in a spreadsheet would be a lot of effort and I might get it wrong by screwing up a single formula.
simpletone
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Re: Maxifi

Post by simpletone »

vas wrote: Wed Dec 01, 2021 12:38 pm I gave Maxifi a try last year. Initially I found it easy to setup; data entry was simple and intuitive. Creating a base scenario and them comparing to alternatives was straight forward and useful. The output is voluminous and takes some time to digest. It definitely takes more commitment to master than the free on line tools.

The biggest conceptual problem was the premise of maximizing annual spending. There's logic behind the approach and an earlier poster included a link describing it. I'm not suggesting its a bad approach but I found it hard to accept. Most tools take annual spending as an input rather than producing it as a result.
My experience was the same as above. I used it for a year, and was confident in what it was telling me; however, I really struggled with the max spending concept as a result. While it is intuitive, it's not how I want to look at my situation and circumstances. I opted not to renew. I aim to give Pralana a look, as others have reviewed that well, at some point in the future.
SnowBog
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Re: Maxifi

Post by SnowBog »

sleepysurf wrote: Wed Dec 01, 2021 11:17 am Maxifi is apparently the (newer) web-based version of ESPlanner, with some slightly different capabilities... https://economicsecurityplanning.com/es ... comparison

The former is no longer available for sale/download, and future development will focus on Maxifi. Here's a recent review... https://www.doughroller.net/personal-fi ... er-review/

I'm thinking of taking it for a "test drive" (comparing to PersonalCapital and eMoneyAdvisor/PlanVision) but their refund policy is a bit nebulous... https://economicsecurityplanning.com/or ... ent-policy
FWIW I tried it out a year or so ago, I decided to cancel, and don't remember any issues getting my refund.

From what I can remember, there were lots of things I liked about it.

But by the time I tried it, I already had a fairly robust home grown Excel model I was using, and Maxfi didn't really give me anything significant I didn't already know/have.

Parlana Gold is another alternative. It's basically an Excel file on steroids. Compared to Maxfi, worse user interface and more cumbersome to use. But Parlana Gold is a "local" solution for those that don't want their data in the cloud. And at the time I compared, it had the best optimization of Roth conversions.
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CPA_RIA
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Re: Maxifi

Post by CPA_RIA »

SnowBog wrote: Wed Dec 01, 2021 10:13 pm
sleepysurf wrote: Wed Dec 01, 2021 11:17 am Maxifi is apparently the (newer) web-based version of ESPlanner, with some slightly different capabilities... https://economicsecurityplanning.com/es ... comparison

The former is no longer available for sale/download, and future development will focus on Maxifi. Here's a recent review... https://www.doughroller.net/personal-fi ... er-review/

I'm thinking of taking it for a "test drive" (comparing to PersonalCapital and eMoneyAdvisor/PlanVision) but their refund policy is a bit nebulous... https://economicsecurityplanning.com/or ... ent-policy
FWIW I tried it out a year or so ago, I decided to cancel, and don't remember any issues getting my refund.

From what I can remember, there were lots of things I liked about it.

But by the time I tried it, I already had a fairly robust home grown Excel model I was using, and Maxfi didn't really give me anything significant I didn't already know/have.

Parlana Gold is another alternative. It's basically an Excel file on steroids. Compared to Maxfi, worse user interface and more cumbersome to use. But Parlana Gold is a "local" solution for those that don't want their data in the cloud. And at the time I compared, it had the best optimization of Roth conversions.
So, based on all the positive feedback I bought it last night. Early impressions are all positive. Last evening was mainly data entry & I looked at the base plan briefly. Admittedly, I need more time to review and digest.

I also have plenty of Excel models that I've done on my own and these preliminary results weren't far off. It's funny, b/c my first reaction, too, was, why did I spend $150 to get information i already knew. However, the real value is ONLY spending $150 to get validation that i didn't make any costly errors!
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simplesimon
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Re: Maxifi

Post by simplesimon »

I ran into the issue of cash constraint, and believe many Bogleheads and high-savers will too.

https://support.maxifi.com/support/solu ... constraint

Certainly a good problem to have and one that's allowed me to feel a little better about spending. One solution not mentioned by Maxifi is borrowing.
Gandolf
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Re: Maxifi

Post by Gandolf »

I do not have any experience with this particular retirement planner, but it sounds very similar to the www.NewRetirement.com online planner.

