Considering throwing in the towel and going with a CFP

[jazz4cash]

Quote:

Originally Posted by Sunset OP - you have confused yourself. You need to change brokerages, not change which fund you own at the same old brokerage, its like moving your money to a new bank. You need to transfer your account or part of it "IN KIND" to vanguard.com You do that by phoning up vanguard.com and tell them you want to open an account and transfer your assets "IN KIND". They will do all the work, Fidelity might phone you to confirm its true in a few days. Then you can buy/sell Wellington etc funds for free at vanguard. And you can set up a withdrawal amount as others have said.

I don't agree with this at all...at least not until OP is certain that Fido cannot satisfy his needs. At this point it looks like Fido may be able to do this.
No need to rush into anything, and I favor Vanguard but Fido has done an excellent job with my workplace savings and they do have plenty of investor centers in my area. Also, since these are 401k funds, I do not believe the "IN KIND" transfer would apply.

[rbmrtn]

Quote:

Originally Posted by hnzw_rui The $75 transaction fee for Vanguard funds was kinda bugging me so I checked the Fidelity Puritan FPURX fund that has been suggested as well as other no transaction fee balanced funds. Also, I can't seem to find where it says you only pay when you buy and it's free to sell.

It's in their fee schedule here, https://www.fidelity.com/bin-public/...e_Schedule.pdf

[FANOFJESUS]

I think the wellington is open if you buy it at vanguard.

[Bestwifeever]

Quote:

Originally Posted by Sunset OP - you have confused yourself. You need to change brokerages, not change which fund you own at the same old brokerage, its like moving your money to a new bank. You need to transfer your account or part of it "IN KIND" to vanguard.com You do that by phoning up vanguard.com and tell them you want to open an account and transfer your assets "IN KIND". They will do all the work, Fidelity might phone you to confirm its true in a few days. Then you can buy/sell Wellington etc funds for free at vanguard. And you can set up a withdrawal amount as others have said.

This is exactly what we did when DH rolled his 401k over into an IRA--called Vanguard and they took care of it. DH rolled the entire amount to Vanguard but you can just do part of it. And one of my two rebalancing moves was a few months ago to Wellington Admiral so I agree that it apparently is open to Vanguard accounts. Not that Vanguard or its funds are necessarily better or worse than Fidelity etc., they just work simply and nicely for us. We pay no fees beyond what the funds themselves carry.

[Cheesehead]

The Expense Ratio difference between Wellesley and a similar fund at Fidelity such as the Asset Manager 40 is a quarter of one percent, so for $1 mil that would be a savings of $2500 a year.

What I am starting to understand is that it would be better to transfer my 401K and IRA to Vanguard? I do like the brick and mortar aspect of Fidelity, we have a local office and the free FA person is great. But as I look into it I would like to also have access to Wellington and make sure I can get monthly or quarterly checks from Vanguard without it passing through, or being charged by Fidelity.

Thanks all for your advice!

[braumeister]

Quote:

Originally Posted by Cheesehead What I am starting to understand is that it would be better to transfer my 401K and IRA to Vanguard? I do like the brick and mortar aspect of Fidelity, we have a local office and the free FA person is great. But as I look into it I would like to also have access to Wellington and make sure I can get monthly or quarterly checks from Vanguard without it passing through, or being charged by Fidelity.

It doesn't have to be all or nothing. Transfer whatever you like to Vanguard and use their funds and services. But also keep whatever you like at Fidelity and take advantage of their local building and people.

[Another Reader]

First, there may be a transfer fee for each account you transfer, not for each $1,000.

Second, there are many low cost options at Fidelity that are competitive with Vanguard. I find the customer service at Fidelity to be far superior. If you want to buy Vanguard Wellington, you can do it through Fidelity, although there would be a one-time fee of $75 for the one purchase.

For estate planning, you are far better off with a qualified estate planning attorney than a financial planner. Fidelity offers some estate planning assistance, but the planning is too important not to use the most competent professional available, in my view.

I would never use a CFP to run my money. I tried that route once, got generic planning advice, mediocre investments, and high fees. Haven't looked back since I fired the guy.

[dand76]

OP - if interested, here is the link to setting up automatic withdrawals at Fidelity:
https://www.fidelity.com/cash-manage...ic-withdrawals


and a link to their target date funds
https://www.fidelity.com/mutual-fund.../freedom-funds


You should have an advisor assigned to your account that will assist with a lot of things as no cost.

