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Old 09-21-2013, 06:22 PM   #41
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Wow. Glad this wasn't the treatment I received on what was my 4th post.

MRG
So tell me what you disagree with. It's good treatment, as it is good advice, IMO.

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Old 09-21-2013, 06:28 PM   #42
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So tell me what you disagree with. It's good treatment, as it is good advice, IMO.

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Calling a new guy out on stuff he didn't ask about. I know you're trying to help, some of us learn different. The OP did answer you, just not in the terms you hear.

As far as good treatment, I obviously misunderstand what is good about it.

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Old 09-21-2013, 08:01 PM   #43
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Calling a new guy out on stuff he didn't ask about. I know you're trying to help, some of us learn different. The OP did answer you, just not in the terms you hear.

As far as good treatment, I obviously misunderstand what is good about it.

MRG
Not sure what you mean 'calling him out'? And where did he answer my question? He said something like he was 'comfortable' with him, and got 'good advice'. How does he know the advice was good? Investors were comfortable with Bernie Madoff, too. I'm looking for something objective.

What I'm trying to get at - I think he's putting the cart before the horse. Asking about what questions to ask an FA should be prefaced with:

Do I need an FA? What specifically do I need an FA for? If I have good reasons to need one, how do I determine if this one is any good? I think those are important questions that should be addressed first, ergo, I call that good treatment.

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Old 09-21-2013, 09:59 PM   #44
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Steady, Gents. We're all here to help each other.
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Old 09-21-2013, 10:29 PM   #45
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[QUOTE="Gumby;1359338"]Steady, Gents. We're all here to help each

Agree. Thats my only point.

Thanks,

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Old 09-22-2013, 01:57 AM   #46
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Again, you need some knowledge to know if the FA is 'good', you need to know what to measure. That's enough knowledge to DIY, and save all those fees.
While I am a DIYer and I do save all those fees, I do see how my ideal FA could be helpful to me.

I don't really need or want someone to invest my money for me. I don't really need or want someone to sell me something that he or she will be compensated for selling. In fact, I wouldn't want to buy anything through the FA. I would want advice not sales information.

I don't need anyone to come up with arcane and difficult to understand products that I should buy. I am OK with mostly index funds (I do have some Wellesley).

Still, I can think of things where I really would like to get the advice of someone who knows much more than I do. And, while I do think I am somewhat educated on those stuff (have read several books, followed posts here and other places, and so on), I am not an expert. And, knowing what an expert - a true expert, not a salesperson - would say is not that easy to do.

I mostly lurk some at Bogleheads. There are some very knowledgeable people who post there, some of whom are well known and write some of the books/articles we talk about here. And, they don't always agree on everything! And this isn't because they are idiots. It is because some issues aren't that clear cut.

On some of those issues, knowing general principles is one thing. I think I know that part. But, knowing how to apply those general principles to the specific situation is not necessarily that easy.

Where I would sometimes wish could be obtained would be detailed, personalized advice applying to those general principles to my specific situation, where that situation is not typical. That is, some situations are very typical and general principles easily give a good answer. Other situations have nuances that may call for a different answer. I think this is an area where a true expert could help with giving advice.

The problem is that finding that advice can be difficult:

1. Most FA's are really salesmen, who aren't there to advise you but to sell to you. Even if the FA really does try to advise honestly, the FA has an inherent conflict of interest.

2. There are some free/cheap financial plans out there. We got one from Vanguard. It was OK as far as it went, but wasn't personalized very much to our situation. I could have predicted almost everything that we were advised.

3. Theoretically you could hire an FA and pay an hourly fee just to get occasional advice or even one time advice on specific situations. However, even in that situation you may have difficulty getting this. First, many FAs might not even consult with you except perhaps for a hefty fee as you aren't a regular customer. Even if the FA does so, the FA also has a vested interest in you becoming a continuing client and not just a one shot deal.

So finding a FA, who isn't someone who is selling to you and who doesn't manage your investments, but who is willing to analyze and give advice about your personal situations even though you may be only an occasional client, is not necessarily an easy task.
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Old 09-22-2013, 07:06 AM   #47
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My wife and I are hoping to retire in February, 2014. We are planning on meeting our financial adviser from Merrill Lynch in early October to review our financial situation to determine if we have go/no go decision and if it is a go, how will the financial aspect of the retirement work? What is the draw down per year? What is the best strategy for social security? etc.