Anyone have experience with both who might be able to comment on a comparison of the two?
SnowBog
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Re: Maxifi

Post by SnowBog »

CPA_RIA wrote: Thu Dec 02, 2021 7:58 am
SnowBog wrote: Wed Dec 01, 2021 10:13 pm
sleepysurf wrote: Wed Dec 01, 2021 11:17 am Maxifi is apparently the (newer) web-based version of ESPlanner, with some slightly different capabilities... https://economicsecurityplanning.com/es ... comparison

The former is no longer available for sale/download, and future development will focus on Maxifi. Here's a recent review... https://www.doughroller.net/personal-fi ... er-review/

I'm thinking of taking it for a "test drive" (comparing to PersonalCapital and eMoneyAdvisor/PlanVision) but their refund policy is a bit nebulous... https://economicsecurityplanning.com/or ... ent-policy
FWIW I tried it out a year or so ago, I decided to cancel, and don't remember any issues getting my refund.

From what I can remember, there were lots of things I liked about it.

But by the time I tried it, I already had a fairly robust home grown Excel model I was using, and Maxfi didn't really give me anything significant I didn't already know/have.

Parlana Gold is another alternative. It's basically an Excel file on steroids. Compared to Maxfi, worse user interface and more cumbersome to use. But Parlana Gold is a "local" solution for those that don't want their data in the cloud. And at the time I compared, it had the best optimization of Roth conversions.
So, based on all the positive feedback I bought it last night. Early impressions are all positive. Last evening was mainly data entry & I looked at the base plan briefly. Admittedly, I need more time to review and digest.

I also have plenty of Excel models that I've done on my own and these preliminary results weren't far off. It's funny, b/c my first reaction, too, was, why did I spend $150 to get information i already knew. However, the real value is ONLY spending $150 to get validation that i didn't make any costly errors!
Bingo!

That's part of why I've tried out many of these tools. Minimally to make sure their results aren't drastically different than what I had already figured out.

Ideally to find something that meets all my needs and I can do away with maintaining my own Excel models. I haven't found the latter yet, but I'll keep looking!
SnowBog
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Re: Maxifi

Post by SnowBog »

Gandolf wrote: Thu Dec 02, 2021 9:49 am I do not have any experience with this particular retirement planner, but it sounds very similar to the www.NewRetirement.com online planner.

Anyone have experience with both who might be able to comment on a comparison of the two?
I've tried them both, sadly I didn't keep good notes, and it's been awhile so my memory is fuzzy...

If I recall, I had positive impressions of both, but like I noted for Maxifi, my own modeling/tools were enough that I didn't see a value in maintaining a subscription for another tool. But for someone stating out, they could be amazing.

My recollection may be completely wrong or inversed... But between the two, I think I recall NewRetirement having a more intuitive user interface, but not as full featured as Maxifi. Ultimately though, I do recall positive impressions of both.
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bobcat2
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Re: Maxifi

Post by bobcat2 »

Maxifi and its predecessor, ESPlanner, are based on the life-cycle economics approach to household finances. In simplest terms Maxifi assumes that a household wants, to the extent possible, to optimally smooth spending over the entire remaining life-cycle of the household.

Boston University economist Larry Kotlikoff is one of the best researchers in this area of economics and he developed Maxifi to be used by people actually planning their own financial futures. Economists have built many of these life-cycle optimization models, which use dynamic programming techniques to solve difficult life-cycle economic problems for economic research purposes, but this is the only one of these models that I am aware of that is commercially available for people to use in their own financial lives.*

For a gentle approach to how dynamic programming works in Maxifi I recommend the book, Life-Cycle Economics and Personal Finance, by Aaron Stevens and Robert Puelz. Stevens is also at Boston U and has worked with Kotlikoff in introducing life-cycle economic planning to Boston U students and staff.
Link to book - https://www.amazon.com/Life-Cycle-Econ ... 1984037544

