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I'm in Rhode Island and am now going to start a deep search for a fee-only FA to help with this. I plan to talk to my insurance guy for a hopefully unbiased referral, my retired neighbor etc. Vanguard and Fidelity both have done me no real harm over the years. My plan is to have a plan in place by year's end. I am going to essentially shut down the wolves from the insurance companies. They have been useful education-wise but distancing myself from my money? Doesn't give me warm-fuzzies at all.
ANY/ALL of these Mutual Fund (and Insurance) companies are in business to make money for themselves. Your well being, other than keeping you alive/in house to pay fees, is of no concern to them.
You sound like a reasonably smart person, and have put away a decent nest egg.
IMHO Insurance/annuities are not of particular concern. If you 'take the early train' your wife will be in good shape without an 'insurance kicker' for which you will pay a 'nice premium'. A quick read of your assets indicates you don't 'need' an annuity product (but I am sure the insurance guys would love to sell you such).
At your age, you should have about a 50/50 split between a high quality stock portfolio, and a fixed income portfolio. The fixed income/bond portion might be in high quality bonds, or munis, depending on you tax situation.
Think about using Vanguard, or even Fidelity, for these funds. They have fees embedded in their products of just under one percent per year. Not cheap, but unless you want to do the picking yourself, it is (sort of) reasonable.
Don't overcomplicate your situation. Unless you enjoy the day to day machinations of managing your money, make some smart macro decisions, invest the money accordingly, and, other than a 'couple of times per year portfolio check', forget about it. If you need the cash flow, have the monthly dividends sent directly to your checking account.
I'm in Rhode Island and am now going to start a deep search for a fee-only FA to help with this.
Here's one place to start, if you haven't already found it
NAPFA
"The National Association of Personal Financial Advisors (NAPFA) is the country’s leading professional association of Fee-Only financial advisors ..."
Here's one place to start, if you haven't already found it
NAPFA
"The National Association of Personal Financial Advisors (NAPFA) is the country’s leading professional association of Fee-Only financial advisors ..."
I agree, this is the best place to find a Fee Only Advisor. They will charge you 1% to manage your investments. Have you thought about taking social security at 70? That is the same as purchasing a deferred annuity and it is backed by the US government.
I agree, this is the best place to find a Fee Only Advisor. They will charge you 1% to manage your investments. Have you thought about taking social security at 70? That is the same as purchasing a deferred annuity and it is backed by the US government.
ONLY 1%? For the OP, $9,500 per year to manage his portfolio. And that is in addition to any other fees and investments that his money is put into. That fee is paid regardless of the performance of the portfolio.
I would agree with the prior advice of using a service like Vanguard to help you with your investments. Many of their services are at low cost.
I agree, this is the best place to find a Fee Only Advisor. They will charge you 1% to manage your investments. Have you thought about taking social security at 70? That is the same as purchasing a deferred annuity and it is backed by the US government.
Quote:
Originally Posted by jlawrence01
ONLY 1%? For the OP, $9,500 per year to manage his portfolio. And that is in addition to any other fees and investments that his money is put into. That fee is paid regardless of the performance of the portfolio.
That's only if you want an ongoing asset management service. And the more you have, the percentage goes down (2nd million @ 0.75%, 3rd million @ 0.5%). And rates are different in different parts of the country.
They also have
Financial Planning Consultations, with additional hours available.
Or a Limited Financial Plans, which is a more formal written plan.
Or a Comprehensive Financial Plans, which is a comprehensive written financial plan
Or a Flat Fee Annual Retainer Plans.
most folks need just a good consultaion by someone who really knows the retirement end. to bad very few do .
most are only well schooled in the accumulation stage.
hopefully i found someone who i plan to use to help run some social security /rmd/roth conversion/medicare surcharge/tax scenerios for me so i can see how taking ss either at 66 or 70 works out .
i may have found someone , i am just starting to work with him now . ooooh and he is not fee only. he sells products too,heaven forbid.
we may even buy a long term care policy from him. yikes!
