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Old 08-28-2011, 09:10 PM   #21
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with a financial advisor? In other words, having a financial advisor run the numbers and confirm that your "number" will let you retire early.
What would you do if they told you to work until age 67, as Suze Orman almost certainly would?

What would you do if they told you that your asset allocation was too aggressive?

What would you do if they told you that you needed one of their innovative annuity products?

What would you do if they ran FIRECalc used a highly sophisticated financial-analysis iterative simulation algorithm to ascertain that your historical success rate would have been 92.4%? How much would you pay for that analysis?

In 2001 I chased this holy grail for three months. I called over a half-dozen local firms out of the phone book with the same question. Several of them didn't understand military pensions (COLA, cheap healthcare). Some of them felt that I needed an unacceptably high dose of high-yield bonds or even annuities to supplement my military pension and SS. Others couldn't believe that we spent as little money as our decade of budget history showed. In other words, they weren't willing to build my retirement designed for my situation. They were ready to sell me one of their pre-packaged plans to which I could adapt my own situation.

One AXA advisor accidentally helped with their checklist. By the time I'd finished assembling all the data they asked for, I knew I hadn't overlooked anything. When I asked the analyst what software they were using for this projection of retirement success, he described something less capable than the current version of FIRECalc. Then he shot himself by saying that in six months they'd be upgrading to something even more whiz-bang. I replied that they should give me a call in six months.

If you've been tracking your expenses then you have a pretty good handle on your retirement budget. Even more importantly, you can tweak your expenses over dozens of scenarios to see what various spending levels will do to your projected success rate. If you're concerned about FIRECalc's historical applicability then spend the few bucks for a membership in FinancialEngines.com to run their extremely detailed calculator, or go with Otar's calculator, or buy a copy of ESPlanner. You'll be able to do a lot more "what if" for a lot less money, and you'll feel that you've purchased knowledge & confidence instead of sales pressure.

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If so, can you please provide advice on how to find a reliable financial advisor. Someone I can hire just to carry out this one task. Thanks,
During our extensive discussions over the last five years on the subject, we've been unable to find anyone who'd want to tackle this business. You can't hire anyone to carry out this one task because they pretty much lose money on the time spent being able to do a proper job, since most investors are not willing to spend a few thousand bucks for that time.

And as other posters have pointed out, once you've spent that few thousand bucks there's still no warranty or guarantee. You're buying advice from someone who has no more credibility than a bunch of Internet strangers, and we're giving it away for free!
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Old 08-28-2011, 09:12 PM   #22
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Would like to add, in my situation, after the "can I pull the trigger?" work done with the planner, about 5 months after that, my job situation changed (surprise, surprise, you are now outsourced..take our offer or leave it) so I had a followup visit with my planner (working on more general to more specific). At that time, retiring was something I just thought of, fantasied about when times got really bad at the office, but wasn't ready to execute yet. Was good to have someone explore with me (what about health insurance? etc. I had not heard of a thing called a HSA, until this planning) as it was pretty much a "crash course" in retirement planning. Don't know if I would had pulled the trigger or been just still a machine in the workplace had I not paid for that knowledge.

I haven't gone back to the planner since, because I'm okay with where I'm at. Plus the planner hasn't sent any "ads" like one would get from a non-fee planner.

All in all, when I had my private insurance card (the last piece to my FIRE puzzle) in my wallet, the final days I say "Say Hello to my Liddle Friend (the insurance card)" to myself knowing I was gonna FIRE
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Old 08-28-2011, 09:16 PM   #23
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We did the FA check thing, and also did estate planning at the same time. Yes the FA FIRE check was pretty much wasted money, but such a review will cover more than any forum discussion and ensure that you didn't forget anything important. It's not just investments. And it got my DW on board with more confidence. I would still recommend an FA for anyone I didn't know really well and didn't want to spend a lot of time discussing FIRE with.
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Old 08-28-2011, 09:18 PM   #24
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fwiw, at 2.67% SWR, you look very safe. There may be other reasons to see a CFP, as freebird points out, but to confirm you have enough doesn't seem worthwhile to me.

Your AA looks very good to me too. Are you going to tilt it more towards bonds as you get older?

Once retired, look at converting a portion of your IRA (I assume you'll move you're 401K to an IRA) to a Roth IRA. You probably knew that, with all of the reading and research you've been doing.

