Thanks for all the thoughts! Knowing the big picture - that I can track down a fiduciary, certified financial planner who will give advice for a flat fee - is really helpful. All these different payment structures had my head spinning, trying to parse out what was objective advice and not a sales job on the advisor’s programs or whatever. A lot of my friends and family get the advice from people who manage their investments. We don’t have that (as yet).
Appreciate it!
Excellent point. Fidelity has a fantastic zero fee HSA. Typically, you can transfer funds out of an employer fund once a year.
Some employers offer financial advisor services (a few visits) as a benefit. We did Meryl Lynch consultation years ago, back when college expenses were about 10 years out. We did invest a small amount for each kid with ML … honestly did not love that (at the time, the statements were many pages, a bit confusing). But it did get us to gather our our various paperwork for review.
Over the years we also signed up for a few different 3 night classes at the community college and took advantage of the free consultation. Did not uses any of the advisors, but it was useful exercise.
Thanks Colorado_mom! Like the free seminar idea & will look around!
If he is saving for a down payment on a house or has other financial needs - one has to weigh things out.
If you want to delve into the nitty gritty and learn more about it all, take over yourself as it were, Bogleheads is a great forum for every tiny detail and WhiteCoatInvestor, while aimed at physicians, has great articles and info for anyone.
Around here, older folks receive plenty of postcards from advisors in search of new clients offering a free dinner at pricy restaurant and presentation about Social Security etc. We opted to not do those in favor of the postcards advertising classes helped at community college (3 nights). At the time the fee was about $60/couple to cover the class materials, then freebie consultation(s) with the instructor/advisor. Couples who feel more confident about resisting a sales pitch could consider the free dinner offer, especially if with an advisor recommended by a friend.
For the newbies here, whatever path you choose it will be helpful to have your Social Security projections. You need to create an account to do that.
my Social Security | SSA
I pulled up his tax documents and his HSA is managed by Health Equity. He is in Ca. I don’t know what they charge him. I’ll give him a heads up to check. I think he is considering reducing some of his out of paycheck deductions. He’s also been participating in an employee stock buying plan. He is no longer sharing living expenses with someone so he is feeling it in his wallet. I’m happy when he has his money in things he can’t get to as he is a risky investor. He is an adult and it’s in his hands I can just advise if asked.
I have done at least one of those free dinners, and although I didn’t meet with the advisors later, I did learn a little something. I was lucky to have some retirement related seminars at work that discussed some of the financial things we talk about here. Often the people who came in would offer “free” initial consults to our organization and I did that also. I paid someone to run some numbers for us, in a helpful way also.
We used a fiduciary CFP in the past. The relationship was fine, but I always felt there remained a conflict of interest. They did better when we did better, primarily because their fee was based on a percentage of funds under management. (It was not Fisher, and I don’t know if their paradigm is the same). Their fee increased if funds did well, and vice versa. They still made money when the funds did poorly – just less. And obviously the more they manage, the higher their fee – which in our case became a sensitive subject.
After a few years, we felt we were put on “auto-pilot”. They would answer our questions, but rarely give pro-active advice. They would also subtly (but often) suggest that we transfer past company 401k funds, or what we called our emergency fund to them. The emergency fund was not invested in the market, so we felt there was no reason to pay a management fee on that! One time their suggestion was not-so-subtle, which was our red flag to look elsewhere.
Neither DH or I are interested in spending the time to actively manage our retirement accounts, so perhaps a different type of fiduciary may be advised. For those of you who use one who charges by the hour, or project, are you willing to share typical fees, how often you use them, etc.? It would be interesting to compare costs with percentage based advisors. Also, has anyone used the Vanguard advisors? I assume you are placed in “auto-pilot” type of accounts, but at least their fees are much less than typical independent advisors.
I called Health Equity and although they sent me emails that they can’t do the transfer because —— (given a couple of different reasons) the latest being I need to liquidate my stocks before I transfer them. The stocks have been liquidated and the transfer is pending
For anyone who does this, I hear HE is very backlogged and the transfer will take longer than you are told.
I only did a partial transfer because my husband’s company that he retired from is still making deposits to that account. Once he goes on Medicare, I’ll close it completely.
One question. I can still contribute to our HSA. Is there any benefit to transfer money from our IRA to a HSA?
My fiduciary CFP similarly does better when my account does better, BUT the percentage decreases as the value of the account increases.
For example: 2% for the first amount, 1.5% on the next increment, 1.0% on the next increment, etc.
It becomes negotiable at mid 8 digits!!