Lastly, Larry Kotlikoff has a new book that will be released early next month on personal finance using the life-cycle approach to financial planning. You can "look inside" Money Magic now at Amazon.
Link to Money Magic - https://www.amazon.com/Money-Magic-Econ ... 0316541958

BobK

* There is one other life-cycle model you can try that is free but IMO not very user friendly. That is Gordon Irlam's AACalc.
Link to AACalc - https://www.aacalc.com

Gordon infrequently posts at Bogleheads as gordoni2.
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.
ncbill
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Re: Maxifi

Post by ncbill »

Gandolf wrote: Thu Dec 02, 2021 9:49 am I do not have any experience with this particular retirement planner, but it sounds very similar to the www.NewRetirement.com online planner.

Anyone have experience with both who might be able to comment on a comparison of the two?
I use both & in the future will probably drop MaxiFi & just keep New Retirement even though the latter is not as sophisticated.

Knowing the maximum I can spend smoothed over my projected lifetime (MaxiFi's claim to fame) even in an optimized model is a nice feature but not that personally relevant since I'll never spend that much annually anyway.
cbeck
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Re: Maxifi

Post by cbeck »

I used Esplanner for many years and switch to Maxifi this year. I like them both since they take the most variables into account of any financial planning software to calculate the future consequences based on my assumptions. So, you get a panoramic view of the rest of your financial life.

However, I have found a couple of limitations, one bug and one unexpected side effect of their method of calculation. The tech support was very responsive and helpful. They acknowledged the bug which only occurs in a boundary condition that few users will step on. The other problem was not a defect in their software, but did have real consequences for the scenario I was evaluating. They make the simplifying assumption that their results will have a resolution of one year. I was running a scenario for a friend who was considering trading up to a more expensive apartment. The transaction under consideration would require a large enough down payment that she would have had to take a distribution from a tax-deferred account. I ran the scenario and all looked okay, but when I checked to see where Maxifi took the down payment from, none of her assets showed any large decrement. In discussions with Maxifi I realized that having a resolution of one year means effectively that Maxifi assumes that all transaction for the year occur on the same day. So, her tax-deferred account never got decremented for the down payment of her new place, because Maxifi took that amount out of the proceeds of the sale of her current apartment. But, of course her intention was to sell the current apartment only after moving into the new apartment. Since all transactions occur on the same day there is no way to sequence them, other than spreading them artificially across a calendar year boundary. But the difficulty lies in identifying such a problem after which one can work around it.

So, Maxifi is complicated to the point that the implications of its analysis can be obscure. You have to think about the meaning of the results carefully. The software does not explain its choices.

So, I remain enthusiastic about Maxifi with the caveat that the user needs to understand the details thoroughly.
SnowBog
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Re: Maxifi

Post by SnowBog »

cbeck wrote: Sun Dec 05, 2021 10:34 pm The transaction under consideration would require a large enough down payment that she would have had to take a distribution from a tax-deferred account. I ran the scenario and all looked okay, but when I checked to see where Maxifi took the down payment from, none of her assets showed any large decrement. In discussions with Maxifi I realized that having a resolution of one year means effectively that Maxifi assumes that all transaction for the year occur on the same day. So, her tax-deferred account never got decremented for the down payment of her new place, because Maxifi took that amount out of the proceeds of the sale of her current apartment.
Maybe off-topic - but out of curiosity - why take the distribution from tax-deferred? Personally, I'd be thinking of getting a loan - either on the new property and/or some sort of "bridge" or "personal" loan to make up the difference before taping into tax-deferred - especially if it's just a temporary/transitory need (as there's no way to get it back into pre-tax, and if < 59.5 would incur a 10% penalty as well). While I'd normally never even consider one - and would be "last choice" for me personally - I might even be tempted to look at a 401k/margin loan - which could be repaid when the old place sell.
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bobcat2
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Re: Maxifi

Post by bobcat2 »

ncbill wrote: Sun Dec 05, 2021 4:12 pmKnowing the maximum I can spend smoothed over my projected lifetime (MaxiFi's claim to fame) even in an optimized model is a nice feature but not that personally relevant since I'll never spend that much annually anyway.
This complaint is frequently made and is easy to solve as well as being a misunderstanding of what the model is doing.

