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I have read through a lot of previous posts on this topic and trying to filter through all the advice and still having a hard time knowing what to do. My husband retires in a few weeks and now it is time to move our 401K to an IRA. Our financial advisor has someone they recommend and we went over the plan and it would be a 1.5% fee every year. I know that is high. We don't have a huge 401K since the company did not initiate one until a few years ago. I have talked with a Fidelity advisor and will be setting up an appointment to get all the details on fees. But it looks like much less in fees from them. Unfortunately, neither my husband nor I have any idea at this stage of our lives as to what our portfolio should look like and what to invest in and how much. We got lucky with our 401K and it did well, but it is too aggressive for going into retirement. That much we know. My husband is not comfortable picking what to invest in and actually I am not either. We really need some guidance and I have read many posts on this topic and read several articles, but still am not confident in choosing. So he wants to go with who our financial advisor recommends and let them pick.They would have complete control of what to pick and will adjust and rebalance when needed as we are told. I am not on board because of the fees and feeling like I have no control in what is picked. However, we still don't even know what we should be choosing. Really disappointed in ourselves for never being more financially literate on this. Any recommendations or advice would be appreciated.
I have read through a lot of previous posts on this topic and trying to filter through all the advice and still having a hard time knowing what to do. My husband retires in a few weeks and now it is time to move our 401K to an IRA. Our financial advisor has someone they recommend and we went over the plan and it would be a 1.5% fee every year. I know that is high. We don't have a huge 401K since the company did not initiate one until a few years ago. I have talked with a Fidelity advisor and will be setting up an appointment to get all the details on fees. But it looks like much less in fees from them. Unfortunately, neither my husband nor I have any idea at this stage of our lives as to what our portfolio should look like and what to invest in and how much. We got lucky with our 401K and it did well, but it is too aggressive for going into retirement. That much we know. My husband is not comfortable picking what to invest in and actually I am not either. We really need some guidance and I have read many posts on this topic and read several articles, but still am not confident in choosing. So he wants to go with who our financial advisor recommends and let them pick.They would have complete control of what to pick and will adjust and rebalance when needed as we are told. I am not on board because of the fees and feeling like I have no control in what is picked. However, we still don't even know what we should be choosing. Really disappointed in ourselves for never being more financially literate on this. Any recommendations or advice would be appreciated.
When I was shopping for a financial advisor, I found that most charged between .5%-1%. 1.5% sounds very high. I found that the articles in investopedia and finra were very helpful. I knew absolutely nothing about any of this, but got lots of beginner's information from the New York Public Library. They offer free webinars for knuckleheads like me. You don't need a card for the webinars or even live in NY. Let me know if you want their website url.
Fess should be under 1%.
Fidelity is good. Vanguard and Charles Schwab are two other choices to make.
Once you pick the new broker they will transfer the funds to the new IRA. You do not want the money to come to you first.
For now if you can move the investments to the new broker just do that. They will sit in an IRA and should be no fees to you for doing this.
If the money has to go in cash and you want to take your time select a target date fund that is about 5 to 10 years past your retirement date. Remember you will be retired for 30 or 40 years. 65 or mabe 55 is not old.
Look at the Robo investment programs the above 3 have. Pay attention to how much they want to keep in cash (Schwab) as that is an extra fee and lowers return to you. Fees will probably be under 1/2% and the best you can do. Read each vendors web site.
As you know the market is down now. If you were retired you would not want to sell any stock to pay living expenses. So keep in mind that you will want a 2 to 5 years supply of cash for down markets and emergencies. Cash can include short term bonds (not bond funds), CD's bank accounts. Look up laddering CD's Look at US Ibonds - inflation type. for part of the money.
Good luck
Does your 401k plan include meeting with a financial planner while employed. If it does I would discuss your retirement thinking with them since the service should be free.
I don't think Fidelity at Fidelity.com has charged me a fee for IRA's.
And Fidelity.com makes it so very easy to get one's RMD every year (Required Minimum Distribution) - all done online by oneself - unlike the big production of paperwork requirements and mailing in the paperwork and spending time on the phone required by some banks.
Fess should be under 1%.
Fidelity is good. Vanguard and Charles Schwab are two other choices to make. Once you pick the new broker they will transfer the funds to the new IRA. You do not want the money to come to you first.
For now if you can move the investments to the new broker just do that. They will sit in an IRA and should be no fees to you for doing this.
If the money has to go in cash and you want to take your time select a target date fund that is about 5 to 10 years past your retirement date. Remember you will be retired for 30 or 40 years. 65 or mabe 55 is not old.
Look at the Robo investment programs the above 3 have. Pay attention to how much they want to keep in cash (Schwab) as that is an extra fee and lowers return to you. Fees will probably be under 1/2% and the best you can do. Read each vendors web site.
