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He had one prepared recommendation. We opted for a change to his plan to better achieve items #2, #3, and #4 above. Item #1 was covered by his choice as well as ours.
Very appreciative that he listens to us!
Having a good financial guy was one of the best financial decisions I ever made. I kept him even after I moved 1,000 miles away. He retired but his partner seems almost as good but I have to pay closer attention. He has some good advice and makes sense. I could find someone local but I feel better staying with somebody I know and have a history with.
My goal has recently been to consolidate everything as much as possible beneath a single management umbrella. We still have multiple investments and multiple investment types, but they are mostly within the oversight of our Financial Planner. My work 401(k), and my wife's work 403(b), and a small "Fun Money" trading account are separate for now but they will be consolidated beneath the same umbrella as well after we retire.
This will make it easier for both of us as we age, and also for our heirs after we pass in 30 years or so.
I assume you meant 'minimizing' taxes, but our philosophies seem to be identical. Make it easy for the survivor. The pensions of yore made this all so easy. They no longer exist so we need to formulate a means to make it simple and easy.
Our investments can be grouped into two broad categories. Income Producing, and Discretionary & Growth. The income producing category contains two Annuities (I know, lots of people hate these but the guarantees are comforting, the fees are reasonable and transparent, and it is our choice), each will provide a single monthly check to us, or the survivor after the first of us passes. These monthly check values will not change with time or death of one partner. In addition my wife will receive a small ~$700 monthly public pension, and we will each receive SS benefits. A total of five automatic deposits into our Checking Account each month which will actually exceed our forecasted monthly living expenses for the first 15 years or so of retirement. These surpluses will periodically be moved into Discretionary & Growth.
The Discretionary & Growth is more complicated, with more components, but it does not require active management by us. Periodically we may want to, or be advised to, move from one investment to another, but these changes will likely happen less than once per year. And we will have assistance with these decisions/actions.
My goal was to find an easy plan that will work for us as we age into our 70's, 80's, and beyond.
Our Financial planner initially wanted us to move more money into the Discretionary & Growth category, which would have required us to make monthly withdrawals from these funds to meet our forecasted monthly living expenses from Day #1. We already have ~$500K in Discretionary & Growth so I preferred leaving more in the Income Producing category to eliminate the need for making monthly withdrawals, and more importantly, eliminate the monthly decision of identifying which funds to draw the money from.
KISS - Keep It Stupid Simple.
Agree with your decision to leave more in the Income Producing category. We will create our own pension by annuitizing (immediate annuities) enough assets to more than meet out monthly living expenses. Don't have to be concerned with what the market does, this way.
What a nice surprise to have extra, despite the recent crazy markets!
Crazy markets? A nine year bull is crazy all right! Considering NoKo, Iran, Syria, Russia, California's war against its citizens, CNN's fascination with urination, a politicized FBI/DOJ, and The Great Mueller Fishing Expedition, I'd say a few percentage points correction is a sign of stability.
All of this planning seems somewhat unnecessary. You do not have to have everything planned out for the rest of your life just because you retire. If I die first, or lose interest/capability, my wife knows to contact our TIAA financial advisor. He will advise consolidating our portfolio into managed accounts. We may end up doing that in a few years anyway.
There is no reason for annuities or laddered CDs or other accounts that don't even keep up with inflation. We can let TIAA manage our investments based on our specified allocations and not have to worry or pay any attention.
Unless you are 100% equities you have bonds and some cash . Immediate annuities and cd ladders are just proxies for some of the bond side. None of it will keep up with inflation over time but that is not its purpose.
Immediate annuities can actually do better at times than bonds would but in no case think of them as anything different than the fixed income side of a portfolio which mostly all us retiress have in some form or another
All of this planning seems somewhat unnecessary. You do not have to have everything planned out for the rest of your life just because you retire. If I die first, or lose interest/capability, my wife knows to contact our TIAA financial advisor. He will advise consolidating our portfolio into managed accounts. We may end up doing that in a few years anyway.
There is no reason for annuities or laddered CDs or other accounts that don't even keep up with inflation. We can let TIAA manage our investments based on our specified allocations and not have to worry or pay any attention.