Congrats!
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Old 08-28-2011, 09:39 PM   #25
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A few years before I retired I did what you are proposing - paid a fee only financial planner to look at my portfolio and get a professional opinion on where I thought I was - which was on the road to FIRE and approaching the finish line. I got confirmation but I didn't learn much that I hadn't already been exposed to on the old Motley Fool forums and here.

It made me feel good at the time to have a third party agree I was on track, but in hindsight I don't think it was money well spent. As others have said, you can do just as well - maybe better - by using the resources available at Bogleheads, here and on a handful of other online resources.

No need to spend the money.
I did it the same way, except I got the service for free from the FA that my pension system has for members. It was a new service and the man had been there about a year or less, and all I knew about him was that everyone loved him. Of course it seemed like everyone that talked to him was told, "your numbers look good and I think you can retire whenever you want."

I thought my numbers were good, that I had identified all the alternatives and potential problems and had a plan that was as bullet proof as could be expected - and that worried me. The fact that he found nothing wrong with either my plan or the assumptions it was based on worried me even more. I was sure that I wasn't that smart, so he had to be dumb if he couldn't see the mistakes that had to be there.

It turns out that my plan has been working for well for 7 years now, and even weathered the Great Recession thingie just fine. The FA is still on the job and I've gotten to know him well enough to realize he's good at his job and his philosophy is consistent with the general tone found on this board (he strongly advocates LBYM to all his clients).

So, I didn't learn anything I didn't already know and it didn't help my confidence much - but at least it was free!
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Old 08-29-2011, 09:48 AM   #26
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Originally Posted by Hiredgun View Post
with a financial advisor? In other words, having a financial advisor run the numbers and confirm that your "number" will let you retire early.

If so, can you please provide advice on how to find a reliable financial advisor. Someone I can hire just to carry out this one task. Thanks,
I was looking for the same advice about a month or two ago. Decided to
post the info. on these boards. Got a lot of good feedback vs one persons opinion.

good luck
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Old 08-29-2011, 10:14 AM   #27
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Thanks for the thoughtful replies. Looks like most people think it's not worth the time and $$$, and I get that. I'm trying to do the asset allocation and the investing on my own and I have learned alot from Bogleheads and books on personal finance (Random walk on Wall Street, Ray Lucia's Buckets, Work Less, Live More (Clyatt), Bogleheads Guide, etc.)

I invest mostly in Vanguard low cost funds and Fidelity for our 401Ks. I'm shooting for a 65% Overall Stocks (70% U.S. 30% Int'l (20 % of which is Emerg Mkts)) and 35% Bonds (VG Total Bond in 401Ks & Some VG Reits, VG Intermediate Munis outside 401K). I should be there within the next 2 years, leaning a bit heavy on stocks right now (80% Stocks and 20% Bonds right now). I hate to buy more munis right now, but I need to get to my ideal Asset Allocation. Although it seems stocks are the much better buy right now, I think AA is more important in the long run.

Expenses are conservatively estimated at $80,000 year after retiring. Shooting to retire in the next 24 months. End of 2013 at the latest. DW and I are 43 (soon to be 44).

I expect we will have around $3,000,000 by retirement and the Firecalc looks good. Just getting nervous and before pulling the plug would like to have additional affirmation, I guess. Also, I should have 2 years of expenses put away, so won't have to dip into the 3M until then. The only other wrinkle is about 2M will be outside of 401K and 1M will be stuck in 401K until we are the right age.

Outside of 401K is mostly stocks and munis. 401K is all bonds and a 15% Vanguard Reit fund.

Would appreciate any comments. I think we are about at the finish line, but of course there are no guarantees and doubts continue to make me fret. Thanks!
You can never be absolutely certain, but raw numbers suggest odds are you will be OK. $80K/yr expenses on a $3,000K nest egg translates to a 2.67% WR (withdrawal rate). You're younger than I realized, but I've seen some smart people suggest a 3% WR is the indefinitely sustainable WR. The 4% SWR studies are based on someone retiring at age 65 so probably not applicable in your case.

And if you have a pension, retiree health care, Soc Sec and/or other income sources (eventually), your out-of-pocket annual expenses will be $80K minus retirement income and your WR will be correspondingly lower. However, it appears you could make it with no retirement income.

I think your reading list would meet with the approval of this audience, it's a very good one IMO.

