As a financial advisor, you know that taxes in retirement are one of your clients’ top stressors. Offering planning services that optimize your client’s tax situation is an excellent way to highlight your expertise — and it makes a compelling selling point for potential clients who are concerned about navigating the tax aspects of their retirement income planning. 

Many financial advisors focus primarily on investment strategies. However, providing tax-efficient retirement income plans helps differentiate you from the competition. Covisum’s Tax Clarity® retirement income planning software makes it easy for you to be the expert your clients and prospects are looking for. 

Tax Clarity enables advisors to offer guidance to clients on tax-advantaged investments and tax-deductible retirement account contributions. It also helps you to develop tax-efficient strategies for managing your clients’ taxes on Social Security benefits, pensions, and retirement savings accounts.

Let’s take a closer look at how Tax Clarity adds value to your practice as part of your comprehensive retirement income planning services.


How Tax Clarity  Helps Financial Advisors Guide Clients 

Tax Clarity helps financial advisors identify opportunities for clients to minimize their taxes and make informed decisions. It provides easy-to-understand visuals and information about tax rates and potential pitfalls, allowing advisors to recommend their clients take advantage of tax-saving opportunities and avoid unnecessary expenses. 

The Tax Map feature helps advisors locate income tipping points and identify opportunities to use specific tax strategies. The Tax Map feature creates additional value by pinpointing opportunities to take advantage of tax strategies, such as Roth conversions, and comparing the tax impacts of different factors, including self-employment, the pass-through income deduction (and its phase-out), and the saver's credit.

Tax Clarity showcases your expertise with easy-to-understand visuals that many advisors use on-screen to help clients make educated decisions about Roth conversion opportunities and avoid potential traps like entering a new tax bracket, triggering Social Security tax, or creating unnecessary Medicare expenses.  


Using Tax Clarity with Other Covisum Solutions Expands Your Retirement Expertise Even Further

Although Tax Clarity is a powerful stand-alone tool for retirement tax planning, advisors can increase the value they provide both to clients and their practice when they subscribe to the full suite of Covisum solutions.

For example, Income InSight® helps you address retirees’ top concerns, such as high inflation, with its unique inflation stress test.

Additionally, the new Roth conversion features in Income InSight help simplify complex retirement tax strategies in several key ways:

  • Show the impact in dollars of adding a Roth conversion to your client’s plan.  
  • Create a multiyear Tax Map to show clients which tax brackets they will be in throughout their entire retirement.
  • Generate easy-to-understand charts to help clients review their cash flows and see the tax generated by a Roth conversion and the tax paid on the conversion.

Other new Income InSight features provide advisors with automated guidance to help them navigate the complexities of effective marginal tax rates. 


For example, for clients with an effective marginal tax rate above the harvesting threshold, Income InSight will automatically convert a small amount at the higher tax rate, then switch to the lower tax rate if possible. For clients with an effective marginal tax rate less than the conversion threshold, Income InSight will illustrate the conversion when there is no nonqualified account to pay tax from.


Looking Ahead to 2023

As we begin the new year, there are many concerns in the retirement income planning industry, with high inflation and an uncertain economy at the forefront.  

Covisum is dedicated to helping financial planners like yourself navigate the challenges that come with the profession. We offer software tools to aid in creating comprehensive retirement plans for clients and assist in communicating the importance of the advice you provide. Additionally, our customer support team is comprised of knowledgeable professionals who will help you throughout the process, offering assistance and direction as you prove your worth to clients and expand your business.

We are looking ahead to several exciting developments in the new year, including welcoming our Fortune 500 clients and helping their customers create better retirement outcomes. We are also deploying new updates to the Covisum software suite to give financial advisors more control over client retirement income withdrawal strategies. 


Are you ready to set yourself up for success? Download “The Financial Advisor’s Guide to Taxes” to explore how various retirement tax strategies can affect retirement income and pass your expertise to your clients.

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