New onto the scene of technology-assisted money management is LINK by Prudential. Prudential is not some fly-by-night start up after your money (or data), and in fact has been around for 140 years! Thus, I think it’s good to check out their version of a modern day digitally-enabled financial advisor. (By the way, this post is sponsored. However, ALL opinions are the genuine impressions of the GYFG team, offered for your benefit…and ours!)
This post was written by Lin, as a LateFIRE contribution. LINK is the type of tool that is especially attractive to someone “late” to the game of FI. Because LINK allows you to set the goals and input the date, it generates potential solutions, allowing for “toggling” to drill down on goals and profile information for accuracy and changes as you see fit.
Take it away, Lin!
Hi! A tool that lets me see how close to – or far from – I am to hitting financial goals such as a sufficient emergency fund? Appropriate insurance coverage? Adequate retirement savings? That allows me to go back and change input data and immediately see changed “solutions” that reflect changed input? Cute icons like a red pig (as in piggy bank) for emergency savings account?
I agreed to evaluate LINK by Prudential because in my newly woke state I am always looking for a better way to gauge our financial situation and see where we are. “What gets measured gets improved” as they (meaning Peter Drucker) say.
Let me begin by saying that if it is technically challenging, it ain’t gonna work for me. Excel? Not even. So, if you are like most people in the FIRE arena, you are light years ahead of me in that realm, savvy? That means that the LINK platform is about to get a couple of different grades here, ease in usability being foremost. If I can’t figure it out, it doesn’t really matter how intelligent the advice it wants to dole out. Kind of like vitamins in an unopened bottle – good for me but doing no good because I can’t get at them.
Step One in LINK by Prudential: input profile data. This includes age, income and savings, home location, insurance, and most important – Goals, covering the biggies: Emergency, Family Protection (insurance) and Retirement. You can add Goals that are independent of these three categories (for example, wedding, college education for kids, home to be purchased), but for the set up, I stuck to these three.
The overview is that you will be creating a 3-part vehicle, which is comprised of Profile, Timeline, and Solutions. In that middle portion – Timeline – LINK converts Goals to numbers and points out Gaps, and creates a simulated outcome representing how much of each goal I may achieve, based on numbers and current behaviors (as in savings) I have input. In Solutions, it creates proposals for each goal and gap.
I created a “household” Profile snapshot, versus one for me alone, as our business funds our life, and I do not take a paycheck from it, as such. Remember, though, that I could go back and change anything in the Profile if my situation changed, which would change the solutions, too.
The profile I created was:
- Household earnings after taxes: $100,000
- Monthly expenses: $6,000
- I want to retire by 70 and I am 56.
- I want a 3-month emergency fund.
- I’d like to retire “modestly” in Las Vegas, NV (other choices: comfortable, upscale).
- My life expectancy is 90.
So far, LINK by Prudential is easy and fun to use: A+! Onto the “Timeline” wherein I am shown how close or far I am from these goals, with the personal data I input, plus describing what we are doing now.
Turns out things are not looking so great. LINK says I am underinsured, underfunded for an emergency, and underfunded for retiring in the manner and by the time I desire. In fact, according to LINK, I only have 50% of the emergency fund I said I needed, 88% of the protection my family needs, and, as things currently stand, I am may only have 20% of what I need for retirement.
Cuteness of red pig icon notwithstanding, I am going to take a bit of an issue here with LINK. First of all, under “Family Protection,” there is no category to input vitally important disability or long-term care insurance. We have both in place. Plus, I think we are actually overinsured by some standards, due to a permanent policy begun decades ago years that we have left in place since it is almost paid off. Also, in case of “Emergency,” we have plenty of headroom on our credit cards to cover us, so the straight cash saved doesn’t tell the whole picture (we have about 1.5 months in cash). Retirement…ok. Besides not being able to add “income during retirement,” you got me there, LINK. You got me BIG.
I do like seeing this is a simplified manner, clear as a bell, even if I quibble the details.
Note: originally, I chose to “retire” in a “comfortable” manner where we live now in California (high cost of living, state income tax), and our retirement needs were almost a third higher until I downshifted to “modest,” moved us to Las Vegas, and LINK estimated our housing costs.
Onto Solutions. Those are found in the Solutions Center page of LINK, personalized for me. Each solution proposed takes into consideration the “risk willingness” established by my answers to questions LINK has asked me.
Note: my answers first placed me at “low risk willingness,” but evidently bipolar, because I would “stay the course (and possibly invest more) if my portfolio experienced significant losses,” although I also do not want to lose anything! Nuance? Maybe it’s just me:
I changed a couple of values and I came out “medium” (so typical for a middle child) and LINK removed the bipolar warning label. I like being able to make changes.
My emergency and retirement shortfalls elicited different solutions from LINK, with different annual costs to me.
In addition to their proposals, LINK also offered me a call with a Prudential advisor, especially for the insurance needs.
Overall, I will say that LINK was very easy to set up and use. It is an attractive, free platform. It would be great for someone wanting to tweak a going plan, willing to consider a jump to an advisor and to look at Prudential’s managed options. Also, for someone at the beginning of a long FI journey, LINK is another complementary platform to get diverse accounts (only Prudential accounts, however) in line and pointed in the same direction, to be used in conjunction with self-education and an overall net worth tracker. Once registered, a user has access to a lot of educational material generated by Prudential as well.
Even for LateFIRE people such as myself, I like the idea of such an easy and visually pleasing platform that is customizable and dynamic enough to change with me as I take some drastic steps to cure a pretty ungreat situation. Anything that puts reality front and center is worth incorporating. Without a (justified by my situ, IMO) flashing red screen, LINK makes it pretty clear that there is a serious gap between goals and probable outcome for me, unless I take big and immediate action.
However, as we already know that LateFIRE is way WAY underfunded for retirement – hence the “LateFIRE, LateFIRE, hair on fire” dance being played out way too many 2am’s around these parts – more is needed than the solutions proposed, and definitely without the fees attached to both the emergency fund and retirement proposals. I can see myself using LINK, but not jumping into any of the Solutions proposed.
But that’s on the Proposal element. Except for the aforementioned quibbles (and an annoyingly short timed automatic log out feature), LINK as a tool is rather fun. It’s way more fun than Excel.
I do very much like the iterative feature of being able to affect all outcomes immediately by changing input. For example, switching our retirement locale and lifestyle drastically changed funds needed. Similarly, especially if I were younger, moving the retirement date out would also have a huge effect on funds needed. Raising or lowering current household expenses is powerful, as we know, which affects savings rate possible, which affects everything. In and of itself, that makes LINK by Prudential dynamically able to prove many FI concepts with a simple click and change in numbers.
Sidebar: our current commissioned “financial advisor” (leftover, along with several accounts from pre-woke days more than 25 years back) told us at our last meeting of a new service being offered by her firm: $3000 gets you set up by employees there in a – wait for it – digital financial management tool so that you can track all your accounts virtually. She doesn’t work for Prudential, so I guess she hasn’t heard of LINK, cause it’s free, y’all. Man, I wish I could time travel and go back and take my 30-year-old self aside…
Personal Capital allows you to aggregate your entire financial life into one account. All you need to do to see all your accounts in one place is log in to Personal Capital and voila! But it doesn’t stop there. They even automatically classify all your income and expenses for you. You get a FREE and fully AUTOMATED tracking system!