[Walt34]

Yet another Vanguard suggestion:

https://personal.vanguard.com/us/fun...FundIntExt=INT

The managed payout fund has a fee of 0.42% which for them I think is a bit high (maybe I'm spoiled by the index fund fees) but it is a set-it-and-forget-it solution.

Quite a bit better than 1.5%.

[NanoSour]

To the OP, you are about to venture in to what is really a set it and forget it adventure. Think about this, you finished high school, maybe college, worked an entire life, AND saved $1M to boot. Setting up your distribution of these assets is a piece of cake compared to what you've already accomplished in life.

I'm wondering if you forgot to take your medication…. JK

[bingybear]

Quote:

Originally Posted by Sunset OP - you have confused yourself. You need to change brokerages, not change which fund you own at the same old brokerage, its like moving your money to a new bank. You need to transfer your account or part of it "IN KIND" to vanguard.com You do that by phoning up vanguard.com and tell them you want to open an account and transfer your assets "IN KIND". They will do all the work, Fidelity might phone you to confirm its true in a few days. Then you can buy/sell Wellington etc funds for free at vanguard. And you can set up a withdrawal amount as others have said.

I can't tell if the OP has any of the fido accounts in vanguard funds from this thread. And if he does, what % of his funds. I agree if he has all his stuff, then move to vanguard.

Looking at the OP responses, it does look like they would benefit from some hand holding at to get things understood. The OP seems flustered with the volume of ideas and questions being posed.
A really simple portfolio at any one of the major low cost brokerages would likely do them well.

[Animorph]

My retirement portfolio is the same as my pre-retirement portfolio. I just sell some shares when I need the money. You can do that once a year if you don't want to bother with it.

Wellesley looks like a reasonable option, even through Fidelity.

"1. Transaction Fee:

A transaction fee is similar to a brokerage fee or commission which you pay when you buy or sell a stock. For some funds available through Fidelity you are required to pay a transaction fee. However, you will not pay a sales load on Transaction Fee (TF) funds. You will only be charged a transaction fee when you buy a FundsNetwork TF fund, not when you sell one. All other fees and expenses described in a fund's prospectus still apply. You can choose to buy or sell shares directly from the fund itself or its principal underwriter or distributor without paying a transaction fee to Fidelity.

Online Transaction Fees: $49.95 for most funds. Certain funds will have a transaction fee of $75. To identify any applicable transaction fees associated with the purchase of a given fund, please refer to the "Fees and Distributions" tab."

A one-time $75 to buy your shares and then nothing to sell them. That should pretty much be a one time cost.

I have my mom in these funds at Fidelity:
25% FUSVX S&P500 index
25% FSEVX Total US Stock Market except S&P 500
25% FSGDX All World except US
25% FSITX Bonds

At RMD time we just sell whatever has more than the 25% target value. But nothing automatic has been set up.

You might consider a one time consultation with a fee-only FP to set up the rest of your non-investing financial planning. Hardly anything requires yearly monitoring.

[petershk]

Cheesehead:
First grats on having the guts to put it out there.

My investments have also kind of sucked this year and it makes me question similar ideas.

There's also a ton of great suggestions of how to get decent returns at low costs and probably any of them would over the long run get you to your 3% swr.

I see your problem as different. You mentioned early in your DW gets nervous when the account goes down. That's a huge problem... If your motication is to never see it go down you're either falling for a ponzi scheme or you're getting way less than 3%/yr.

So you have to get your DW to understand that. I know easier said than done.

Second... The entire financial industry is based on toll bridge transactions. You walk around with a million bucks asking people if they can help you with it and they will be the nicest person in the world. It's 99% BS. So you have to look at your 1m as a historically safe 30-40k/yr job that you don't have to work at. So the way to calculate the value of a financial professional is to subtract their cost from 30k/year... Not from 1M.

My thought is never to pay more than about .3%. If it's more I'd rather pay someone hourly. It's statistically impossible for an FA to beat the market by 1.5% annually with near 0 volatility. If the FA is offering other services... Those should likely be per hour on demand.

It's way easier for them to change a fee and convince you why that's so cheap and how safe you'll feel and how much happier you'll be because you're not worrying anymore. But would you cut your pay in half at work to not worry about how to spend your income? I sure wouldn't.

The most you should pay for total management is probably around 3k/year. That should include taxes, estate planning, investment advice... Anything that involves managing that 1m. More than that and the costs eat into your income so much they can't overcome the impact.

Third... You are approaching your investment income stream based on need and not what it can do. Just because you need a smooth 30k/year from 1m doesn't mean the market will give it to you . So really you have to consider volitility and flexibility which are personal choices.