As you know the market is down now. If you were retired you would not want to sell any stock to pay living expenses. So keep in mind that you will want a 2 to 5 years supply of cash for down markets and emergencies. Cash can include short term bonds (not bond funds), CD's bank accounts. Look up laddering CD's Look at US Ibonds - inflation type. for part of the money.
Good luck
Does your 401k plan include meeting with a financial planner while employed. If it does I would discuss your retirement thinking with them since the service should be free.
We have rolled over 4 401Ks due to retirement, job changes etc.
We have found this to be very important, but beware some companies will not send the check to another company. Fidelity cut a check to Charles Schwab but it had to be sent to us.
The smaller 401k companies seemed to be the hardest to work with.
We had one company a few years ago that would not cut a check to a company, so it was made out to us. These ones you need to keep track of the deposit slips, as it could show up in the IRS's system as a payout and you have to pay taxes if you don't roll over into an IRA in 60 days. All transactions were saved and submitted for taxes, but the initial bill from IRS was scary. That happened before so many deposits/transfers etc were done online, so hopefully it has changed.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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In our time, we used a commissioned advisor, now a fudiciary advisor. Nothing has really changed. 30yrs with this advisor. We are 72/75. He is same age.
IMO, in the long run, a commissioned advisor is cheaper, although the product fees were high. But continuing forward, the advisory maintenance fee is small (probably <0.5 of 1% AUM). If all our assets included, I'm guessing the fee is ~0.2 of 1% to our total assets. He offers 2 consults with 4 color presentation/yr or as needed. Advisor has our purchased annuities, LTCi, small managed account. The annuities is about 25% of our income.
We "manage" small pension, SS, trading accounts and a rental, for the remainder. The trading accounts are self managed. We include all assets for the advisor to review. I haven't had a full review in 3 years (we moved out of state but advisor is licensed in our new state) and because previous years showed that we will be fine...our cashflow and checking accounts are good indications on how well we do in retirement. We have no desire to know our exact wealth.
We do fine and do not expect to run out of retirement funds, although our total assets are rather are not that high, in this area of Washington.
YMMV
Last edited by leastprime; 07-18-2022 at 05:32 PM..
Thanks for all the advice and suggestions. Yep, 1.5% does not set well with me. We have another appointment with Fidelity and will probably go that route.
I have read through a lot of previous posts on this topic and trying to filter through all the advice and still having a hard time knowing what to do. My husband retires in a few weeks and now it is time to move our 401K to an IRA.
Why have you concluded that such a move is in your best interest?
Quote:
Originally Posted by marid4061
Our financial advisor has someone they recommend and we went over the plan and it would be a 1.5% fee every year. I know that is high.
It isn't just high. It is ridiculous. Fidelity is a popular brokerage for roll over IRAs:
Quote:
There is no cost to open and no annual fee for Fidelity's Traditional, Roth, SEP, and Rollover IRAs. A $50 account close out fee may apply.
We don't have a huge 401K since the company did not initiate one until a few years ago. I have talked with a Fidelity advisor and will be setting up an appointment to get all the details on fees. But it looks like much less in fees from them. Unfortunately, neither my husband nor I have any idea at this stage of our lives as to what our portfolio should look like and what to invest in and how much. We got lucky with our 401K and it did well, but it is too aggressive for going into retirement. That much we know. My husband is not comfortable picking what to invest in and actually I am not either. We really need some guidance and I have read many posts on this topic and read several articles, but still am not confident in choosing. So he wants to go with who our financial advisor recommends and let them pick.
The good news is when you meet with Fidelity, they can give you guidance. It can be as simple as putting your money into a combination of these zero expense ratio funds:
Fidelity® ZERO Total Market Index Fund (FZROX)
Fidelity® ZERO International Index Fund (FZILX)
Fidelity® ZERO Large Cap Index Fund (FNILX) (effectively an "S&P500"-ish fund)
Fidelity® ZERO Extended Market Index Fund (FZIPX) (effectively every stock in the Total Market except for those in the "S&P500"-ish fund)
Couple the above with a total bond market fund and you're done.
Of course, you can make it more complicated, but for someone who isn't particularly interested in managing money, it can be quite simple.
The good news is when you meet with Fidelity, they can give you guidance. It can be as simple as putting your money into a combination of these zero expense ratio funds:
Fidelity® ZERO Total Market Index Fund (FZROX)
Fidelity® ZERO International Index Fund (FZILX)
Fidelity® ZERO Large Cap Index Fund (FNILX) (effectively an "S&P500"-ish fund)
Fidelity® ZERO Extended Market Index Fund (FZIPX) (effectively every stock in the Total Market except for those in the "S&P500"-ish fund)
Couple the above with a total bond market fund and you're done.
Of course, you can make it more complicated, but for someone who isn't particularly interested in managing money, it can be quite simple.
Yikes, the bolded funds you suggest would way more aggressive than I would want to be in retirement.
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