I had thought that financial planning software was strictly the purview of the professional financial planning community and that tools geared towards everyday consumers would be either too limited, too complex, or too expensive. Boy, was I wrong!
I do need to add
that these tools do not replace personalized financial advice. Tax, estate, and
corporate planning complexities may require professional input and can help
avoid the “narrow focus” bias common in DIY planning.
So, here is a
rundown on a bunch of tools I found. If
you’re looking for a place to start, and just want to explore, start with the
free tools. If you are serious about
building a detailed and comprehensive financial plan on your own, jump straight
to one of the pay-for-use tools.
Government of Canada Tools and Information
TIP: It’s now quite easy to sign into your CRA and My service Canada accounts thanks to the use of sign-in partners which include all the major banks and a number of other financial institutions.
My CRA (Canada Revenue Agency) Account
https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services.html
Canada’s revenue agency provides online information on your tax returns, mail, and correspondence, and most importantly for the purposes of this article, your available contribution room and regarding your RRSP, TFSA, HBP (Home Buyer’s Plan) and FHSA (First Home Savings Account).
If you plan to use DIY financial planning tools or consult with a financial planner, you will want to have your contribution limits for RRSP, TFSA, and information from the HBP/FHSA (if applicable).
My Service Canada Account
https://www.canada.ca/en/employment-social-development/services/my-account.html
For financial and
retirement planning, your My Service Canada account provides access to your CPP
details including a CPP estimate plus your CPP contribution history.
If you plan to use
other tools like the DIY financial planning tools or consult a financial
planner, you will likely be asked for the CPP information contained in your My
Service Canada account.
Just one note about
the CPP estimate: The numbers provided
assume you will contribute to CPP to either the age of the estimate or to age
65, whichever comes first. This may
overstate CPP benefits for early retirees.
For example, let’s say you plan to retire at age 60 and take your CPP at
age 65. The calculator for the age 65
amount assumes you will make contributions from age 60 to 65 even though you
plan to retire and possibly have five “drop out” years. If you fall into this situation, you should
consider using a more accurate CPP calculator tool such as the PWL CPP tool
mentioned later in this article (or ask your financial advisor to ensure they
have calculated your CPP accurately).
Government of Canada retirement Resource Page
https://www.canada.ca/en/services/retirement.html
This page provides a
lot of information for soon-to-be retirees and is a good starting point to make
sure you are aware of both general retirement considerations and also to obtain
specific information about government benefits like OAS, CPP and GIS.
There are some
decent tools and calculators including a budget planner, Income calculator
(it’s fairly simple but it only takes about five minutes to use and can give
you a rough idea of what to expect in income from various sources including
investment income, drawdowns, OAS and CPP).
It also includes an OAS estimator.
Free Financial Planning Tools
Frederick Vettese’s Personal Enhanced Retirement Calculator (PERC)
This free tool is
very easy to use and gives a very basic lifetime retirement income projection along
with tips and ideas for improving your retirement situation.
There is a more
powerful customized version of the tool that you can subscribe to for $150 per
year which I did not try and would compete with the Pay-for-use tools I note
below.
One investment I do
heartily recommend is purchasing Vettese’s book “Retirement Income for Life”
which is advertised on his web page and can be found for about $25 online. It’s a great and easy-to-read retirement
planning book.
PWL Capital Research
Planning Tools and Calculators
https://research-tools.pwlcapital.com/
PWL Capital is a
Canadian wealth management firm that has been around for quite a while. They are also well known for producing the
popular Rational reminder podcast and for following evidence based investing
and financial planning guidance.
Recently, they have
added several very cool tools and calculators to their website including:
1. Risk Profile Self Assessment. I walked through this myself and thought it
was very good. The questions they ask
follow the latest thinking in financial behavior research to assess your risk tolerance
and risk capacity.
2. CPP Calculator. This is a detailed and very accurate CPP
calculator that considers inflation, wage growth, your past and estimated
future CPP contributions, and retirement age to calculate your expected CPP
payments.
3. Retirement Planning. A great free tool with good flexibility on
assumptions and investment returns and even some different withdrawal
strategies. However, it only works on a
per individual basis and not for couples, so it has limited use.
4. Rent vs Buy Calculator. Allows you to quickly plug in home purchase
vs rental assumptions (including handy defaults) to compare buying a home
versus renting. Reports show net worth,
cash flow and savings between the two options.