Personally in targeting something like this:
33% VTI
33% VXUS
34% BND

That has about a 2.4% yield right now which is most of the way to 30k. Of course the market could drop 50% next year or next month or it could double next year.

The other thing I'm doing is keeping 2 years in cash in ally returning 1%. I like this more than current short term bond funds. My rationale is if the market tanks I have 2 years to live worry free which is historically fairly safe. You can extend that to 3 or 4 and use it to get your DW less nervous. So lets say you have 900k, you can still get around 22k/year in dividends fairly reliably and now you have 3 years of cash.

If you get to year two and the market is still crashed you can then give yourself 1 year to find a replacement for the caahflow you need... Even if it means getting a job. If it gets worse than that I guess we can all hang out together on the bread line talking about the failed theory of SWR.

So I think
1) give yourself a time buffer to help your DW rest easy and not look so closely at returns
2) put a hard cap on what % of your 30-40k income you're willing to pay anyone to keep the rest
3) find the simplest investment strategy you feel comfortable with and then forget about it except once a year
4) pay hourly for tax, estate, legal advice but only after you come here and get it for free

Good luck!

Sent from my HTC One_M8 using Early Retirement Forum mobile app

[ETFs_Rule]

Quote:

Originally Posted by Cheesehead After listening to a weekend morning AM radio show that he hosted, I imagine it was purchased infomercial time, I met with a CFP that has impressed me, for I am highly cynical and suspicious of that industry. This CFP was an exec in the wealth management department of a major insurance company and went on his own in 2006. We are two or three years from retiring and are in good shape with a pension and SS and as for our nest egg of about one million, I need that to throw off about $30K a year. I understand how to invest and grow, but my brain ain’t big enough to figure out the consistent retirement income stream aspect such as dividends, bond ladders and such. However…unlike the majority of folks on this board, I don’t care to do it myself and I don’t want to go with an annuity. His is a six person office that teams with several other wealth management firms and they pool their clients’ assets of $1.2 billion in a firm titled Capital Asset Advisory Services. The way he explained it, by pooling their assets they get a better deal from TD Ameritrade. The annual fee would be 1.5% and I would get a quarterly check based on the 4% Rule which we will probably bring down to 2.5%. We are conservative investors. What I like about the arrangement is that our funds will be with TD Ameritrade so he does not have possession, we would transfer our 401K and 403b from Fidelity. I like that aspect because I trust no one. but the problem is how to convert this into a regular income stream, minimizing taxes, without turning to annuities. That is what I tried to learn how to do and I think I have given up!

Do you know the difference between a fiduciary and a non-fiduciary?
Do you know the difference between a fee-based and a fee-ONLY adviser?
Do you know the difference between an "asset manager" and someone who does 1 time or 1 task consultations to help you come up with a "game plan"?
I can tell you that finding someone trustworthy has NOTHING to do with certifications like CFP. Unfortunately this is how commission-based salesmen gain people's trust. They pretend to host a "radio show" that is really an infomercial, they gain your trust by flashing certifications and then they proceed to scare you by talking about a stock market crash while completely ignoring diversification into bonds.
STAY AWAY from these sharks!!!
Free and unbiased investing advice

How hard is it to invest in a low risk portfolio of super low cost index funds? Investing is easy. I own mainly 2 index funds: VOO (S&P 500 index) and AGG (total US bond market index).
If you want even lower risk then you could add XLP (consumer staples index) on the stock side and maybe IEI (3 - 7 year bond index) on the bond side (less interest rate risk).
If you aren't generating enough dividend income then you simply sell off a portion of your principal. Is that difficult?

The only thing you need to decide on is bond / stock allocation ratio.
https://personal.vanguard.com/us/fun...ion?reset=true
http://www.vanguard.com/nesteggcalculator

[Senator]

You should be able to negotiate the fees for the financial adviser down to less than 1%.

Then, only put 1/2 of your money with the financial adviser. You will still get all the other services they offer.

Invest in a blended fund, or an S&P fund with the rest.

[Turn_the_Page]

Love the reservoir analogy! For me, I would add that I'll have two-three years worth of withdrawals sitting in my water tower (cash) all the time. I'll just refill the water tower from the investments as needed, never exceeding my WD maximum. (I'm not quite retired yet)

I think the challenge with the planners is that they want to make it look so difficult. Otherwise, why do you need them?