The fact that you are relying on advice from TIAA indicates that you need to be more involved with financial planning. TIAA is a solid company, but you can do much better. Money put into TIAA annuities while working are required to be taken out over an extended period of time. Further, their rates on fixed products are not always competitive. For example, I have money in a fixed account with one of their competitors paying 1% more than TIAA. I've had a wealth management advisor with TIAA. It's definitely not the same as having your own independent fee-based planner. I cannot stress enough how important it is to have a financial plan and be involved in the planning process.
The fact that you have money with TIAA indicates that you need to be more involved with financial planning. TIAA is a solid company, but you can do much better. Money put into TIAA annuities while working are required to be taken out over an extended period of time. Further, their rates on fixed products are often not competitive. For example, I have money in a fixed account with one of their competitors paying 1% more than TIAA. I've had a wealth management advisor with TIAA. It's definitely not the same as having your own independent fee-based planner. I cannot stress enough how important it is to have a financial plan and be involved in the planning process.
You do not appear to be up to date on TIAA. I have no annuities with TIAA. I own some TIAA real estate. They work through Pershing to handle my individual stocks. I use them for my mutual funds and I also have a managed account with them that is 60:40 stock:bond.
I do use TIAA because at one time they were a coop and still function in a similar fashion. Advisors are not paid on commission and have never attempted to sell me any specific products. I have not met with my advisor for a couple of years, but when we meet he will do a full financial review and might also recommend changes in allocation or further diversification. Unless something is majorly out of wrack, there is little or nothing that they will recommend.
One thing I can readily do with TIAA is to use their managed portfolio service. The fee is a bit high at about 1% but that also includes all of the fund fees. For that fee they maintain my desired allocation and rebalance whenever it drifts by more than 3%. They also pick and actively manage all of the investments. Those include typical stock and bond funds but also products that may not be available for retail purchase. The portfolio is also highly diversified and typically several of the funds are changed within a one month basis. I have been using this managed portfolio for about 6 years and so far it seems to outperform what I can do on my own even after paying the fees. Eventually I might just give up and switch more assets to managed status.
Unless you are 100% equities you have bonds and some cash . Immediate annuities and cd ladders are just proxies for some of the bond side. None of it will keep up with inflation over time but that is not its purpose.
Immediate annuities can actually do better at times than bonds would but in no case think of them as anything different than the fixed income side of a portfolio which mostly all us retiress have in some form or another
Actually, there are immediate annuities with inflation protection. However I don't think most are a good value. A portion of our portfolio will be 100 % in stocks and managed by a RIA to help in this regard.
Before anyone ever considers an inflation adjusted annuity they would be buying a poor product compared to delaying ss.
For the amount of ss money you would layout from 62 to 70 you could never buy any annuity product that is cola adjusted and passes to a spouse and pays as much
You do not appear to be up to date on TIAA. I have no annuities with TIAA. I own some TIAA real estate. They work through Pershing to handle my individual stocks. I use them for my mutual funds and I also have a managed account with them that is 60:40 stock:bond.
I do use TIAA because at one time they were a coop and still function in a similar fashion. Advisors are not paid on commission and have never attempted to sell me any specific products. I have not met with my advisor for a couple of years, but when we meet he will do a full financial review and might also recommend changes in allocation or further diversification. Unless something is majorly out of wrack, there is little or nothing that they will recommend.
One thing I can readily do with TIAA is to use their managed portfolio service. The fee is a bit high at about 1% but that also includes all of the fund fees. For that fee they maintain my desired allocation and rebalance whenever it drifts by more than 3%. They also pick and actively manage all of the investments. Those include typical stock and bond funds but also products that may not be available for retail purchase. The portfolio is also highly diversified and typically several of the funds are changed within a one month basis. I have been using this managed portfolio for about 6 years and so far it seems to outperform what I can do on my own even after paying the fees. Eventually I might just give up and switch more assets to managed status.
It doesn't appear you are well informed on risk-adjusted performance of mutual funds. You can do much, much better than TIAA funds. Of course, a TIAA advisor is going to tout their own funds. BTW, I have been told by someone in the business there are incentives for TIAA reps to bring in new business. Again, I would become more active in your financial planning process.
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