As I have posted here before, I have my money with Vanguard Personal Advisors. If you invest $500k or more, you get your own personal advisor who you meet on the phone quarterly.Appointments can be scheduled as needed as well. They also have a video chat option. My assets are much less than most people here and I hit the $500,000 amount after my father’s estate was finally distributed. That and a long-standing IRA that was almost all in Fidelity funds that I selected before I adopted my daughter (now 26) back when the IRA contribution limit was $2000/year and through totally passive, lol, management, i.e., I rarely ever opened the statements I got in the mail.
I have had 3 or 4 advisers over the years; they were all wonderful and eventually were promoted within Vanguard and moved me to the next. One sent me flowers when I got my very late-in-life MSW degree. My current adviser was very helpful recently when I figured out how much I could afford to give my daughter and future son-in-law toward their wedding after they got engaged earlier this year. I think I remember that when I signed on, I filled out a questionnaire to evaluate my risk tolerance, My money, composed of IRA, “regular” investment money, and a Roth that my adviser helped me establish started when I began my work as a therapist and started earning money, is all in Vanguard index ETFs. I am very satisfied that my money is well-managed and the fees are minimal.
How does one figure a state pension into retirement planning - is there a website for that? I see totals places – “how much you need for retirement” - but I don’t know how to adapt a pension into that. Thanks.
The fee percentage should decrease as the amount invested increases, not the other way around.
Your state pension is going to be similar to other people’s pensions. First you will have a decision when you retire - if you have a spouse and what options you may have with ‘rights for survivorship’. A spouse will need to sign off with your choice.
You have your income stream before retirement. At retirement, your Social Security, pension, and any amounts you draw off of retirement funds (like 401k or other retirement investments). You determine what your financial needs are - and there are calculators to how long your money will last.
If you only have SS and your pension, you do need to see if the drop in your funds per month can handle the expenses you have per month.
DH had an aunt that owned her home, had SS, and chose to only live off of SS plus the gains on her nest egg so her nest egg would last – it was somewhat modest gains. The nest egg was the result of the sale of the farm her H and she had. Her money did last but she had to be frugal in expenditures.
DH and I have no pensions (outside a $131/month from company sale to another company DH worked for that went from a retirement plan and 401k to just a 401k – so DH got stock, some cash, and this small annuity). So we have built up assets, a lot with 401k and then spinning off to other investments like annuities. IRAs we had go to Roth IRAs.
The risk tolerance is a very good thing with working with financial person and keeping investments within your comfort level.
We are glad we found our financial person/company when we did. It took years (during our 50’s and early 60’s) to continually tweak our portfolio. Everything is working nicely. We attend twice a year ‘state of the markets’ group presentations (open to potential clients and current clients) and schedule twice a year with our financial person. We have input some recent numbers (DH’s SS amount, the small change in my SS amount) via email. At our last meeting, we set up the cash stream from our investments, and also were working on the Roth IRA conversions to handle between now and age 72 (taking specific money from 401k and converting to Roth IRAs and paying the tax each year on specific money to convert at each year based on our funds which will require distributions starting at age 72).
If you’re trying to figure out how to assign a monetary value to your pension, one way to do it is to find out how much companies would charge for an annuity of your pension amount per month.
You can try googling “immediate annuity cost.”
If this link works, you can put in the information you know (including how much you get for your pension each month) and it will give you the cost, which is kind of an estimate of it’s value.
There are other calculators like this out there, and some let you put in your own assumptions.
This has always been my biggest challenge as well. Do I figure the present value for it when converting where I am in terms of planning? I just never know…
We had a pension also. Not a state one but private business. We were able to project the value of the pension on the company investment website. They had a tool for it, you could put different end dates and it would give what the pension would pay out. Based on age and salary. They even had a tool to calculate the different pension options. 100% spousal benefit, we had an option for lump sum or monthly benefits.
As far as planning, we used what we needed in retirement spending and factored the pension into our calculations. My husband also did an excel spreadsheet to calculate how much the pension was worth based on life expectancy.
For instance if you expect retirement spending is $10,000/month and you have $5000/month in your pension, how much money will you need to generate $5000 a month? Also add any social security income and any offset you will need until you can file. If you retire before Medicare, factor in the price needed for healthcare.
We also talked to a retirement counselor from our investment firm and they asked us the questions I’ve mentioned. He confirmed that we were on the right track.
I didn’t use any financial planner, just good old Excel spreadsheet, I was being extremely conservative in my estimate. So far so good. I prefer to DIY on most things and that’s included retirement planning, there are lots of information out there.