If you want to spend less, simply increase the amount that must be preserved at the end of life, which is implicitly exactly what you are doing.

The model is showing how to use your financial resources most efficiently, given the constraints on your financial resources.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.
SnowBog
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Re: Maxifi

Post by SnowBog »

bobcat2 wrote: Mon Dec 06, 2021 10:34 am
ncbill wrote: Sun Dec 05, 2021 4:12 pmKnowing the maximum I can spend smoothed over my projected lifetime (MaxiFi's claim to fame) even in an optimized model is a nice feature but not that personally relevant since I'll never spend that much annually anyway.
This complaint is frequently made and is easy to solve as well as being a misunderstanding of what the model is doing.

If you want to spend less, simply increase the amount that must be preserved at the end of life. The model is showing how to use your financial resources most efficiently, given the constraints on your financial resources.

BobK
BobK,

If you happen to know... How does the model deal with different "life stages" so to speak?

When I last tried Maxifi, I was using simple assumptions like we needed $x/year in retirement (average of all years).

But as I've gotten closer to potential retirement, and more detailed in my planning, our reality will look more like:
  • Highest expenses (nearly 2x now or later expenses) during initial retirement years while child is still in college (college is covered separately) so we still have higher medical/food/etc. travel/etc. expenses, plus plans for increased travel/home remodeling/etc.
  • Expenses start to lower 3-5 years later as child "launches"
  • Expenses lower further after another 5-7 years (10 years total), when remodeling and initial travel plans start to lessen
  • At 65, expectations of decrease in medical coverage switching to Medicare, along with income streams from delayed pensions & social security kicking in between 66 - 70 will see our expenses supported by the portfolio at their lowest
I definitely didn't try to get that detailed last time. Wondering if it's worth trying again now that I know /expecte more...
yog
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Re: Maxifi

Post by yog »

SnowBog wrote: Mon Dec 06, 2021 10:45 am
bobcat2 wrote: Mon Dec 06, 2021 10:34 am
ncbill wrote: Sun Dec 05, 2021 4:12 pmKnowing the maximum I can spend smoothed over my projected lifetime (MaxiFi's claim to fame) even in an optimized model is a nice feature but not that personally relevant since I'll never spend that much annually anyway.
This complaint is frequently made and is easy to solve as well as being a misunderstanding of what the model is doing.

If you want to spend less, simply increase the amount that must be preserved at the end of life. The model is showing how to use your financial resources most efficiently, given the constraints on your financial resources.

BobK
BobK,

If you happen to know... How does the model deal with different "life stages" so to speak?

When I last tried Maxifi, I was using simple assumptions like we needed $x/year in retirement (average of all years).

But as I've gotten closer to potential retirement, and more detailed in my planning, our reality will look more like:
  • Highest expenses (nearly 2x now or later expenses) during initial retirement years while child is still in college (college is covered separately) so we still have higher medical/food/etc. travel/etc. expenses, plus plans for increased travel/home remodeling/etc.
  • Expenses start to lower 3-5 years later as child "launches"
  • Expenses lower further after another 5-7 years (10 years total), when remodeling and initial travel plans start to lessen
  • At 65, expectations of decrease in medical coverage switching to Medicare, along with income streams from delayed pensions & social security kicking in between 66 - 70 will see our expenses supported by the portfolio at their lowest
I definitely didn't try to get that detailed last time. Wondering if it's worth trying again now that I know /expecte more...
It allows some fine-grained assumptions if you want to go that far. Per child launch age, adult-equivalency cost factor, and year-by-year annual living standard index entry.
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bobcat2
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Re: Maxifi

Post by bobcat2 »

Gandolf wrote: Thu Dec 02, 2021 9:49 am I do not have any experience with this particular retirement planner, but it sounds very similar to the www.NewRetirement.com online planner.

