Digital wealth management platform Personal Capital recently launched Retirement Paycheck, a tool to help clients make optimal, tax-efficient retirement account withdrawals. The tool allows retirees to see taxable, tax-deferred and tax-free accounts on one dashboard, get guidance on the optimal drawdown strategy across accounts every year, and plan for RMDs to help avoid penalities, according to the company.
The tool marks a deeper dive into retirement planning for the wealthtech firm, which already includes tools to help users monitor cash flow, analyze fees, make investing decisions and craft budgets. “How you withdraw money in retirement is just as important as how much you save,” said Amin Dabit, Personal Capital’s director of advisory services. “There is a lot of complexity about how retirees should pay themselves from taxable, tax-deferred and tax-free accounts.”
It’s a space that’s drawing increasing interest from financial service providers looking to leverage new technology, as investment management becomes table stakes for automated investing platforms. Last year, automated investing platform United Income, led by CEO and founder Matt Fellowes, former chief innovation officer at Morningstar, set up shop in the space. Although the firm’s $282 million in assets under management pale in comparison to the firepower at Personal Capital, with a listed $6.5 billion in AUM on its most recent filing, United Income focuses on money management for clients in or near retirement. Personal Capital has a range of offerings for a variety of consumers.
As end-users become more comfortable with technology and financial services get more sophisticated, advisors could see even more entrants to the space. For now, Personal Capital’s offering still has a human component: customers using Retirement Paycheck can receive a notification in their dashboard of certain opportunities, like Roth conversions or tax-gain harvesting, that might be best handled by a non-robotic financial advisor.