Answer These Essential Client Questions With eMoney Reports

Every client who has ever come into your office for financial advice did so because they have questions. Questions they feel ill-prepared for and that your expertise makes you uniquely qualified to answer. Even though every client is different, over time you begin to see trends.

Below we discuss five common questions your clients want answers to, and how to tackle them, once you’ve created the base case for your clients in eMoney. Keep reading or jump ahead using the links below.

• Are we on track for retirement?
• Will my family be okay if I pass away?
• Can I afford to put my kids through college?
• What happens if I become disabled?
• Will I be a burden to my kids in old age?

Are we on track for retirement?

“Are we on track for retirement?” is often the first question a client will ask. Fortunately, with your suite of retirement planning reports, you can prepare for client conversations and use these visual charts to help answer this question and more.

Let’s target a few retirement-related questions you may encounter and the accompanying reports that will satisfy your clients’ inquiries. To access a client’s retirement reports, go to Reports > All Reports > Retirement Planning. From here, you’ll see a drop-down menu of report options.

Will I need to reduce my expenses in retirement?

This may prompt you to walk your clients through how much they are spending versus what’s coming in to offset those expenses.

• Retirement Expenses Report helps clients understand how their living expenses, taxes, and other expenses add up each year and over the lifetime of their retirement. It provides an easy to understand, visual overview and break downs a client’s expected retirement expenses from their base facts or a scenario. Using this report, you can discuss potentially reducing retirement expenses, taxes, or liability payments to meet their goals.
• Retirement Income Report outlines income sources like Social Security, pension plans, annuitized annuities, and other income streams that will help to offset clients’ retirement expenses. It also includes any investment income and planned distributions taken from their retirement accounts and other assets.

Should I save more today to help reach my retirement goals?

You can touch on building retirement assets to show clients how the actions they take today impact their future retirement savings.

• Building Retirement Assets Report shows a detailed breakdown of existing portfolio assets, including planned savings and employer contributions for the current year. It also projects your clients savings and contributions from now until retirement, and shows estimated growth and total projected portfolio assets at retirement.

Note: A quick Advanced Plan showing the impact of increased savings or retirement plan contributions can show clients how saving a little more each month has a profound impact on their assets at retirement age.

How can I achieve my retirement goals?

Pull everything together with a complete summary of all the information you’ve reviewed so far while providing options for how to proceed with meeting your client’s goals.

• The Looking at Everything Report allows you to review all the retirement reports together, detailing how income and expenses break down over the entirety of their retirement. This report condenses what’s already presented in the Cash Flow report to focus solely on the impact of the plan in their retirement years.
• Options for Meeting Needs provides options for clients who haven’t reached that level of security on how to proceed. This report explains key steps your clients can take to bring their retirement under control. It presents three techniques to help meet the client’s desired retirement goals—saving more now, delaying retirement age, or reducing expenses to a manageable level.

There are many other methods and reports available in eMoney for answering that common client question, “Am I on track for retirement?” but the above reports are a great start. If you have a full financial picture in the client’s base case and can demonstrate a plan of action to present these key reports, you should provide your client with some clarity around this valuable topic.

Will my family be okay if I pass away?

This is a common question your clients may ask and hope to review to see how it could impact their financial plan. Address this question by utilizing a premature death What-if scenario and the Life Insurance set of eMoney reports.

Create a What-if

Before you begin presenting with Life Insurance reports, create a premature death What-if. To learn more, check out Planning for Unexpected Events with What-ifs. This post and webinar recording will walk you through where to access and edit your What-ifs and how to utilize them when presenting to clients.

Now you’re ready to apply the What-if to reports.

Let’s target some of the life insurance-related questions you may encounter and the accompanying reports that will satisfy your client’s inquiries. To access, go to Reports > All Reports > Life Insurance. Here, you’ll see a list of report options across the top of the reports page.

How would a premature death impact my family’s expenses? And how do those expenses compare to our assets?

Start by reviewing your client’s expenses and resources with the Survivor Costs and Costs vs. Resources reports. You can apply the premature death What-if to both reports.

• The Survivor Costs Report helps your clients understand the burden of everyday living expenses, ongoing liabilities, and other recurring costs that become the family’s responsibility. It provides a summary and detailed breakdown of these costs over the spouse’s remaining lifetime.
• The Costs vs. Resources Report expands on Survivor Costs by providing additional insight into how your client can use projected assets to cover the projected costs. Income sources can include anything from Social Security to existing insurance benefits.

Will I need additional life insurance?

Now that your client has a general understanding of the costs that could be incurred by the family if a death occurs, and resources available to offset those costs, it’s a good time to move on to the Gap Analysis report.

• The Life Insurance Gap Analysis Report analyzes the costs incurred by the surviving spouse and the resources available, and calculates the additional life insurance need required. When using the Gap Analysis report there are a number of required intra-report settings needed to determine an accurate additional life insurance need. This report allows you to specify within the report itself whether you are solving for Asset Replacement or Remaining Assets.
  • Asset Replacement solves for additional life insurance required to replace all assets the decedent would have earned in his or her lifetime. You can also choose to solve for a defined level of Remaining Assets.
  • Remaining Assets solves for additional life insurance required to hit a desired asset level minimum at end of life for the surviving spouse.
  • With this report you can also specify the Realization Model and Reinvestment Growth rate of the collected insurance assets. Be sure to fine-tune these settings in order to solve for the appropriate amount of required insurance.

Finish up by showing your client how the additional insurance impacts their Costs vs. Resources.

• The Cost vs. Resources with Insurance Report revisits the analysis of Costs vs. Resources but includes the additional insurance showing them how it has a profound impact on their family’s ability to survive and thrive in the client’s absence.

