Once you have your "number" does anyone recommend double checking it

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Hiredgun

Recycles dryer sheets
Joined
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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.

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 like my advisor at Edward Jones. She knows me well (i.e. how conservative I am with my savings) and the monthly statements are very clear. No need for double checking.
Hiredgun said:
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,
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Hiredgun said:
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.
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I have no personal experience in this at all, but I don't see how it would be possible. Even if you could find someone you could trust, there would still be the matter of competence. Consider that pension funds with billions in assets can pay for the exclusive services of a staff of advisers, yet some doubt that the funds actually get very good advice.
 
I found mention of my number to be chumming the waters. I keep a low profile, now. My tax man said that I could FIRE. I want a better cushion.
 
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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.
 
It was having a good handle on our projected retirement living expenses, and determining our retirement income (no pensions, or annuities) would exceed that number by a comfortable margin that led us to retirement. Everyone's margin of comfort is different - ours came to +20% income over expenses, but was comfortable with less. Our retirement pathway is not absolute, and nothing in our planning strategy is sacred - should it become necessary in retirement (i.e. sale of paid-off home is not part of retirement income strategy, but would be if necessary). Found it difficult at best to allow for specific control of the unknown down the path of life. Really came down to being determined to make it work with what we have available. Hard to ask someone to verify this for you from a 50,000 ft. flyover (and who has not actually gone though what you are planning to do yourself).
 
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? :mad: 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?
 
Being a Fidelity client, I met with a Fidelity rep in early 2008 as the pieces of my ER plan were falling into place. I had begun inputting some numbers into Fidelity's Retirement Planner software but was puzzled by a few things so she finished it for me when we met.

I had not heard of this forum or Bogleheads yet but later in 2008 I discovered the lightly used REHP forum and posted some numbers in there to get some feedback.
 
obgyn65 said:
I like my advisor at Edward Jones. She knows me well (i.e. how conservative I am with my savings) and the monthly statements are very clear. No need for double checking.
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I'm sure she wants to keep you working as long as possible. After all she gets 2% and you get 2% of your SWR so you'll need twice as much. Fair enough!:rolleyes:
 
Yes, I had an Ameriprise FA give me a second opinion. I also put some funds in to garner 'extra' interest. Not sure if I am better off with that or not (different story) , but the plan is working (throwing off extra income for traveling, ...etc.).
So you could say I am a happy camper.
He (FA) wanted to give me yearly 'tune ups' (for a fee), but I kept on declining until he stopped asking (a few years ago).
I still have funds there, but I am managing them myself.
I will admit, I am probably 'sub-optimal' in my management, but I am happy with how it's going, given the current environment.

I would do it again ... but maybe through a fee only FA.
I know there is a definite anti-Ameriprise bias on this forum

in the interest of full disclosure, this year they started to charge me 20 dollars a quarter as a fee for being a 'small' customer.
 
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I had a FA "run the numbers" a few years ago. The results were very similar to what I obtained from my simple excel spreadsheet or the planner in Quicken. Not worth it IMO.
 
I wouldn't bother with an FA, broker, etc. either, they can't guarantee anything and they have a vested interest in selling you something. You can check for yourself various ways, you should find the various methods yield results that are similar enough to reassure you. FIRECALC is a great place to start as suggested above.

But there really is no right "number," whatever you calculate is just the product of many assumptions, none of which you can be completely sure of (future returns, sequence of returns, inflation, your longevity, your future expenses, future health care needs, future of your pension, future of Soc Sec, etc. - just to name some of the variables). We all have a different level of comfort, and build in a safety factor accordingly.

Many people here and at Bogleheads can give you feedback if you want but we'd have to know more which you may be uncomfortable providing. We can easily explain how to calculate based on the 4% SWR which is one of the most common rules of thumb. Best of luck, you can do this...
 
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I agree with some. No single FA can be absolutely sure, and he has some hidden motive to sell you something. We never rely on anybody and do the study ourselves. By staying in this forum, you will have a feel when you can be FI.

Ours is simple, we try to save enough that when divided to yearly stipend, can last our reasonable life expectancy. If the money earns 1-4%/year, then, the better. Inflation, we tend not to worry too much, since we are frugal and absolutely buy only what we need and on sale too.

There will always be unknowns, like your health, inflation, insurance, SS, & medicare., and how long you live. Economic cycle i.e. downturn and upturn can and should affect your spending habits.
 
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.
 
Like Fritz said, the toughest thing is to have a real handle on your expected future expenses, including things like home maintenance, vacations, car replacement, health insurance, taxes, etc. An FA really can't help you with that. The best they might be able to do is to look at your budget and identify something you missed, but most likely they will be looking at your investment side so they can find something to make a commission on. IMO it's pretty simple math to add up the assets and pensions and social security (if you trust it'll be there) and multiply by 4% and factor in an appropriate buffer (or not).
 
Hiredgun said:
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,
Click to expand...

If you hire a financial advisor, I say definitely go the fee only route. If you specify that you really only want that one task, to see if "your number" is sound, they should work with you.

I went through a similar situation back in fall of 2007. Under the radar from a hectic w*rk situation, took a personal day and met with a fee only advisor to see if I was RE ready. Yes I was and it was reassuring knowing that I was FIRE ready when returning back to the horrible w*rk setting.

Yes, you do have to find someone who you trust and have chemistry with. That helps a lot - kinda like finding a doctor or lawyer (or a plumber :D) --want them to work with/for you.

Here's a link to fee only planners:

Find an Advisor - Locate a Fee-Only Financial Advisor

If you really feel you can't do it on your own, I say paying a qualified professional for the confirmation is worth it.
 
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Probably should have added a disclaimer....FIRE'ing with "The Number" confirmed or not is like deploying a parachute when skyjumping. You never know if the chute will deploy until you actually pull the trigger :(....:LOL:
 
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!
 
easysurfer said:
...If you really feel you can't do it on your own, I say paying a qualified professional for the confirmation is worth it.
Click to expand...
This was my situation back in 2002. I was very inexperienced at investing. I had 2 different retirement systems (CSRS and FERS) to get my hands around. I had no clue about how to estimate expenses in retirement, etc etc.
I knew what I didn't know. ;)
I sought out and went to a CFP (fee only) with all sorts of data. I was very organized with retirement and medical insurance plan literature. I knew EXACTLY what services/analysis I wanted and did not want. We wrote up a fixed-fee contract with specific deliverables. I was a govt R&D program manager and knew how to negotiate the terms and cost of a contract.
To me, it was money well spent because I walked away a LOT smarter and had a better handle on the entire situation. I also was given specific actions to take to establish a solid estate plan (Will, Living Will, Health Care Proxy, PofA, etc). I contracted these out to an attorney.
I never consulted an advisor again until I needed help with paperwork, re-registering JTWROS accounts I had inherited. Again, specific services were agreed upon in writing for a fixed price, and the w*rk was done as agreed upon.
YMMV :D
 
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Hiredgun said:
with a financial advisor? In other words, having a financial advisor run the numbers and confirm that your "number" will let you retire early.
Click to expand...
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.

Hiredgun said:
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,
Click to expand...
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!
 
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 :dance:
 
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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.
 
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!
 
REWahoo said:
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.
Click to expand...
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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