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I'm five years from retiring, right now I have 401k and 403 investments thru work. Was interested in how you all manage your investments now that you are retired? Any advice on steps like financial planners etc would be appreciated
We roll our own, have kept it simple with simple three-way portfolio (total us stock, total intl stock, total bond) of low cost index funds. At end of year will sell as needed to cover next year's expenses then rebalance.
Also will be implementing Roth conversion ladder to take advantage of 0% and 10% tax brackets.
There is so much info out available online, if you commit the time to do your homework and know where to go to ask for help managing your own money isn't an unreasonable task.
I manage my own. I would invest 100% in mutual funds, and avoid any individual stocks or annuities. Vanguard can handle all (or most of all) of what you need. Stay low cost, avoid fees, shoot for the average. Trying to break the average results in 85% of people underperforming the indexes. (yes, 85%!)
Those funds can include stock funds, bond funds, even money market. Whatever your risk level is, plus your individual needs. Vanguard will even help you determine those factors.
It sounds like I work for Vanguard (nope), but I simply like them because they are 100% oriented for the customer. There is a reason they are the #1 investment company in the US, with over $3 Trillion dollars in funds.
My husband was diagnosed with cancer and died 3 years 6 months ago. I was 59 years and 10 months old. We had always lived paycheck to paycheck except we had a 401 k, life insurances through work, and a future pension. In order for me to keep the majority of his pension he had to resign from work after he was established in short term disability (an insurance through work we paid for) He then took a lump sum distribution os his retirement straight into a third party held IRA. Before going good on disability we were able to receive an 80 percent payout on his life insurance policies at work. Because of these measures I was able to pay off house and debts and had 1 million to last me all my life.
I went with a professional and I am so glad I did! My after tax return combined with SS (which I took at age 60) and a small military pension leaves me not worrying about money. I interviewed 3 people. One Knights of Columbus rep wanted me in annuities. One wanted to me to pay 150 an hour to advise me....portfolio management was extra. I went with an RBC advisor in low risk diversity. So far my principle has continued to grow while.providing me with an income....I do no think I could ha e managed on my own.
If your 401k is in expensive actively managed funds then rollover to Schwab and put everything into their Schwab branded stock ETFs which have lower expense ratios than Vanguard plus no-cost online trades so you can sell at no commission. I don't work for Schwab but like them and recommend them to everyone I know.
Need to know your investing skills. Assume none. Then meet with a fee only planner.
Before that check educational programs at work.
Go to discount brokers sites and start reading about retirement planning.
Do it ourselves with list of reading of Bogleheads both books and forums along with other like minded writers. Keeping it simple with index funds and active fundscwith long term track records and stability along with a good Fidelity newsletter. Transitioning now to the next stage of retirement income.
We file our own tax returns (individual and business) and handle our own investments. When I was fresh out of college many years ago, I used Merrill Lynch Brokerage. I quickly learned that the investment advisers had to make a living off their clients and they almost never put clients' interest above their own (which is understandable and expected). So, I learned very early on that I was the best guardian of my own money and investment.
We roll our own, have kept it simple with simple three-way portfolio (total us stock, total intl stock, total bond) of low cost index funds. At end of year will sell as needed to cover next year's expenses then rebalance.
Also will be implementing Roth conversion ladder to take advantage of 0% and 10% tax brackets.
There is so much info out available online, if you commit the time to do your homework and know where to go to ask for help managing your own money isn't an unreasonable task.
Good luck!
Love your plan. I also use the three fund portfolio.
I spent some time trying to find good and affordable financial advice for my medium sized portfolio. I felt confident with the advice I received and I also received some advice that was dishonest, incorrect or inappropriate. I have spent quite a bit of time trying to understand how to handle my investments. The more I learn, the more it seems that a basic, simplistic approach works best. You have already heard some of the basics. Here are some points that I think are valuable:
Don't try to be an expert. Don't try to play the markets. Don't pretend you are an analyst and can wisely pick individual stocks.
Buy mutual funds with low management fees. Set a stock:bond allocation that relates to your risk tolerance and personal financial situation. That should be somewhere in the range of 40-70% stocks. Then STICK with that allocation. If the stock market drops, don't panic and sell. Instead maintain your allocation; i.e., buy stock funds. If the market goes up, do not get greedy. Maintain your allocation by taking some profits and selling some of the stock funds. Diversify. Not just stocks and bonds but some medium/small cap stocks in addition to the large cap stocks. Consider additional means of diversification such as real estate investment funds. Keep some cash on hand such as bank accounts, money market or short term bond funds.
These few simple ideas should help you make good financial choices. If you look for financial advice knowing some basics will help you to decide if the advice makes sense.
Finally don't forget that a good financial plan also means looking at costs especially big costs such as housing. I hate budgets but it is essential to know at least roughly how much you can spend routinely. You need to understand safe withdrawal rates and how those might change as the economy changes.
You asked about investments. I also mentioned costs. In addition you need to think about social security. Consider delaying starting social security. Delaying social security is one of the best steps you can take. That will give you a return of 8% plus cost of living on that amount.
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