While there are numerous other reports available for Life Insurance, these four will provide a solid base on which to build.

Can I afford to put my kids through college?

It’s important to have your education expenses clearly defined and funded in your client’s Fact Finder before attempting the use the Education Planning suite of reports to answer this question.

There are a few key settings within the education expenses to be aware of, including:

• The Dedicated Funding Sources Report, which is where you should attach 529s or accounts specifically dedicated to funding the child’s education. An If Dedicated Funding Is Exhausted setting exists on the Funding tab of the Education Expense and has two settings Fund the Expense Through Normal Cash Flow and Stop Funding the Expense. Typically when solving for savings needs, it’s best to select Stop Funding the Expense.
• Savings Rate for Solution Reports allows you to define the projected growth of additional savings used in the Education Planning reports.

Review these expense settings carefully, and once you have a strong base case for your education plan, move onto reports that will answer questions about education funding.

• The Cost of Education Report breaks down each child’s expenses individually, showing how each year of their education is fully or partially funded, as well as annual and total costs.
• The Funding Your Education Report continues to break out the education goals for each child individually, but focuses on the current status of funding, respective to each of the education funding needs. This report details the dedicated funds available, current funding, and visualizes the funds versus withdrawals. When a shortfall occurs, the amount of the shortfall and percentage underfunded are displayed. In addition, if you’ve allowed the expense to fund through normal cash flow, Non-Dedicated Withdrawals are also visualized.

Now that you’ve had the opportunity to review costs and funding if a shortfall has been identified, it’s the perfect time to explore potential solutions to any funding shortfalls in the Options for Meeting Needs report.

• The Options for Meeting Needs Report looks at the funding shortfall of the client’s education goal and provides solutions to close the funding gap. This report details how much more they need save each month, put aside in bulk now, or if necessary, what kind of reduction in costs would be required to meet their goal.

There are many additional reports that can break down the funding and spending details or analyze the cost of waiting to fund but these provide the foundation of any education planning report in eMoney.

What happens if I become disabled?

What happens if I experience a health event or a disability that results in being unable to work? This is a scenario your clients may ask to examine so they know how it could impact their financial plan.

Address this question by utilizing a Disability Occurs What-if scenario and the Disability Insurance set of eMoney reports.

Create a What-if

To generate the Disability Insurance reports you first need to create a Disability Occurs What-if scenario. Speak with your client about their primary injury concerns. Do they work in a dangerous environment? Are they adventurous on the weekend? Gather as much information as you can to fine-tune the additional expenses, duration, and other variables within the What-ifs health event.

How much will a disability cost?

Next, apply the What-if to the Survivor Costs and Costs vs. Resources reports and review your client’s expenses and resources with them.

The Cost of Disability Report breaks down exactly how much this disability health event will cost—not just in income lost in the current year but also over the client’s entire lifetime.

The Disability Wealth Effect Report shows the overall wealth lost. It demonstrates that the true costs of disability—beyond the lost income and extra medical costs—is the opportunity cost resulting from not having been able to invest and grow any of the money spent. This report drives home the real costs accrued over your client’s entire lifetime due to an injury.

Will I need additional disability insurance?

Once they understand the total costs, your next step is to fine-tune their desired level of coverage.

The Disability Gap Analysis Report reflects the cash flow gap created by a disability event and any potential insurance required to cover the solution. Be sure to set your desired level of assets remaining because the Disability Gap analysis report can easily show that a client needs no additional coverage when it’s only solving for them having greater than $0 in assets remaining at death.

Set the Assets Remaining field based on your client’s preference. You can solve for the same number of assets remaining as entered in their base case, essentially solving for asset replacement or aiming for a specific asset level.

With these three reports, you can encourage your clients to consider the financial risks of certain unexpected health events and start planning the proper insurance coverage.

Will I be a burden to my kids in old age?

Any Long-Term Care (LTC) planning should start by creating an LTC is Needed What-If scenario. Similar to disability, the LTC is Needed What-If creates a health event that takes place over a specific time period and creates a number of variables including an additional expense.

Note: Be sure to complete the Report Parameters in the What-If to use the Cost-Benefit of Long-Term Care Insurance report. The Long-Term Care Insurance reports look for this What-If scenario to be applied to solve any LTC insurance need.

If you have questions about LTC costs, the Cost and Payment Options report discusses costs based on the Genworth Financial Cost of Care Survey 2021.

Once you’re comfortable with your projected What-If scenario begin by discussing the Cost of Long-Term Care.

• The Cost of Long-Term Care Report looks at the scenario you’ve created and shows the total cost over the entire LTC duration. The report provides estimates on how costs will break down between LTC Costs and Total Expenses.
• The Long-Term Care Wealth Effect Report shows the true costs of LTC, taking into account, not just lost income and additional expenses, but the loss of possible investment on that money.
• The Long-Term Care Gap Analysis Report looks at the cash flow gap created by an LTC event. Often clients will be able to afford the LTC event and still have assets remaining. Some clients won’t have the necessary funds to cover an LTC event. With this report that you can show them how a small investment in LTC insurance coverage can spare their family thousands in expenses.

Finally, it’s possible that the same dollar invested in coverage could be better invested today. That’s where the Cost-Benefit of Long-Term Care Insurance report comes in.

• The Cost Benefit of Long-Term Care Report looks at the what-if scenario including the Report Parameters tab to demonstrate the cost-benefit value of a long-term care insurance policy. Are they better off investing in an LTC insurance policy or investing that money today? This report shows them—based on the annual premium of the insurance—just how much they would need to save and the annual rate of return required to provide the same total benefit.

Looking for more resources?

Check out the Reports interactive user guide to learn more about all of the available reports or sign up for our Intermediate Series webinar Diving Deeper with Reports.