Anyone have experience with both who might be able to comment on a comparison of the two?
They are quite different. NewRetirement defaults to your current spending and saving rates, implicitly assuming these are approximately correct rates for you going forward. Then the user tweaks these values to see if they can be improved.

Maxifi finds the best spending and saving rates for you given your financial resources. These rates are often quite different than the rates people are actually using and errors of "only" 10% in annual spending and saving decisions can result in large lifetime errors. As an example, if you are 45 or less and over your remaining working lifetime the best average saving rate is 10%, then saving on average 8% or 12% will mess up your lifetime finances a lot. While it is true that the downside error (overspending) is worse than the same sized upside error, oversaving also seriously reduces your lifetime standard of living.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.
twh
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Re: Maxifi

Post by twh »

Personally, I like knowing my spending limit. Not that I try and hit that limit, but I know if I stay below that limit I should be ok. And, if I want to splurge on an extravagent vacation, that's fine. I have a new car every X years baked into the calculation and if I want to accelerate that, I can. Frankly, I think knowing the limit is better.
tonyclifton
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Re: Maxifi

Post by tonyclifton »

SnowBog wrote: Mon Dec 06, 2021 10:45 am If you happen to know... How does the model deal with different "life stages" so to speak?
This can be achieved using the "Special Expenses and Receipts" feature.

Using consumption smoothing, you could have a special expense and the software will model how to spend a little less each year so you can fund the special expense while keeping a smooth level of discretionary spending.
GetSmarter
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Re: Maxifi

Post by GetSmarter »

Does anyone know if Maxifi allows to input Inherited IRAs with RMDs?

I wrote them and never heard back. I'd like to know how to address these RMDs before I potentially purchase.

Thank you.
“The more simple we are, the more complete we become.” August Rodin | | “The less I needed, the better I felt.” Charles Bukowski
yog
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Re: Maxifi

Post by yog »

GetSmarter wrote: Mon Dec 06, 2021 11:21 am Does anyone know if Maxifi allows to input Inherited IRAs with RMDs?

I wrote them and never heard back. I'd like to know how to address these RMDs before I potentially purchase.

Thank you.
I don't see anything specific to inherited IRAs, and don't know if this gets to what you need, but the closest looks like setting it up as a retirement account and depleting it with amount-based special withdrawals on a time schedule you create. Here's the support article with screenshots:
https://support.maxifi.com/support/solu ... they-work-
tonyclifton
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Re: Maxifi

Post by tonyclifton »

GetSmarter wrote: Mon Dec 06, 2021 11:21 am Does anyone know if Maxifi allows to input Inherited IRAs with RMDs?

I wrote them and never heard back. I'd like to know how to address these RMDs before I potentially purchase.

Thank you.
Is this an IRA you already inherited or one that you will inherit in the future?

If you already inherited it, then just add an IRA account with the current balance.

If you will inherit it in the future, you could add an IRA account with a current balance of zero then set an arbitrary date in the future where a contribution will be made.

RMDs are covered on this page Do you account for Required Minimum Distributions (RMDs)?
GetSmarter
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Re: Maxifi

Post by GetSmarter »

tonyclifton wrote: Mon Dec 06, 2021 12:05 pm
GetSmarter wrote: Mon Dec 06, 2021 11:21 am Does anyone know if Maxifi allows to input Inherited IRAs with RMDs?

I wrote them and never heard back. I'd like to know how to address these RMDs before I potentially purchase.

Thank you.
Is this an IRA you already inherited or one that you will inherit in the future?

If you already inherited it, then just add an IRA account with the current balance.

If you will inherit it in the future, you could add an IRA account with a current balance of zero then set an arbitrary date in the future where a contribution will be made.

RMDs are covered on this page Do you account for Required Minimum Distributions (RMDs)?
I already inherited and I'm significantly younger than 72 when the program kicks in. On page you suggested, it states

Required Minimum Distributions (RMDs) are calculated for non-Roth accounts and imposed in cases where you indicate that smooth withdrawals should begin later than age 72. If you indicate a “special withdrawal” that is lower than the RMD, the RMD will be used instead.