What I am looking for is if anybody else had a planning session like this and if so, what was provided by their adviser and how detailed was it?

Thanks.
This week wife and I are going to meet with FA about an analysis of social security, how to maximize that. This is meeting #2, when we get the 'free' report.

It's very apparent to me that he is increasing the sales pitch each step of the way.

Why do this if I have no intention of using the paid services? Actually, I capture the experience and send it to AARP. After a dozen free dinners or so with various FAs, decided to go to next step to glean more understanding of how investors get hooked. I'm really curious about the free analysis, and what value it provides.

This brings me to the heart of discussion, namely, the FA should disclose to you where he has a vested interest. It would then be up to you to determine how extensive his profit is on the product(s), and whether it is tainted advice.
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Old 09-22-2013, 01:54 PM   #48
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This week wife and I are going to meet with FA about an analysis of social security, how to maximize that. This is meeting #2, when we get the 'free' report.

It's very apparent to me that he is increasing the sales pitch each step of the way.

Why do this if I have no intention of using the paid services? Actually, I capture the experience and send it to AARP. After a dozen free dinners or so with various FAs, decided to go to next step to glean more understanding of how investors get hooked. I'm really curious about the free analysis, and what value it provides.

This brings me to the heart of discussion, namely, the FA should disclose to you where he has a vested interest. It would then be up to you to determine how extensive his profit is on the product(s), and whether it is tainted advice.
Well my experience is most will disclose the minimum. They will provide the prospectus, it includes the fees. What they don't disclose is what you could buy the same product on your own.

My DF went to a FA(DF has done DIY with Fidelity for 25 years). This is FA puts him in Pimco Total Return fund. I know the fund from my 401k, think I pay .46 ER. So I'm not concerned. Then I review what my DF signed up for, and same fund different class. DF signed up for a 1% 12b1 fee, a 1% trailing sales fee(for 1 year), and the fund has a .66 ER. So his annual expenses are 1.66%( forget the trailing sales fee as it's 1 year only). Now I go to Fidelity, DF could have bought the same fund for .46 ER, it's not in Fidelity NTF so tack on $75. DF bought a six figure amount that was a one time buy.

Did the FA disclose fees yes, did he inform DF what he could have done, No.

Thats been our experience. YMMV.


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Old 09-22-2013, 05:53 PM   #49
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Well my experience is most will disclose the minimum. They will provide the prospectus, it includes the fees. What they don't disclose is what you could buy the same product on your own.

My DF went to a FA(DF has done DIY with Fidelity for 25 years). This is FA puts him in Pimco Total Return fund. I know the fund from my 401k, think I pay .46 ER. So I'm not concerned. Then I review what my DF signed up for, and same fund different class. DF signed up for a 1% 12b1 fee, a 1% trailing sales fee(for 1 year), and the fund has a .66 ER. So his annual expenses are 1.66%( forget the trailing sales fee as it's 1 year only). Now I go to Fidelity, DF could have bought the same fund for .46 ER, it's not in Fidelity NTF so tack on $75. DF bought a six figure amount that was a one time buy.

Did the FA disclose fees yes, did he inform DF what he could have done, No.

Thats been our experience. YMMV.


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12b1 fee....I thought that curse words were not allowed on this forum
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Old 09-22-2013, 10:13 PM   #50
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Wds, if your FA is qualified and trained in comprehensive financial planning rather than in sales, he or she should be able to provide the specifics you've asked about regarding questions outside the investing-specific realm.

If he isn't, then a consult with a fee only planner would be well worth your time and they can also review your entire financial plan at the same time,including tax and estate concerns.

Try to remember, my DIY friends, you aren't always in the same moccasins as other, equally bright posters to our fine forum. If they find value in their financial advisors, spiffy BMWs, or whatever, all is still right with the world.
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Old 09-23-2013, 09:52 AM   #51
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I don't understand. In what way are you 'taking the high road' with that comment?

And I am still curious about my earlier question - what is your basis for being 'happy' with your FA? How do you come to that conclusion?

-ERD50
The high road response was not directed at you but rather another post. Bad job on my part.

