Goals-based planning can seem complex, particularly when you have to make it up as you go along because you lack tools designed to make planning more efficient.

I developed R-MAP Planner because I couldn’t find tools that helped efficiently plan upside/floor/longevity/reserves allocations. There are plenty of tools for setting up allocations of stocks/bonds, but they all suffer from the same shortcoming—they’re based on one of several investment theories, not on the household balance sheet. Investment-first planning, not goals-first planning. That may work reliably for the over-funded, but can be dangerous for those who aren’t.

With R-MAP, I set up the future household cash flow as the goal and analyze the resulting household balance sheet to determine how best to manage household risk exposures with an allocation to upside/floor/longevity/reserves. Different household fundedness suggests different approaches so that floor can vary from an at-risk floor of bond funds as part of a more traditional balanced portfolio for the over-funded, to a separate upside portfolio and a dedicated floor of CDs or TIPS ladders for those more constrained. The tool has to be nimble enough to handle both and switch between them as a household shifts out of the accumulation phase and nears retirement.

R-MAP enables me to do goals-based planning as an efficient, repeatable process, creating a household Retirement Policy Statement, the goals-based version of an investment policy statement. Here is a Quick Start Guide that I put together to help jump-start anyone interested in doing goals-based planning and using the tool effectively for goals-based planning. It is included as part of the product download, but you can access it here to get a sense of how the tool works.

You can find out more about the Retirement Policy Statement and U/F/L/R allocations on the essentials page at the Retirement Income Industry Association website.