Personally, I would not touch an annuity with a 10 foot pole. I would not take any financial planning advice from an insurance salesperson. If I wanted retirement planning advice, I would search out a good fee only CFP. Napfa is a great place to begin your search, another is the Garrett Planning Network Garrett Planning Network » Welcome To Garrett Planning Network
You've done a good job saving. Drawing down your assets can be as simple as a reasonable asset allocation plan and a 4% withdrawal rate. Continue to keep your costs low. If you voluntarily hand over 1% of your assets in fees, there just went 1/4th of your annual withdrawal.
ANY/ALL of these Mutual Fund (and Insurance) companies are in business to make money for themselves. Your well being, other than keeping you alive/in house to pay fees, is of no concern to them.
Think about using Vanguard, or even Fidelity, for these funds. They have fees embedded in their products of just under one percent per year. Not cheap, but unless you want to do the picking yourself, it is (sort of) reasonable.
Vanguard is the exception to your statement. Vanguard is owned by its funds, which are in turn owned by VG's investors. There are a few actively managed VG funds approaching 1% in fees, but most VG funds cost far less. For example, the Vanguard LifeStrategy Conservative Growth Fund, one reasonable choice for a retired person, has an ER of .15%.
most here already know my views on retirement planning since i do take an interest in learning all i can from some of the smartest minds on the planet on the subject..
so here is my opinion:
unfortunatly many folks do great jobs saving and growing money but they are lousy at keeping it out of the hands of uncle sam.
retirement tax planning can be a minefield . between getting your social security taxed , medicare surcharges and rmds all working together the tax penalties can be amazing.
you are dealing with 2 sliding tax tables. one on how much of your ss gets taxed and the other moves on how much ss gets taxed when combined with other income and when that rises it causes more ss to get taxed on the other slider which starts the cycle over again causing higher bracket jumps .
the two sliders can be killer working together ..
you can jump from 25% to a 46% marginal tax rate in a blink of an eye if you plan wrong with just a few bucks over.
with more and more folks indexing and using etf's they are very tax efficient in the accumulation end but dealing with built up capital gains over decades and little taxes paid along the way can be a tax torpedo later on if you want to sell and tone things down or go with another investing model .
i know we sold off our growth model and went in another direction with our retirement investments.
folks do not see pro's to help them with this stuff because in their limited knowledge they only know what they know and not what they don't know.
4% withdrawals is not a rule , it was a lab test based on certain parameters being true and present . all bets are off if those parameters are not in place as to what you will get.
most of the time frames that testing was done on averaged historically 5-6% interest rates not 0-2%.
none of the testing included the scenerio we are in today which is low interest rates and high stock valuations at the same time.
researchers today say in the lab the old 4% is now about 2.80%. how you structure your own spending will make that number better or worse but the important thing is there is no such thing anymore as "simply take 4%
immediate annuities can be a fabulous product in retirement when coupled with your own investing. they provide a payout of 40-45% higher income than any safe ,secure consistant income stream you can get on your own without risk since only treasuries meet that requirement . For folks without pensions they can be a product to consider.
you need 40% less money devoted to bonds and cash instruments with an immediate annuity to get the same income level and that frees up money that can be allocated to much higher growing investments rather than sit in cash and bonds.
filling your non descretionary spending with a pensionized income from an immediate annuity not subject to the whims of markets and interest rates can be a huge benefit in retirement. then have your own investments cover your wants , inflation and legacy needs..
have limited savings ? why not plan until only age 78-80 or so giving you more money to spend now then you typically could and get a deferred fixed annuity to kick in down the road as longevity insurance.
they are pretty cheap since they kick in way later and if you die before , well dead is dead , game over.
folks get ideas in their head about certain things and they run on believing mis-information and in the long run they shoot themselves in the foot.
folks will miss the opportunity to work with some real good planners because of this fee only myth.
most planners have deals where they get finders fees for steering you towards certain investments or products regardless of their pay structure.
many are fee only because they lack the creditionals and knowledge to sell certain type products or they would.
do you think there really is a vested interest in how you do with someone you are seeing for an hour? maybe ,maybe not but fee only is no criteria for judging a planner.
knowledge is and the ability to know the 2nd half of the game is what counts , guys the like of ed slott come to mind.
very few planners really know the ins and outs of the retirement end to be effective. but if you find one you may find he has products to sell. just do your homework on the products,ask questions but certainly do not judge a planner on how he gets paid..
Last edited by mathjak107; 07-06-2014 at 06:23 PM..
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