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I plan to retire in about 1.5 to 1.8 years from present. At that time, I will sell my existing home and relocate to a different state. (We can set aside, for the moment, the conventional wisdom about renting in a new location for a specific amount of time before purchasing something.)
If I were to sell my house today, after realtor commission, closing costs, and minor fix-up; it would not be unreasonable to walk away with $80,000. This amount will become the down payment for a house in my new local. In the new location, I can purchase a fairly new, small/modest tract house for about $180,000 and a really nice larger, but a bit older house in a more desirable neighborhood, (to me), for just south of $250,000. Those are in today's market. So, if I were to carry a mortgage, it would be between 100k and 170k, give or take. I qualify for, and have had in the past, Veterans Administration home loans. Since I'll be leaving CA, I can no longer have a CalVet loan.
Funny you should mention financial managers. I've had an outstanding appointment to see a fee-only financial planner since early February for this very afternoon! They called the other week to confirm and change the date due to an availability conflict. Got to talking with the lady and it turns out that this particular fee-only financial planner is not what I'm looking for.
I wanted to speak to someone who doesn't want to sell me anything and who has a fiduciary responsibility to me and my assets. I just wanted some questions answered to confirm I'm on the right path, or I'm getting off track and 'that' is a stupid idea. Turns out that this specific place is structured so that they want to manage my accounts, for a fee. Their fee is $2,000 a quarter! I would meet with them several times a year, but as said above, that's not what I'm seeking. To me, its nuts to pay that amount for few answers and guidance.
These are the only fee-only financial planners located within 80 or so miles of me, (northern Los Angeles county). The lady did steer me to a different organization with members who are fee-only financial planners and who work on an hourly basis. None of them are anywhere close. It would take me a two-hour one-way drive to visit any of them. I did some rudimentary investigation of some of them, and none impressed me as being worth losing a day of work for a visit.
Hence, I'm trying to educate myself from all available resources, of which C-D is one.
My money is currently in TIAA-CREF. They have proven themselves to be one of the better 403(b) organizations. Very reasonable fee structure, and honest to a fault. They just don't, or more likely, can't, give 'advice' other than very general background data and ideas. If I do purchase an annuity, it will be from them, and can be structured any way I want it to be. How I would want it is something that I'm trying to figure out.
Thanks again for hour help and insight.
I have learned an awful lot just by being a regular here and on the investment board. Now nobody here is a pro and we hesitate to give advice that could change your financial future, but it's a good place to learn
Wondering what you didn't like about the hourly fee adviser you met with.
Annuities have greatly evolved over the past few years.
There are many options now when it comes to an annuity.
the simple immediate annuity or a simple income annuity as longevity insurance work the best , they have zero complexity and no fees. they work great as a cash/bond substitute
I have learned an awful lot just by being a regular here and on the investment board. Now nobody here is a pro and we hesitate to give advice that could change your financial future, but it's a good place to learn
Wondering what you didn't like about the hourly fee adviser you met with.
i agree .. 95% of what i know i got from others smarter than me on an early retirement forum. all i do is pass on what i learned. these forums are amazing as far as the wealth of knowledge you can get.
i use a version of a bucket plan myself. while it adds no real mathematical benefit to a standard systematic withdrawal where you keep your allocation the same i find my mind likes it better.
the only issue with buckets is as you spend down your equity allocation climbs higher and higher until you refill, some have 7 years safe money and 7 years of bonds while the rest goes in to equities.
in the event of an extended down turn you can be 80 years old and 95% stock before you refill..
with a standard systematic withdrawal plan that does not happen as you spend down and draw equally from the pie keeping the same allocation.
none is better than the other , just some make you feel more comfortable.
Last edited by mathjak107; 04-24-2015 at 03:20 PM..
Wondering what you didn't like about the hourly fee adviser you met with.