I came to that conclusion over several years based on how I was treated, the advice I received, and the overall performance of the portfolio.
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Old 09-23-2013, 01:18 PM   #52
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The high road response was not directed at you but rather another post. Bad job on my part.
No problem at all. But I would be interested in your response, regardless of who the comment was directed at.

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I came to that conclusion over several years based on how I was treated, the advice I received, and the overall performance of the portfolio.
Since the mods have made a couple warnings here, and I'm not sure who they were directed at, I'll hold off on an attempt at a constructive comment on this, unless you specifically request the feedback.I'm just trying to stay out of trouble.

-ERD50
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Old 10-05-2013, 09:56 AM   #53
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I actually did some analysis of my SS withdraw scenario analysis. This is for my data only and not for DW, yet.

What I did is first look look at all the SS taxes I paid over the years and deflated them into 2013 dollars.

Then I projected what SS taxes in 2013 dollars I will pay year by year between now and when I FIRE. This is easy since the SS tax cap is indexed by inflation so it is just equal to 2013 SS taxes every year I continue working.

I then went to SS web site and extracted what my benefits would be if I start withdrawing when I am 67 or 70.

Then I took 70% of the number to take into account the fact that SS will run out of funding and would be funded at 78% after 2033. I figured that 70% would be a conservative number.

Then what I did is a simple dollar and time weight ROI calculation. Since I am doing everything in 2013 dollars then my Rate of return would be in after inflation terms.

Then I tried various scenarios of when I stopped getting SS benefits which would represent what age my death would be.

This is what I got

Age of With With
Death at 70 at 67

95 2.9% 2.4%
90 2.5% 2.1%
85 2.0% 1.6%
80 1.3% 0.9%
78 0.8% 0.6%
77 0.5% 0.4%
75 0.0% 0.0%

So for me with these assumptions 75 is the break-even age. This means if I plan to live past 75 then I am better of delaying SS until age 70.

Note for me pretty every year I paid SS taxes I paid the max. But I will end up paying SS taxes for 22-23 years whereas SS calculates benefits based on a 40 year average of such a total. So such a calculation would lead to a medium sort of result in terms of benefits.

For my DW, note it is the same thing, she would have worked 17-18 years before she will join me in FIRE. Every one of these years, like me, she maxed out SS tax. But since the average is over 40 year average she will be considered "lower income" than myself so the ROI should be better. And it is.


Age of With With
Death at 70 at 67

95 3.3% 2.8%
90 3.0% 2.5%
85 2.5% 2.1%
80 1.7% 1.4%
78 1.2% 0.9%
77 0.9% 0.7%
75 0.2% 0.2%

I guess same is with her as myself, if she expects to live beyond 75 then she is better of with starting SS withdraw at 70.

When I did my estimates for post-FIRE future, I pretty much assumed our ROI in assets are around 1% greater than inflation. Looks like if my DW and I live beyond 80 then SS would have given us an return better than my assumptions on our other assets.
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Old 10-08-2013, 12:04 PM   #54
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kmt1972,
It seems to me that the amount of SS received is only one component of the more important question: "What will my portfolio value be at various ages in the future?" (The longer one delays taking SS, the more one has to deplete their retirement portfolio). Have you done any calculations on this question?
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Old 10-08-2013, 12:45 PM   #55
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I suggest that you check out Quicken Lifetime Planner and run through the screens.
Is QLP a part of the Quicken Starter Edition or only the Deluxe Edition?
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Old 10-09-2013, 12:35 AM   #56
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Is QLP a part of the Quicken Starter Edition or only the Deluxe Edition?
Deluxe edition and higher
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Old 10-09-2013, 01:49 AM   #57
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Thanks, I couldn't even find a reference to it on the Intuit site.
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Old 10-13-2013, 04:03 PM   #58
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kmt1972,
It seems to me that the amount of SS received is only one component of the more important question: "What will my portfolio value be at various ages in the future?" (The longer one delays taking SS, the more one has to deplete their retirement portfolio). Have you done any calculations on this question?
Good point. I should factor that in as well. Since my assumptions is that assets which I might draw earlier from if I take SS at 70 as opposed to 67 are based on a post-inflation return of 1%, a more conservative cutoff should be when I am 79 and 77 for DW. That is when the return on SS for withdraw at 70 matches 1% post inflation.
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