Not long ago, ATMs and home computers were all the rage in the personal finance world. Today, all the comforts of the past remain, but innovative technology is changing the way people transact across the globe. The younger generation is quick to adopt new technologies because they flock to whatever tools make their lives easier. Older people are less likely to change their ways, but should take note of technology trends, especially for money management. Using modern technologies to manage finances can save time, money and fit better into an active lifestyle.
Here are five ways you can embrace technology to help manage your retirement money.
[Read: 5 Technologies Older Americans Have Embraced.]
1. Online budgeting software. Online budgeting tools securely import your bank and credit card transactions and empower you to set up budgets and track spending automatically down to the penny each month. These products can help identify excess spending and opportunities to save more.
The most established and popular of these programs is Mint. Mint has an array of capabilities including net worth calculation, bill payment, goal setting and budgeting. You can access Mint through a computer, smartphone app and even the Apple Watch. Though free, Mint makes money by recommending financial services to help you save and invest your money.
EveryDollar is the online budgeting software created by Dave Ramsey and his financial media powerhouse. The name EveryDollar comes from Ramsey’s saying that every dollar should have a purpose. The free version allows anybody to create a budget online. There’s a paid version called Every Dollar Plus for $99 that automatically imports your banking transaction data. Ramsey’s famous debt payoff strategies are built-in for added motivation.
You Need a Budget is another online-based software that helps you budget your money and get out of debt. You start by setting up a monthly budget, and then connect to your checking and credit card spending accounts to compare transactions against your monthly budget. YNAB has a free trial and costs $50 annually for the service.
All three of these services are thoughtfully designed with a modern feel and easy-to-access smartphone applications.
2. Robo advisors. Those who are unsure how to manage their retirement money on their own should consult a financial advisor. Traditional advisors offer one-on-one guidance and allocate your money based on a set of recommendations. However, a new breed of advisors has risen to popularity.
Robo advisors take the emotion out of financial planning by using algorithms to build your asset allocations based on your personal situation. Instead of manually managing your money, robo advisors do it automatically. The advantages are that fees are much lower and investment decisions are done by a computer instead of a human, eliminating bias and emotionally driven mistakes. Robo advisors haven’t been fully tested in dramatic economic downturns or heavy market volatility, but plenty of investors have entrusted their money with robots instead of financial consultants.
Two of the larger robo advisors are Betterment and Wealthfront. These services use algorithms to build your portfolio based on your investment objectives and life stage. They rebalance often to take advantage of tax loss harvesting and aim to lower both your fees and risk. Robo advisors typically charge a percentage-based fee varying by the provider and pricing plan.
[Read: 6 Social Security Calculators That Can Help You Decide When to Claim.]
3. Online retirement calculators. The classic all-inclusive retirement calculator is a spreadsheet. Expensive spreadsheet software is no longer required now that Google Sheets is provided for free online. A comprehensive retirement planning spreadsheet takes some time and knowledge to customize for your needs. If you aren’t up for the task, free online calculators make the calculations for you.
One popular tool is Personal Capital. Personal Capital is a free online service that aggregates all your financial accounts using secure connections. It then calculates your net worth and analyzes your investment performance and allocations. Among the many features is a retirement planner that tells you if you have enough money to retire and how to save more, and a retirement fee analyzer that calculates the loss of investment growth due to management costs. The software service is free, but the company also has advisers to provide more traditional investment advisement services for which a fee is charged.
Another powerful and free online tool is NewRetirement. NewRetirement takes your detailed financial information, such as income, expenses, investments and desired retirement age, and funnels it into a comprehensive analysis. The tool helps to project your future spending needs and identifies risks in your overall plan. It determines how much you need to retire and when you might run out of money and provides graphical visualizations to illustrate the numbers and timelines. This tool is less focused on investments and more geared toward people nearing or in retirement who need help seeing the big picture.
4. Online banking. One of the most accessible technologies for money management is online banking. Most banks offer this free service, and all your banking needs can be easily managed from your home computer. You can set up automated bill payments and make regular transfers between accounts to simplify your banking needs. Best of all, an online bank account makes balancing your check book easy because you’ll write fewer checks.
The larger national banks tend to have more modern platforms, making them more robust and easier to use. Security and encryption are important when dealing with online money management. Make sure your internet browsers, connection and firewall protection are secure and up to date before transacting online.
[Read: How Super Savers Max Out Their Retirement Accounts.]
5. Smartphones. One of our society’s most impactful technological advancements in the past decade is the smartphone. All your money management needs, including the tools mentioned above, are now as easily available on smartphones as on computers. Now you can manage, track and automate your finances from anywhere with a reliable and secure Wi-Fi or data connection. That means you can manage your money while traveling overseas or even from a hospital bed.
Many online tools have smartphone apps that make mobile access easier, and almost all websites are now optimized for use in a mobile browser. There’s no more need for a bulky desktop computer or laptop to manage your retirement money.
Younger people have embraced mobile technologies because they fit their on-the-go lifestyles. The explosion of ride-sharing, podcasts and gaming on mobile devices serve as proof. As older users become more comfortable with mobile and disruptive financial technologies, completing their monthly money management tasks will become less intrusive on their time.
Craig Stephens is a blogger at Retire Before Dad.
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5 Ways to Embrace Technology to Manage Your Retirement Money originally appeared on usnews.com