You will have to develop a spending plan to deal with your age and 401k restrictions, but that's easily doable. I still don't see why you would use an FA, but that's your call. Congrats on your status so far...
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Old 08-29-2011, 11:21 AM   #28
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I think it can be useful to talk to a financial planner of whatever type if you feel uncertain, because if nothing else it can boost your confidence that you really do have all your bases covered. I met with a guy a couple years ago (he was a salesman, so my meeting was free) and he seemed capable enough working within the system that his firm used but he didn't have anything to tell me that I wasn't already aware of. He was all about asset allocation and used some kind of modeling that was less useful than firecalc.

I was happy to spend the few hours it took to get my info together and meet with him because the experience reinforced that nobody has a guarantee, and that everything I've learned here and by reading umpteen personal finance books is enough for me and will get us where we're trying to go.
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Old 08-29-2011, 11:32 AM   #29
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There are enough anonymous financial forums that you can probably do much better than finding an advisor to check your number.

OTOH, suppose you find an advisor, you pay them to say your number is fine, then at some point in the future, you run out of money. Can you now sue them because they gave you the wrong advice? If not, then what good is getting that advice from an advisor? They would have no skin in the game and could say anything they wanted, couldn't they?
If Firecalc tells me I won't run out of money, and I do, can I sue this Board?
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Old 08-29-2011, 11:36 AM   #30
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If Firecalc tells me I won't run out of money, and I do, can I sue this Board?
Yes, but it excludes registered reps.
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Old 08-29-2011, 11:37 AM   #31
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If Firecalc tells me I won't run out of money, and I do, can I sue this Board?
Not to worry....... FireCalc has never told anyone that they would not run out of money. FireCalc can only tell you that back-testing vs. historical data resulted in zero (or 1% or 5%, etc) failures. The author is quite emphatic that there is absolutely no predictive component to FireCalc.

If you read a FireCalc output as saying you won't run out of money in the future, sue your optometrist as you have bad glasses.
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Old 08-29-2011, 11:48 AM   #32
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If you read a FireCalc output as saying you won't run out of money in the future, sue your optomitrist as you have bad glasses.
Isn't that "optometrist"??
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Old 08-29-2011, 11:49 AM   #33
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Yes, but it excludes registered reps.
And any ex car guys..........
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Old 08-29-2011, 11:52 AM   #34
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Originally Posted by Hiredgun View Post
with a financial advisor? In other words, having a financial advisor run the numbers and confirm that your "number" will let you retire early.

If so, can you please provide advice on how to find a reliable financial advisor. Someone I can hire just to carry out this one task. Thanks,
Lots of good responses already. Is it just "one task" or one question do you need answered?

- How much money do we need to retire early and do we have that much?
- What is the probability our portfolio will outlive us and is that number good enough?
- How should we allocate our investment assets to minimize the possibility of outliving our assets?
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Old 08-29-2011, 11:58 AM   #35
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Isn't that "optometrist"??

Sue him/her too!
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Old 08-29-2011, 11:59 AM   #36
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If Firecalc tells me I won't run out of money, and I do, can I sue this Board?
Yup, and you get back every dollar you paid in.

That's the same deal you get with an FA, right?
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Old 08-29-2011, 01:16 PM   #37
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The OP might also be interested in checking out something like the ES planner software--there is a simple free version of it you can test out online.

NAPFA is also a good resource if you want to do a full consult with a fee-only planner. I think it is pretty reasonable to want to get confirmation that what you know is right and you aren't missing some big (or small) element of the plan. If it helps you sleep at night to run it past someone with an education in retirement planning, I'd encourage to you consider the money well-spent.
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Old 08-29-2011, 02:27 PM   #38
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I'd use the Firecalc calculator (here) as well as the one from Fidelity. Then I'd post my numbers here and at Bogleheads. No way would I trust a single adviser, even if they do send me birthday cards.

The Fidelity calculator doesn't allow pensions and estimates Social Security. Pretty worthless.

In addition to FIRECALC, try Retirement planning: Advice, guides & calculator - MSN Money
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Old 08-29-2011, 03:06 PM   #39
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The problem I see with the OP's question is that with a 65% allocation to stocks he's got a lot more volatility to deal with than someone who's maybe 40% stocks.
So the more volatile your portfolio, the higher your trigger number needs to be...
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Old 08-29-2011, 03:28 PM   #40
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[QUOTE=westcoast;1106443]The Fidelity calculator doesn't allow pensions and estimates Social Security. Pretty worthless.
There must be different Fidelity calculators for customers who log on. The one I use is very detailed and includes everything I put into Firecalc. Maybe I'm paranoid but I get a call from Fido shortly after I update my data and rerun the numbers.
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