FY 2024, I used Boldin (then New Retirement). I liked it, but wanted something more robust. So, FY 2025, I went with Pralana. I set up everything carefully last January. I very much like it's projections, but I am finding that:
1). I feel like I am waiting for December to see how I did with my modeling last January. There is not much to do between January and December. This may be by design. I have run some different scenarios, which have been interesting. But, Pralana is not interactive like Boldin, or like Projection Lab, and interactivity keeps me engaged, focused, and thinking about what is happening.
2). I feel like Pralana is too esoteric for a person like me. I am knowledgeable and educated on finance, retirement planning, etc., but every time I read the user manual on something like Advance Portofolio Modeling or Correlated ROR's, I am lost. This combined with lack of graphical UE makes me not pay close attention as I did with Boldin (which I think was an inferior product, but I engaged it more).
So, I am thinking of Projection Labs for next year, in that it is the one I haven't tried. Costs among them all are pretty similar.
Advice sought: Does it make sense to try PJ for a year, knowing I can come back, or is missing even one year from Pralana analysis a problem?
Thanks!
TS
I think you've answered your own question. 🙂
@timsafford I've held the believe for a number of years as a Pralana user that it often felt like I was struggling with its complexity needlessly. Said another way. as far as retirement planning, I wanted to know if I was OK, how much I could safely spend, etc. Think of it like trying to land an airplane. Some are fine with just landing in north America, others want to land in the U.S., still others want to be sure and land in Indiana, while some want to make sure its Indianapolis and a few want to get to a specific airport. You get the idea. Pralana demands a lot from the user in order to get a lot out of it. That said, I'm not sure the majority of users need to find a specific airport. I too found myself struggling with its complexity for little return once my main questions were answered. That and the lack of a good interactive UI drove me to try Projection Lab which I find MUCH more engaging and easy to use (and I can update it as I wish, not wait a year as you mentioned). It answers all my necessary questions and even more without requiring a CPA or an IRS certification. Plus, when I kick the bucket my wife would give PL a try, whereas Pralana - no chance. In the past year I've gone into Pralana maybe once or twice; Projection Lab I update monthly and explore. There's the difference for me.
Not a slam on Pralana either - it's just much more tool than I need ("that's what she said...")
Pralana handles a lot more complicated situations, meaning you have to give it more information.
To me the issue that makes other programs useless and even dangerous is Roth Conversions when holding bonds/fixed income preferentially in tax deferred. That's the best location for those kind of investments (see the bogleheads.org wiki on the subject).
The other options fail at that and will give you wildly wrong answers that can cost you six figures in unnecessary taxes. The issue is they see the low returns in tax deferred (due to more bonds there) and the higher returns you assigned to Roth (due to more stocks there) and then they recommend overly rapid Roth Conversions to get those better returns. But the returns are primarily due to the asset allocation shift from bonds to stocks as the programs don't have the math to keep the asset allocation constant over time. Only Pralana's Advanced Portfolio Modeling - Mode 2 can handle this.
Screwing up your planning to the tune of a six figure loss might seem like enough dough to get people interested in learning. If not, I'm told by reliable sources that there are some 25+ advisors that use Pralana and I'm sure you could find one that would build the plan for you and then you would have a fully configured model that you could be confident in, plus get their professional advice on topics that be important that you might not even be aware of. Bill Hines and Sotiros Keros are a couple of advisor names I've heard, (click on the Forum tab and you'll see their names among names of just regular folks that are not advisors). Bill wrote a nice book on how to set things up in Pralana (Plan Your Money Path, sells for about $10 on Amazon), it's certainly worth the few bucks to buy it for the detailed Pralana tutorials alone.
As for Advanced Modeling being over your head, it ain't hard. Go to Advanced Portfolio Modeling, select Mode 2, select your overall asset allocation, then on the matrix of what goes where, I just put 100% stocks for taxable and Roth and 100% bonds for inherited and tax deferred. Then under account prioritization, I put them in the order of taxable, Roth, tax deferred and inherited. That's it. Now the program will maintain your overall asset allocation while holding bonds preferentially in tax deferred.
