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Old 10-19-2015, 06:32 AM   #21
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I really do not want to manage my own retirement buying and selling!
I don't think we can help you.
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Old 10-19-2015, 07:11 AM   #22
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Originally Posted by robertf57 View Post
Being a conservative "safe" investor should not require any contact with your investment daily or even weekly. It isn't rocket science and actually, probably the less you mess with a low cost diversified portfolio, the better your returns.
+10, perhaps that is part of the required learning, hopefully from other's histories and not having to reinvent the wheel.
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Old 10-19-2015, 07:34 AM   #23
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I understand your wishes, but I would still consider moving to a firm like Fidelity. You could easily set up a ladder of Cd's and put a portion in a balanced fund. Not much managing to do at all. You can even set up auto w/d to your checking acct. No way im paying 5k a year on fees when you can set up plan that is pretty much on auto pilot.
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Old 10-19-2015, 08:23 AM   #24
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I am not concerned as much about the fees (tax deductible) as I am the market going crazy and loosing a lot of money. ...
But you should be. You really should be.

One rule-of-thumb is that it is relatively safe to draw 4% annually (*1). If you are paying 1% (*2) to an advisor, that means that 1/4 of your cash flow is gone.

So another way to look at that is, it would take an additional 1/3rd in assets to get you back to your 4%. So you need a $666,667 portfolio with a 1% fee to provide the same income as a $500,000 portfolio without the fee. So you have 'lost' $167,667 to your advisor. And if you stay with them, you never get it back. A diversified portfolio may dip, but they tend to come back.

(*1) - but this also is based on a diversified portfolio, including equities

(*2) - and you are probably paying more, because typically the investments those managers put you in have their own high expenses built in, their "Expense Ratio"


Quote:
Originally Posted by robertf57 View Post
Being a conservative "safe" investor should not require any contact with your investment daily or even weekly. It isn't rocket science and actually, probably the less you mess with a low cost diversified portfolio, the better your returns.
or even monthly. As a matter of fact, you might not even need to look at it annually. Have any divs, interest, cap gains auto deposited to a checking/savings account, and get on with your life.


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... I really do not want to manage my own retirement buying and selling! ...
It is often said here, the hardest thing about managing your own portfolio is to understand how simple it is. You could put it all in a Target Retirement fund, collect the distributions as I outlined above, and simply forget about it. Other than the initial transfer (which a place like Vanguard or Fidelity will assist you with), there is no 'buying and selling'.



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One penalty that I do not want to incur is if I lose my ACA supplement that is based off of my yearly income. If I move money into a savings account it would stop this supplement. Right now I would love to be able to remove $5k for a down payment on a car, but I don't want to incur the hit from ACA.
OK, I see that this is in an IRA, so any withdraws are taxable. But transfers within the IRA are not a taxable event. But that applies regardless of how it is invested.

-ERD50
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Old 10-19-2015, 08:30 AM   #25
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....Due to us (wife & myself) doing a lot of traveling in our RV managing something myself would be impossible. A lot of time we may not have phone or internet for days or weeks.
Not a concern... I rebalance once a year.... takes less than an hour.
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Old 10-19-2015, 08:53 AM   #26
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My money is with Wells Fargo Advisors which used to be A. J. Edwards. They have made me a lot, but this year has been bad. I have already contacted my advisor for any more balanced/safer options.
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Old 10-19-2015, 09:55 AM   #27
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I have already contacted my advisor for any more balanced/safer options.
Stand by for an annuity sales pitch.
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Old 10-19-2015, 10:09 AM   #28
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Stand by for an annuity sales pitch.
Yep, that, and/or a 'chasing performance' scene.

Oh, that investment is down? Let's sell, and switch to this other super-duper investment that has been doing great (hey, I though the other investment was 'super-duper' when we bought it?)!

Sell low, buy high. Rinse, repeat. Advisor collects fees. Investor loses all around.