I do not understand if special withdrawal would work in my case. Do you understand it?
“The more simple we are, the more complete we become.” August Rodin | | “The less I needed, the better I felt.” Charles Bukowski
GetSmarter
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Re: Maxifi

Post by GetSmarter »

GetSmarter wrote: Mon Dec 06, 2021 12:14 pm
tonyclifton wrote: Mon Dec 06, 2021 12:05 pm
GetSmarter wrote: Mon Dec 06, 2021 11:21 am Does anyone know if Maxifi allows to input Inherited IRAs with RMDs?

I wrote them and never heard back. I'd like to know how to address these RMDs before I potentially purchase.

Thank you.
Is this an IRA you already inherited or one that you will inherit in the future?

If you already inherited it, then just add an IRA account with the current balance.

If you will inherit it in the future, you could add an IRA account with a current balance of zero then set an arbitrary date in the future where a contribution will be made.

RMDs are covered on this page Do you account for Required Minimum Distributions (RMDs)?
I already inherited and I'm significantly younger than 72 when the program kicks in. On page you suggested, it states

Required Minimum Distributions (RMDs) are calculated for non-Roth accounts and imposed in cases where you indicate that smooth withdrawals should begin later than age 72. If you indicate a “special withdrawal” that is lower than the RMD, the RMD will be used instead.

I do not understand if special withdrawal would work in my case. Do you understand it?
I just found another Maxifi link that May explain what how an Inherited IRA RMDs can be calculated....

If you click on the retirement account area in your profile, you will see a link to open the retirement account settings and assumptions. There you can specify the age at which smooth withdrawals begin and end. If you begin smooth withdrawals past age 72, you will see that the program imposes Required Minimum Distributions (RMDs) until the age you indicate smooth withdrawals should begin, at which point it will create smooth withdrawals from that point forward based on the remaining balance.
“The more simple we are, the more complete we become.” August Rodin | | “The less I needed, the better I felt.” Charles Bukowski
tonyclifton
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Re: Maxifi

Post by tonyclifton »

GetSmarter wrote: Mon Dec 06, 2021 12:14 pm I do not understand if special withdrawal would work in my case. Do you understand it?
Sorry, I do not.
ncbill
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Re: Maxifi

Post by ncbill »

GetSmarter wrote: Mon Dec 06, 2021 11:21 am Does anyone know if Maxifi allows to input Inherited IRAs with RMDs?

I wrote them and never heard back. I'd like to know how to address these RMDs before I potentially purchase.

Thank you.
I have a non-spouse inherited IRA under the old rules and no calculator I've used so far will automatically handle RMDs...have to ballpark an amount to be put in as an annual withdrawal.
cbeck
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Re: Maxifi

Post by cbeck »

SnowBog wrote: Sun Dec 05, 2021 10:51 pm
cbeck wrote: Sun Dec 05, 2021 10:34 pm The transaction under consideration would require a large enough down payment that she would have had to take a distribution from a tax-deferred account. I ran the scenario and all looked okay, but when I checked to see where Maxifi took the down payment from, none of her assets showed any large decrement. In discussions with Maxifi I realized that having a resolution of one year means effectively that Maxifi assumes that all transaction for the year occur on the same day. So, her tax-deferred account never got decremented for the down payment of her new place, because Maxifi took that amount out of the proceeds of the sale of her current apartment.
Maybe off-topic - but out of curiosity - why take the distribution from tax-deferred? Personally, I'd be thinking of getting a loan - either on the new property and/or some sort of "bridge" or "personal" loan to make up the difference before taping into tax-deferred - especially if it's just a temporary/transitory need (as there's no way to get it back into pre-tax, and if < 59.5 would incur a 10% penalty as well). While I'd normally never even consider one - and would be "last choice" for me personally - I might even be tempted to look at a 401k/margin loan - which could be repaid when the old place sell.
Welcome to the bizarro world of the cooperative apartment market in New York City. The real estate agent strongly discouraged my friend from getting a mortgage on her current apartment which she owns free and clear or a bridge loan. The reason? Coop boards "don't like" second mortgages and bridge loans. The sale of an apartment (in fact, not a property but shares in the coop association accompanied by a proprietary lease) requires the approval of the coop board which can be withheld for any reason or for no reason, excepting only for protected classes such a race, religion, sex, etc.