[Cheesehead]

I spoke with Vanguard and all in all, it would be better to transfer the Fidelity 401K and IRA to them and get monthly checks from Wellesley (the other payout funds are too high), based on 3%. Wow, their expense ratios are much lower than Fidelity! Kind of scared putting it all in one fund but when I look at their performance stats based on me having 10-12 positions, they obviously know what they are doing. I will do it in three major transfers to get my feet wet. The one sticky point is the average duration of their bonds is 9.5 years which is scary when interests rate rise.

I am loving the new Fidelity online interface though, must see if V is as user friendly. At first blush their website doesn't seem as easy to use.

When I think of retirement I envision not having to deal with all this number crunching, AA monitoring anymore, I just want to have the money from the three legged stool flow into our checking account and then our only responsibility is to live within our budget and do what you're suppose to in retirement: ENJOY THE REST OF ONE'S LIFESPAN! If I have to spend more than one hour a month on this that would be too much.

Thanks for everyone's advice. I don't need a CFP except for perhaps an annual hourly session.

[DayDreaming]

Quote:

Originally Posted by Cheesehead ... I am not good with numbers as many of you are here, especially the two CPAs, to me crunching numbers would be like a root canal for you. Plus...I don't like spending much time in front of a computer screen strategizing, and by looking at the number of posts many gurus here have, it seems people spend a lot of time on their computer. That would not be my idea of a nice retirement! I also have a DW who, if I lose money, get's quite PO'd. We are conservative and our AA is 40/60. ... It just seems to me, when I visit this board, that most of you regular posters are on the Expert level, so what seems a no-brainer to you is hard for folks that don't actively monitor their portfolio and trade, plus suck at math. ...

I'm often amazed at the level of knowledge some people here have regarding finances. It's intimidating sometimes - I post a question about something I think I have a pretty good handle on, and I get a load of responses that remind me just how much I don't know.

But, I've come to realize that even if I don't pick that absolute optimal solution for my particular financial problem, that I've learned enough that I can pick a pretty darn good solution.

And for me, it's important that whatever financial plan I choose, that I understand it. That is, I'm not just doing it because someone told me it's the right thing to do. I'm doing it because I understand how it works, and what the risks are. There are some good sound investment principals that are pretty easy to understand and to implement, and that don't require a lot of your time. So maybe it won't be the absolutely most tax efficient plan if I live to the age of 97, but it's still a good plan and I understand it will work good for me.

[Texas Proud]

Quote:

Originally Posted by Cheesehead I spoke with Vanguard and all in all, it would be better to transfer the Fidelity 401K and IRA to them and get monthly checks from Wellesley (the other payout funds are too high), based on 3%. Wow, their expense ratios are much lower than Fidelity! Kind of scared putting it all in one fund but when I look at their performance stats based on me having 10-12 positions, they obviously know what they are doing. I will do it in three major transfers to get my feet wet. The one sticky point is the average duration of their bonds is 9.5 years which is scary when interests rate rise. I am loving the new Fidelity online interface though, must see if V is as user friendly. At first blush their website doesn't seem as easy to use. When I think of retirement I envision not having to deal with all this number crunching, AA monitoring anymore, I just want to have the money from the three legged stool flow into our checking account and then our only responsibility is to live within our budget and do what you're suppose to in retirement: ENJOY THE REST OF ONE'S LIFESPAN! If I have to spend more than one hour a month on this that would be too much. Thanks for everyone's advice. I don't need a CFP except for perhaps an annual hourly session.

Well, congrates on making a good decision and saving a boat load of money....

If you do not like the duration of the bonds in Wellesley, then put a percent of your money in a ST bond fund and have your monthly check taken out of there.... you can put 10% (or even 20%) of what you own there and rebalance once a year....

[Midpack]

Quote:

Originally Posted by Cheesehead I spoke with Vanguard and all in all, it would be better to transfer the Fidelity 401K and IRA to them and get monthly checks from Wellesley (the other payout funds are too high), based on 3%. Wow, their expense ratios are much lower than Fidelity! Kind of scared putting it all in one fund but when I look at their performance stats based on me having 10-12 positions, they obviously know what they are doing. I will do it in three major transfers to get my feet wet. The one sticky point is the average duration of their bonds is 9.5 years which is scary when interests rate rise.

Wellesley holds 60 relatively safe equities, and 821 bonds - that's plenty of diversification, really no need to be scared. Especially as the portfolio is only one of three sources of income for you (after Soc Sec & your pension). Relax, you're in really good shape.

And their average duration is 6.4 years, the figure you noted is maturity.

https://personal.vanguard.com/us/fun...tExt=INT#tab=2

No one needs a CFP at 1.5% per year!