These threads play out in one of two ways, from what I've seen:

A) The OP gets mad at everyone, and never comes back.

B) The OP keeps listening and learning, eventually dumps the advisor, and later tells us how he can't believe he was paying all those fees for all those years for substandard performance, when DIY is so simple, and provides better returns.

Which will this be?

-ERD50
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Old 10-19-2015, 11:08 AM   #29
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OP, you've received some excellent advice. You simply don't need a so-called financial advisor, and you certainly don't need to be dumping $5,000 a year, $50,000 every ten years, $100,000 every 20 years, down the drain so that your advisor can retire comfortably.

OP, in looking back over your earlier posts, it was exactly two years ago you were discussing this subject and the fees taken by your advisor. You were told then by many that you were being gouged and you needed to part ways with this individual or firm. You need to listen to this advice. We don't know how many different ways to say it - run from this guy! He is making more from the portfolio than you are.

Invest your $500,000 in the Vanguard Retirement Income Fund, pull $20,000 a year out of it to live on, hop in your RV and enjoy life without giving your investments another thought.
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Old 10-19-2015, 11:38 AM   #30
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I am not concerned as much about the fees (tax deductible)
You only benefit from this deduction if:

1. Itemized deductions, and the benefit is limited to that portion that exceeds your standard deduction, and

2. you only get to count the investment expenses (along with income tax preparation, unreimbursed business expenses, other misc deductions) to the extent that the total exceeds 2% of your AGI.

Otherwise, it is a pure expense not helping your tax situation.
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Old 10-19-2015, 11:47 AM   #31
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You only benefit from this deduction if:

1. Itemized deductions, and the benefit is limited to that portion that exceeds your standard deduction, and

2. you only get to count the investment expenses (along with income tax preparation, unreimbursed business expenses, other misc deductions) to the extent that the total exceeds 2% of your AGI.

Otherwise, it is a pure expense not helping your tax situation.
RE2Boys is correct. My guess is you get absolutely no tax benefit from this expense based on the facts you've given. I suspect the advisor has told you this in an attempt to soften the impact of his fee. Get rid of him.
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Old 10-19-2015, 11:51 AM   #32
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I have that plus another hotspot. The issue is we stay a lot a state or national parks which are to far away to receive any dependable phone or internet service. I really do not want to manage my own retirement buying and selling!
We get out money from our Vanguard account. It requires very little buying and selling. You can set up in advance monthly transfers for money you need to live on (or at whatever interval you want).

I occasionally rebalance which is about once a year.

That's it in terms of buying and selling.

So, set up the automatic transfers. Rebalance as needed. It is really super easy and, when done right, doesn't involve much buying and selling.
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Old 10-19-2015, 12:57 PM   #33
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OP, your best bet would be to dump WFA, move your money to Vanguard and invest it in their Wellesley Income Fund and set up a monthly automatic withdrawal to the bank account you use to pay your bills with. Since Wellesley is a balanced fund, they do the rebalancing for you. Set it and forget it.

The expense ratio is 0.25% or $1,250 a year on $500k vs today you're paying that 1% management fee plus fund expenses that are probably much higher than 0.25%. You'll probably save $8,750 a year on expenses alone.

Wellesley has had a bad year as well.... they are only up 1.32% YTD as of last Friday but their 3, 5 and 10 year returns are 5.47%, 7.36% and 6.72% respectively.
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Old 10-19-2015, 01:12 PM   #34
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Due to us (wife & myself) doing a lot of traveling in our RV managing something myself would be impossible. A lot of time we may not have phone or internet for days or weeks.
That's not a problem, that's a feature.

All the investment books I've read say that the best thing to do is set up your asset allocation and rebalance, at most, quarterly. Most say once per year is fine.
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Old 10-19-2015, 04:13 PM   #35
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I just noticed that the OP went through a similar exercise here a couple of years ago, but didn't share what his adviser told him then or now.