If you have a calculator handy, you can do the same quality mid-year updates the other programs are doing in a couple of minutes. For instance, when we've had a run up in excess of my assumed rate of return, I assume there will be no more growth during the year. So if I assumed 8% growth/yr and we've had more, I just divide the current market value by 1.08 and enter that as the start of year balance. The reason Pralana doesn't do it something like that is it overlooks the fact that you spent money, earned money, received dividends, maybe did a Roth Conversion, took an RMD, made a gift, etc. Since those other programs are happily overlooking all that and you don't seem to mind, then you could make equally rough assumptions in Pralana too.
@timsafford It seems pretty clear to me you should switch to Projection labs for a year; it has a much more intuitive interface. You sound almost guilty for thinking it. IMO Pralana is really only for a "niche" group who likes to get into the weeds with lots of knobs. I disagree with Rick that Pralana is really easy to use--what's trivial to a finance person like him with back-tracking the returns and so on is a huge burden to the average intelligent user.
If it is too "esoteric" by all means switch. I do share Rick's caution about making decisions about Roth conversions based on the other programs; but I also feel Pralana can give a false confidence given the large number of unknowns over 30 years. The other option is to pay for an advisor. For some reason people who spend for experts in things like home or auto repair are reluctant to hire an expert in finance when they lack the expertise.
I'm a big fan of using multiple tools, if only to double-check your conclusions based on any one of them.
That said, some decisions are fairly general and can be made on the basis of fairly coarse modeling, whereas others (and Roth conversions are a good example) really need to incorporate many interacting details to come to the best decision. Moreover, it's not always clear whether a given decision depends on the details or not. That's why, for me, it's critical that a tool has the capability of getting "in the weeds" when necessary, and I'm willing to cope with some increase in complexity as a result. I personally think Pralana strikes a good balance in this regard.
Actually, I'm not a finance person, no formal training or career crossover whatsoever. But I can do math and I realized that retirees face some really complex optimizations. Looking around it became clear that many of the tools on the market were shiny toys that can be deeply misleading, overlooking important aspects of the tax code or mixing the effects of multiple things into one juicy, delicious and very wrong answer. Discovering Pralana was a breath of fresh air - a tool that really tries to capture real world effects of different strategies and situations.
Complexity is relative. Things that you understand seem simple and things that you did not spend time to understand seem complex. Not everyone enjoys dealing with numbers. I have friends that prefer to have a consultant that they trust. They believe that the consultant is free (they save $89 a year on a tool), his recommendations are good enough for them, and they are very happy with his advice. They spend their free time on things they enjoy, and planning/investments for them are not fun.
Until twelve years ago, I did not pay attention to my finances. At that time, I met a friend that started asking questions regarding planning and investments. I started learning, opened a Roth account and paid attention to my IRA and 401K. The first lesson was the importance of planning. Think of all the time we spend in our life comparing one grocery item to another, one laptop to another, one vehicle to another, before making a purchase. And those are all small potatoes in the grand scheme of things. If we can spend a few hours with Pralana, it may correspond to tens/hundreds of thousands or even millions of dollars. That is a big return for the time invested. Stop thinking about whether to get the organic tomato in the store and spend more time on Pralana’s details.
@timsafford
1). I feel like I am waiting for December to see how I did with my modeling last January. There is not much to do between January and December. This may be by design. I have run some different scenarios, which have been interesting. But, Pralana is not interactive like Boldin, or like Projection Lab, and interactivity keeps me engaged, focused, and thinking about what is happening.
Maybe I am missing something, but I see no real value in the ability to update retirement planning software more frequent than annually. Stuart Richard have both pointed out the pitfalls of trying to do this. Can you give an example of what you are trying to update through the year that would change your plan?
2). I feel like Pralana is too esoteric for a person like me. I am knowledgeable and educated on finance, retirement planning, etc., but every time I read the user manual on something like Advance Portofolio Modeling or Correlated ROR's, I am lost.