It assumes, of course, that any savings the renter realizes versus a
home purchase is invested and not spent.
MayRetire Retirement Planning Tool
According to the website, “MayRetire started as a personal project…What began as a tool for our own family has evolved into a platform trusted by thousands of Canadians to make confident, data-backed decisions about their future.”
I tried it out myself and thought it was an excellent tool – and quick and easy to learn and use. It includes modeling for both individuals and couples and includes lots of flexibility in your settings and assumptions. This includes:
- Lots of asset types including RRSP,
TFSA, Non-Registered and even Corporate Accounts and Rental Properties plus
other income streams like Defined Benefit Pensions, employment income,
annuities, and one-time events like
inheritances.
- Different Withdrawal Strategies with
the ability to compare them. This includes things like RRSP Meltdowns,
marginal tax rate management, and Pension Splitting.
- Plan stress testing. You can use Monte Carlo simulations and
historical back tests to check on plan resiliency and success rate.
- Flexible Spending Rules. It’s easy to model the Go Go/Slow Go/No Go
stages along with one-time expenses (like a car purchase or home repairs).
- Uses FP Canada Guidelines and
assumptions as a reference framework for things like projected investment
returns, longevity, inflation and so on.
There are an incredible number of graphs and reports including detailed withdrawal and tax reports so you can see the impact different withdrawal strategies have on the plan.
Honestly, and given that it is currently offered free of charge, this is an impressive, powerful, and useful tool.
Pay-for-use Financial Planning Tools
adviice Retirement Planning
Launched in 2024, this is a full featured online financial planning tool priced at $9/month or $49/year and built specifically for Canadians.
While I have not tried out the product, I did watch several videos on YouTube to see the software in action and it does seem both powerful and flexible. I was particularly impressed by the AI capabilities. That is, the software can suggest specific strategies (listed in order of highest positive impact) allowing you to assess and act with one click,
adviice clearly has a higher learning curve than something like the MayRetire app, but that also means more flexibility and detailed scenario planning too. There are plenty of tutorial videos and help is available from adviice.
Based on several posts in reddit forums, adviice is well liked and known for its comprehensive and flexible suite of features and scenario/strategy building even if the learning curve is a little steep and the data entry a little clunky. Nonetheless, users praise it for its power at a low price point.
Optiml
Also launched in 2024, this is a full featured online financial planning tool built specifically for Canadians. Pricing starts at $9.95/month for the “Essentials”, $24.99/month for “Pro+”, and $49.99/month for “legacy” with escalating functions and options at each level. They do also offer a free 14-day trial.
I have not tried the software myself, but I did watch several videos posted to YouTube to get a feel for the software. It looked quite comprehensive and the dashboard capabilities were outstanding with almost too-dizzying array of graphs and reports. I also liked the strategy/goal optimization tool which allows the user to evaluate various goals. For example, you can set a maximum (or minimum) legacy estate value to assess how much you can really spend in retirement.
Reddit reviewers praise Optiml’s ease of use, dashboard, and data entry capabilities.
MoneyReady App
The MoneyReady App is a detailed, Canadian-focused, financial planning tool designed for DIY investors. Reviewers like its "Time Machine" simulator, which forecasts cash flow, taxes, and retirement scenarios, though the interface requires a learning curve and significant data input to be effective.
There is a free trial option, a $60 extended trial option, and a first year subscription costing $160 with $110 yearly renewals thereafter. One cool thing is that they offer an “always free” option for low-income seniors.
Again, I have not tried it myself. There are several videos on YouTube that go into some detail on how the priorities feature and time machine works, but they offer few visual clues as to how the overall app works and what the user experience is so it is difficult to evaluate.
I have not tried the product myself but I did watch a 10-minute walkthrough video. I thought the data entry was simple and easy to understand but lacked some more complex entry that sophisticated users may be looking for.
One thing that may set Gilded apart is that it was geared to younger people with more scenarios for setting priorities and focusing on different saving strategies.
As one of the newer products launched in the last few years, I could find very few reviews and not a ton of information apart from the gilded plan website itself.
Summary
We are at an interesting turning
point in Canadian financial planning.
More Canadians are looking for financial planning help but are unwilling
to pay 1% or more of their assets per year to investment managers. Also, many Canadians have very modest
investment balances and paying for financial advice is a stretch they are not
yet willing to make.
It is refreshing, then, to have powerful financial planning tools available for free or for as little as $49/year. This is an exciting and empowering trend.
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