Fees Taking a Third of Profit ?

I think we're heading down the same path.
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Old 10-19-2015, 04:26 PM   #36
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I just noticed that the OP went through a similar exercise here a couple of years ago, but didn't share what his adviser told him then or now.
I pointed this out in an earlier post. He seems to be rehashing the same discussion that he posted exactly two years ago. I'm afraid he is fearful of leaving this guy and it's sad to see him wasting $5,000 a year out of his rather limited retirement fund.
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Old 10-19-2015, 05:35 PM   #37
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I pointed this out in an earlier post. He seems to be rehashing the same discussion that he posted exactly two years ago. I'm afraid he is fearful of leaving this guy and it's sad to see him wasting $5,000 a year out of his rather limited retirement fund.
Bruce
Oh my! I guess I'll need to add an option "C" to my list:

Quote:
Originally Posted by ERD50 View Post
Yep, that, and/or a 'chasing performance' scene.

Oh, that investment is down? Let's sell, and switch to this other super-duper investment that has been doing great (hey, I though the other investment was 'super-duper' when we bought it?)!

Sell low, buy high. Rinse, repeat. Advisor collects fees. Investor loses all around.

These threads play out in one of two ways, from what I've seen:

A) The OP gets mad at everyone, and never comes back.

B) The OP keeps listening and learning, eventually dumps the advisor, and later tells us how he can't believe he was paying all those fees for all those years for substandard performance, when DIY is so simple, and provides better returns.

Which will this be?

-ERD50

C) The OP doesn't listen to anyone, and comes back and asks the same questions again years later.



-ERD50
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Old 10-19-2015, 06:28 PM   #38
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I have that plus another hotspot. The issue is we stay a lot a state or national parks which are to far away to receive any dependable phone or internet service. I really do not want to manage my own retirement buying and selling!
Assuming you occasionally have to buy grocieries at a grocery store that does imply going to a nearby town. It seems today that most towns big enough for a reasonable grocery store either have an internet cafe or a library with internet access. In addition once in town the cell phone will work in most cases (you may have to look at coverage maps a bit to decide which carrier. In addition over 11k mcdonalds have wifi now. As others have stated you should not have to check on things more than once a month or so, in particular if you pick index funds or target date funds. One might ask further how you get your mail on the road, as you can still get statements by mail.
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Old 10-20-2015, 04:06 AM   #39
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Yep, that, and/or a 'chasing performance' scene.

Oh, that investment is down? Let's sell, and switch to this other super-duper investment that has been doing great (hey, I though the other investment was 'super-duper' when we bought it?)!

Sell low, buy high. Rinse, repeat. Advisor collects fees. Investor loses all around.

These threads play out in one of two ways, from what I've seen:

A) The OP gets mad at everyone, and never comes back.

B) The OP keeps listening and learning, eventually dumps the advisor, and later tells us how he can't believe he was paying all those fees for all those years for substandard performance, when DIY is so simple, and provides better returns.

Which will this be?

-ERD50
I'm guessing it's A or maybe comes back in a few years to see if the advice might be easier to swallow.
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Old 10-20-2015, 06:00 AM   #40
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I can relate a little bit to this in dealing with my mom. I've told her on several occasions that she's paying thousands of dollars to their advisor for stuff that I could set up with them for free for about 1/5th of the cost. Not interested. They are convinced the advisor has done really well for them, even after I've pointed out that he hasn't beaten SP 500 returns in the time working with them. I've said my piece with her, and repeated it several times including showing them how he's buying them into funds with loads, 3% ERs, etc. on top of his management fee. The guy's robbing them blind.

In short, some people just refuse to learn on their own about this stuff for whatever reason, perhaps because they are convinced that it's just too complicated or hard to do.

OP - you've gotten a lot of good, easy to follow advice that will save you thousands of dollars and other advice that will further MAKE you thousands more. At this point, it's up to you to take action on it.
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