first look at version 2.16.2

Hi NYCGuy,

First, many thanks for your entry and your ongoing support. This is a labor of love, not profit, and we need all the help we can get with word of mouth.

Let me respond to each of your points below in caps.

best, Larry

1. Whenever a new version comes out I rerun my existing scenarios. The consumption recommendations always go down in the new version. I will have to go over every number to reconcile it. I see that my SS benefit, which starts at age 70, has gone down by almost 10%. I didn't see any reference to a change in SS calculation in the release notes.

WE ARE EXTREMELY ANAL WHEN IT COMES TO TAXES AND SOCIAL SECURITY CALCULATIONS. THAT DOESN'T MEAN WE DON'T MAKE MISTAKES. BUT WE DO WORK VERY HARD TO FOLLOW THE RULES VERY PRECISELY. WHEN IT COMES TO TAXES, WE LINE UP OUR CODE FOR FEDERAL AND STATE INCOME TAXES LINE FOR LINE WITH THE FORMS AND WORKSHEETS. THERE ARE, NEEDLESS TO SAY, LOTS OF WORKSHEETS. WITH RESPECT TO SOCIAL SECURITY BENEFITS, WE CHECK OUR CODE BY COMPARING RESULTS WITH THE CALCULATOR ON SOCIAL SECURITY'S WEBSITE (FOR THOSE ALREADY RETIRED. FOR THOSE NOT YET RETIRED, SOCIAL SECURITY IS LOW-BALLING THE BENEFIT ESTIMATE BY ASSUMING ZERO FUTURE ECONOMY-WIDE REAL WAGE GROWTH.) WE ARE WITHIN THE DOLLAR ON THIS CHECK OF SOCIAL SECURITY BENEFITS.

WE ARE ALSO UPDATING ALL THE PROVISIONS IN SOCIAL SECURITY. SO IT MAY BE THAT YOUR BENEFIT IS LOWER DUE TO NEW PROVISIONS THAT WE'VE INCLUDED IN THE PROGRAM SINCE THE LAST UPDATE. I WANT TO DISCUSS WITH YOU ON THE PHONE THE DETAILS OF YOUR SOCIAL SECURITY INPUTS AND THEN TALK TO DICK MUNROE ABOUT WHAT CHANGES WE MADE THAT MAY HAVE LED OUR ESTIMATE OF YOUR BENEFITS TO DECLINE BY 10 PERCENT. MY CELL IS 617 834-2148. I CAN'T THINK OF ANY GENERAL REASON WHY THE BENEFIT ESTIMATE WENT DOWN. WE DIDN'T FIND AND FIX ANY MAJOR SOCIAL SECURITY BENEFIT BUG IN THIS UPDATE.

2. I see that you provided more explicit choices on when to take the various SS benefits. This is not better; it's worse. In the last version ESP automatically calculated widow's benefits for my wife, a benefit of which I was not previously aware. Now, it will only report that if I know enough to set her widow's benefit to start when I die. That means a loss of valuable functionality for the user of the new version. Why not at least make the default start date of widow's benefits to be the death date of spouse, effectively preserving the functionality of the prior version?

I AGREE THAT MORE CAN BE LESS IN SOME CIRCUMSTANCES AND IT'S A DELICATE BALANCE BETWEEN GIVING USERS ENOUGH CONTROL TO LEARN THE RIGHT ANSWERS AND CONFUSING THEM ABOUT THEIR OPTIONS. IN THIS UPDATE WE ASK USERS TO SEPARATELY SPECIFY DATES OF COLLECTING RETIREMENT, SPOUSAL, AND WIDOWS BENEFITS. THIS TURNS OUT TO BE VERY IMPORTANT. ONE OF THE TWO SPOUSES CAN, FOR EXAMPLE, COLLECT FREE SPOUSAL BENEFITS AFTER BOTH SPOUSES REACH FULL RETIREMENT AGE. BUT WE CAN'T SAY IN ADVANCE (I.E., IN GENERAL) WHICH ONE IT SHOULD BE. SO SPOUSES NEED TO BE ABLE TO TRY ALL OPTIONS.

RE YOUR WIFE'S POTENTIAL WIDOW'S BENEFIT, SHE MAY BE A HIGH EARNER, IN WHICH CASE TAKING HER BENEFITS AT A YOUNG AGE AND THEN SWITCHING TO HER OWN RETIREMENT BENEFIT AT, SAY, AGE 70 MAY BE BEST. BUT IF SHE'S A LOW EARNER, IT MAY BE BEST FOR HER TO WAIT TO FULL RETIREMENT AGE, SO HER WIDOW'S BENEFIT IS NOT REDUCED, BEFORE SHE STARTS COLLECTING. WE CAN'T SAY IN ADVANCE WHICH IS BEST. IF WE DON'T LET YOU TRY DIFFERENT OPTIONS, YOU WON'T BE ABLE TO FIGURE THIS OUT EITHER AND COULD MAKE A VERY EXPENSIVE MISTAKE IN THE CHOICE OF WHEN TO START COLLECTING.

WE ARE GOING TO CONSIDER PROVIDING SOME SUGGESTIONS ABOUT WHAT AGES TO TRY WRT BENEFITS COLLECTION DATES -- HOPEFULLY IN THE NEXT UPDATE. WE'VE BEEN WORKING ON A SOCIAL SECURITY OPTIMIZER.

3. I think you guys need a marketing manager. To have added functionality to do conventional planning at a time when ESP could have offered the only tool on the market to optimize Roth conversions seems, well, ill-advised. On every financial form on the internet the discussions are when and how much to convert. No one knows. It depends on the user's specifics making rules of thumb even more useless than usual.

There is no tool out there to optimize Roth conversions and ESP already has all the necessary information to do the job. I have been using the two-pass method, but it is hard to present that to the average, non-technical user as a useable tool.

Building a conventional planner is a complete waste of your time. You should drop what you are doing and tackle the Roth problem.

I SEE YOUR POINT ABOUT AUTOMATING THE ROTH CONVERSION OPTION. I'LL TALK TO DICK ABOUT IT. BUT "OPTIMIZING" ROTH CONVERSIONS IS A MUCH TRICKIER ISSUE. AGAIN, WE MAY BE ABLE TO PROVIDE SUGGESTIONS, BUT AS WITH SOCIAL SECURITY COLLECTION DATES, THE ISSUE OF BORROWING CONSTRAINTS ARISES. IF A HOUSEHOLD HAS THE CASH TO WAIT TO COLLECT SOCIAL SECURITY, THERE WILL BE NO IMMEDIATE LIVING STANDARD DECLINE IN WAITING. IF THE HOUSEHOLD DOESN'T, THERE WILL BE AND THEN IT'S NOT CLEAR WHAT'S "OPTIMAL." IT'S UP TO THE USER TO CHOOSE. SAME STORY RE ROTH CONVERSIONS. IF THERE ARE LOTS OF REGULAR ASSETS TO PAY THE EXTRA TAXES, IT'S ONE THING. IF THERE AR NOT, THEN CONVERTING MAY COME AT THE COST OF AN IMMEDIATE LIVING STANDARD DECLINE. SO YOU SEE THE PROBLEM.

ONCE AGAIN, THANKS FOR YOUR SUPPORT AND GUIDANCE AND LOOKING FORWARD TO TALKING ON THE PHONE. LARRY