There are stories of sales refused by the coop board, because the sale price was too low.

I would never have bought into a coop myself. While I lived in NYC I owned a condo in a pre-war (WWI, that is) building, but there are very few such condos. Most of the housing stock consists of coops, for very interesting historical reasons. Provincials that they are, NewYorkers don't find anything unusual in the coop ownership structure.

I suggested that she sell her current apartment and then look for a new place, but that was too disruptive for her.
SnowBog
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Re: Maxifi

Post by SnowBog »

cbeck wrote: Mon Dec 06, 2021 6:08 pm Welcome to the bizarro world of the cooperative apartment market in New York City.
Wow! Reminds me to be grateful for my own slice of crazy, as you never know what others are dealing with!
Nahtanoj
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Re: Maxifi

Post by Nahtanoj »

Gandolf wrote: Thu Dec 02, 2021 9:49 am I do not have any experience with this particular retirement planner, but it sounds very similar to the www.NewRetirement.com online planner.

Anyone have experience with both who might be able to comment on a comparison of the two?
I have used both but have gravitated more to Maxifi over the last few years. New Retirement generally provides projections in nominal dollars, rather than "real" dollars (i.e. in dollars that lose value over time with inflation rather than dollars with a constant value). For me, the use of nominal dollars for money projected far in the future is non-intuitive and confusing, because it is very hard to look at a projected dollar value from some future year and get a quick idea of what that means in today's dollars. (I mean, is $153,000 twenty seven years from now a lot or a little, when inflation is assumed at x% per year from now until then?) Maxifi, on the other hand, gives you projections in "real" dollars, which is much more intuitive.
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TimeRunner
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Re: Maxifi

Post by TimeRunner »

I was also an ESPlanner and am now a MaxiFi user. It's not software you will run weekly, and if you are a budget-focused person, this is not a budget tool. It's focused on smoothing and maximizing discretionary spending (the money leftover after your fixed expenses) over your lifetime or over that of you and your spouse. I might run a model every three months or so, and then run a series of comparison models over a focused time of a couple of days when there's a situation change or something I'm trying to model. For example, when my DW decided she really did want to retire in three months, that change focused my attention to a bunch of model runs.

The company typically offers an educational webinar every month or so, and I've attended most of them. Sometimes I only learn one or two new things, but they are a nice review if you do know the material and that also provides additional confidence that you're on track.

The ability to run comparison models and then adopt a given change into your base plan is very nice.

To answer a question upthread, yes, you can set an Annual Living Standard Index where, for example, you start year one at 100%, maybe kick it up to 110% during your early retirement years, throttle back in elderly years, and kick the last couple of years up high for anticipated high medical expenses prior to death. Your choice year-by-year.

I would say one downside is that the company is pretty small so when they say they are working on such and such a feature (for example, being able to set the year to NEXT year prior to next year to model next year while still in this year), it might not show up for a year or more. They could do a lot more development if they were just a little bit larger. Let's hope they get there.
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maulermark
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Re: Maxifi

Post by maulermark »

I've been using MaxiFi for a while now and TimeRunner's review is spot on.

It takes a while to tweak things to get them tuned for your situation. The discretionary spending idea is interesting and depending upon what knobs you tweak can give some interesting results.

For instance, initially the base report showed us with around $15K of discretionary spending (the number left to live on after all mandatory living expenses are paid) for the first 5 or so years after I retired, but jumped dramatically when my wife and I started SS and my pension kicked in. That $15K is not near enough in our neck of the woods in HCOL California. Even though I over-weighted the first 6 years of standard of living in retirement our discretionary spending didn't rise enough until I configured a "Maximum Indebtedness" number which helped to smooth out the numbers when we were cash constrained early in retirement.

I like the ability to show the year-at-a-glance view in the report. If you want to see your numbers at each age in the process, you can do that. I will probably renew when my license expires in February 2022 as I'm still working and fiddling with the numbers until retiring at the end of 2022.
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