I didn't meet with any. It would have been a two-hour, one-way drive through Los Angeles traffic to do so. I read what they said about themselves on their web pages, and none of them 'specialize' or even mention working with retiree needs. I did not research those who were two counties over. It is difficult for me to believe that in a city of several million, (San Fernando Valley and nearby environs), that there are so few hourly-based fee-only financial planners. In fact, none! The closest ones to me were located in beach cities many, many miles through some of the worst traffic on the planet. Still have time to figure it all out, so I'm not desperate enough to fight that traffic. The stress level just isn't worth it . . . yet.
In fairness, I'm sure there are a whole bunch of fee-based financial advisers in the area. They may be good, and I'm sure a lot of them are. I'm just not convinced that what they have to offer me is in my best interest. Honestly, I don't trust them. The old, "Fool me once, shame on you . . ." thing. I'm on guard about being 'fooled' again.
it does not matter , they are stocks and will always act and be like stocks. they do not replace cash , bonds or annuities. they work in conjunction with .
Who said stocks "replace" cash, bonds or annuities?
I'm trying to find out why one would want an annuity instead of a portfolio of stocks that have historically grown their dividends in just about any environment.
because annuities are not a stock replacement . they are a replacement for a conservative investment such as bonds and cd's . it would make little sense to try to substitute equities with an annuity .
many use annuities in conjunction with stocks not instead of stocks unless they are so risk averse they only want cash and bonds..
a 50/50 mix of equities and annuities works better than a 50/50 mix of equities and bonds and cash.
it would be a mistake in my opinion to try to substitute an annuity for stocks or stocks for an annuity. most variable annuities , if that is what you are referring to act more like conservative investments with guaranteed income levels and floors. they are better used as well as a proxy for bonds instead of a equity investment.
Last edited by mathjak107; 04-24-2015 at 03:45 PM..
I didn't meet with any. It would have been a two-hour, one-way drive through Los Angeles traffic to do so. I read what they said about themselves on their web pages, and none of them 'specialize' or even mention working with retiree needs. I did not research those who were two counties over. It is difficult for me to believe that in a city of several million, (San Fernando Valley and nearby environs), that there are so few hourly-based fee-only financial planners. In fact, none! The closest ones to me were located in beach cities many, many miles through some of the worst traffic on the planet. Still have time to figure it all out, so I'm not desperate enough to fight that traffic. The stress level just isn't worth it . . . yet.
In fairness, I'm sure there are a whole bunch of fee-based financial advisers in the area. They may be good, and I'm sure a lot of them are. I'm just not convinced that what they have to offer me is in my best interest. Honestly, I don't trust them. The old, "Fool me once, shame on you . . ." thing. I'm on guard about being 'fooled' again.
I can't address the logistics. But if you are paying someone a flat our hourly fee why would you not trust them? What would they have to gain by steering you in the wrong direction? They all depend on referrals, it serves them no good to put you in a plan that is not in your best interest. Just the opposite actually.
"Annuities work a lot like Social Security. With Social Security you pay your money into the system from each paycheck. You have no control over that money. The Social Security funds are pooled and invested. Some people live long enough to receive all of the money they paid into Social Security and more in the form of a monthly benefit. Other people die at a young age and never receive any Social Security benefits. Their money remains in the pool of funds and is used to pay other people. Your heirs do not get your social security funds back if you die before they are disbursed to you. Annuities work the same way. You are guaranteed a monthly amount while you are alive. When you die payments stop....."
I have a mass mutual odyssey plus fixed annunity that I named my daughter as beneficiary. The sole purpose of purchasing it was to be able to pass it onto her upon my death. Never had any intentions of using any of it. I know very very little about investing and this typing of finances. What I read above *really* concerns me. Did I make a B-I-G, B-I-G mistake?? Thanks
people buy the wrong products for the wrong reasons all the time.
if you want a product optimized for dying and passing on you buy life insurance . for a product based on living and income you buy an annuity.
once you start mixing you end up with costly riders that end up being far more expensive to accomplish the same thing.
passing an annuity to heirs is a much more expensive deal than life insurance. utilizing life insurance as a spending vehicle if you live is much more costly than an annuity.
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