The forum isa great resource for adding explanations and examples for anyone who may need more than what is in the manual so just ask your questions. I don’t see how those concepts would be any easier to understand in other software as many are universal concepts such as correlated returns.
I am not trying to convince you to use Pralana but I would think it would be harder to switch back and forth compared to sticking with one software and spend the time to learn it and not updated more than on an annual basis. Good luck with your decision.
I too am deciding on Pralana (or not) for next year. I have used both Maxify and Boldin in the past, and Pralana is the most powerful. The issue for me is that the detail needed to make sound decisions (especially Roth conversion decisions) isn't handled by Pralana either. For example, I have a great deal of my savings in a governmental 457b plan, making those funds available without penalty to me now, even though I'm younger than 59. Pralana's modeling doesn't accurately reflect options available to me. I also have to hack around my IBonds and their unique tax implications. I also have eMoney access via PlanVision, and I plan to keep that because it provides a trusted human when the rare need arises. Empower provides a second window of visibility. So, if Pralana isn't complex enough for my situation, I'd simply rely on the broader brush strokes provided by eMoney and Empower, with the tax/Roth advice from PlanVision. Their Roth conversion approach is year-by-year, and I'm valuing ACA subsidies more at this point anyway. Still deciding, though. I do like Pralana overall. I wish it represented my situation better. I know some updates are coming, so we'll see if those two big things (457b and IBonds) are handled better by my renewal in Jan.
I know that Charlie is working on a module for handling bond ladders, hopefully including TIPS and iBonds. It would help move that up the work list if you request it and describe exactly what you're looking for.
Is the issue about the 457B that Pralana is trying to assess penalties? That may be something that they could add a checkbox for whether early withdrawal penalties should be assessed if you request the feature.
Right now, the only way to make a penalty free early withdrawal looks like on the Scheduled Withdrawal Table, there is an option for withdrawing from IRAs where you can specify No Penalties. That would be very clunky to use to balance income or do Roth Conversion studies though as it is so manual.
@ricke Yes, the penalty is a part of it -- but I'd like to see the Roth Conversion and Optimize Withdrawal Priorities fully take into account the unique early-retirement friendly features of a governmental 457b. There is a proposed feature out there mentioning deferred compensation plans, but there's a huge difference between the governmental and non-gov flavors. It's hard to tell what's intended by this feature request. Specifically, I'd like to explore if spending from a traditional 457b early in retirement accomplishes the same late-life RMD/tax benefits of Roth Conversions (or close enough)--and how this all interplays with ACA subsidies. Currently, I have to use custom spreadsheets. I'm not disgruntled with Pralana in any way, but the usefulness is limited in my case.
Why not have both? A while back our broker provided a free comprehensive financial plan. It mirrored the PRC results. It had all of the bells, whistles and shiny objects that would entice. We had it done to confirm that PRC was leading us down the right path.
- @turk182 My thoughts exactly! I've paid for a year of both Pralana and Projection Lab (eliminated Bolden up front). Given the amount of money that's at stake here, it was easy to justify the expense. I'm learning from both, but I figure I'll pick just one to continue with in my second year.
The OP should definitely try PL to see if it's a better fit. From a psychological perspective, we're influenced by the gamification of everything. When I work with clients and show them the "good news" from Pralana, of course it's exciting. It's an endorphin rush, it feels good, hence I can see folks wanting to come back, spend time there, from subliminal craving for that rush, especially in times where everything else feels stressful.
Then they get there, find there's really nothing to interact with, and start to develop adverse feelings for the tool, the lover that's let them down. Folks, this is a long term planning tool. You do the work up front, then basically follow the roadmap it gives you. That's the beauty of it. Spend your time doing other things, enjoy your life until it's December/January housekeeping time. My suggestion is to use a complimentary tool like Simplifi or Personal Capital that allows you to more closely monitor your spending trends month by month (make sure it's on track with what you told Pralana!), your investment performance, watch that net worth grow, etc.
I think that's the missing link here. Huge benefit in using that cash flow/investing tracking tool that provides real data you can use to tune up Pralana and make sure it's dealing with reality.
