PSA: Plug for (free) Vanguard Financial Plan

[Midpack]

I signed up for a (portfolio size dependent) free Vanguard Financial Plan about two weeks ago. I didn't realize I hadn't done one since 2005!

They sent me a comprehensive 24-page plan well in advance, and I had my one-on-one review on the telephone today.

I had about 7 questions after reading the plan in advance, though I was pretty sure I knew the answers for 6 or them. They (she actually) answered every question very well, with much ore insight and thought than I had expected. No point in going through the questions as they'd be unique for each of us, so my Q&A wouldn't be helpful to someone else.

And though it wasn't one of my questions or part of the written plan, she gave me good reason to rethink Roth IRA conversions again, something I've considered and consciously chosen not to proceed with several times in the past. She was pretty convincing, and she knew what she was talking about inside and out IMO.

While the written plan is largely just a standard plug-n-chug with accompanying boilerplate, her explanations demonstrated there was more thought given to it than just plug-n-chug.

Anyway, I thought it was excellent, very worthwhile - and I recommend it for any Vanguard account holder, newbie or experienced (if free).

[Mike Piper]

Quote:

Originally Posted by Midpack And though it wasn't one of my questions or part of the written plan, she gave me good reason to rethink Roth IRA conversions again, something I've considered and consciously chosen not to proceed with several times in the past. She was pretty convincing, and she knew what she was talking about inside and out IMO.

Sounds interesting! Care to share? :-)

[ERD50]

Quote:

Originally Posted by Mike Piper Sounds interesting! Care to share? :-)

I'd like to hear also. I realize it would be specific to your situation, but anything of general nature to share?

-ERD50

[travelover]

Quote:

Originally Posted by Midpack ....... (portfolio size dependent) ........

Don't keep us in suspense, but is the threshold for free?

[Mike Piper]

Quote:

Originally Posted by travelover Don't keep us in suspense, but is the threshold for free?

This page has a link to their fee schedule:
https://personal.vanguard.com/us/wha...anningservices

[travelover]

Quote:

Originally Posted by Mike Piper This page has a link to their fee schedule: https://personal.vanguard.com/us/wha...anningservices

For everyone else's benefit - bottom line $500K for free

[pb4uski]

Add me to the list of those who are curious as to her rationale as toi why tIRA>Roth conversions are not a good idea.

[whatnot]

Hi 1st time poster and relatively new lurker. I saw on an earlier post that one of the recommended investments they had sent you was the new Fund -Total International Bond Index Fund. Did you get a better comfort level with the fund and are you going to
move $ to the fund.
I also have signed up for the FP with Vanguard and a recommendation for this fund was on my initial plan also. My initial thought was to go with an established fund rather than a new Fund with no history. Thoughts?

[jclarksnakes]

Quote:

Originally Posted by pb4uski Add me to the list of those who are curious as to her rationale as toi why tIRA>Roth conversions are not a good idea.

+1. IRA to Roth conversions are a part of my future financial plan.

[ERD50]

Quote:

Originally Posted by pb4uski Add me to the list of those who are curious as to her rationale as toi why tIRA>Roth conversions are not a good idea.

Quote:

Originally Posted by jclarksnakes +1. IRA to Roth conversions are a part of my future financial plan.

Quote:

Originally Posted by Midpack ... she gave me good reason to rethink Roth IRA conversions again, something I've considered and consciously chosen not to proceed with several times in the past. ...

I'm not sure which way the advisor was advising - for or against Roth conversions for the OP's situation? He had chosen not to proceed, and now is convinced to proceed? I think?

-ERD50

[Midpack]

Quote:

Originally Posted by pb4uski Add me to the list of those who are curious as to her rationale as toi why tIRA>Roth conversions are not a good idea.

Guess I worded my OP poorly. She said we should reconsider starting Roth IRA conversions, we have not converted anything from our TIRA/Rollover IRAs. With many variables and assumptions it's not always a no brainer. The online Vanguard Roth conversion calculator actually showed conversions could work against us, depending on assumptions.

But I need to research and confirm what she told me regarding impact on Soc Sec tax impact when we reach RMD age and another tax aspect before sharing detail...

[Midpack]

Quote:

Originally Posted by whatnot Hi 1st time poster and relatively new lurker. I saw on an earlier post that one of the recommended investments they had sent you was the new Fund -Total International Bond Index Fund. Did you get a better comfort level with the fund and are you going to move $ to the fund. I also have signed up for the FP with Vanguard and a recommendation for this fund was on my initial plan also. My initial thought was to go with an established fund rather than a new Fund with no history. Thoughts?

Better than my views, http://www.early-retirement.org/foru...und-65018.html

[anethum]

Quote:

Originally Posted by Midpack Anyway, I thought it was excellent, very worthwhile - and I recommend it for any Vanguard account holder, newbie or experienced (if free).

You convinced me! Thanks, I guess. I signed up today. For whatever reason, I had previously declined when I got their free offer.

[Midpack]

Quote:

Originally Posted by anethum You convinced me! Thanks, I guess. I signed up today. For whatever reason, I had previously declined when I got their free offer.

I don't think you'll be disappointed, especially for free. While they make recommendations and explain why, and they may follow up (remains to be seen), I don't think there's any pressure or sales pitch. There wasn't during the phone call today, and there wasn't in 2005 when I did it IIRC. You're free to act on or ignore their recommendations...

[Katsmeow]

When we opened our Vanguard account 3 years ago we did the free plan. I must admit I was a little bit disappointed in it.

At the time DH and I both had 401(k)s so the big thing was for them to recommend Vanguard funds for us, plus recommend the best of the funds in the 401(k)s. They did a good job of that.

The Vanguard fund recommendations were Total Stock, Total Bond and Total International. That seems to be the sort of boilerplate (I guess they would add the International Bond fund now). And that was fine although not really a surprise.

However, the call with the advisor irritated me. We were planning to invest about 10% of the portfolio in Wellesley. She said she didn't recommend it. I asked why and it was basically just the preference for index funds.

Fair enough. However, I told her that we were without doubt going to buy Wellesley so - given that - and our desired asset allocation, I wanted to know how that would affect the recommendations for the 401(k)s and how much of everything else to buy to keep the desired asset allocation. She wouldn't tell me. I told her I understand she didn't recommend Wellesley (and she could put it writing if she wanted) but to just assume we bought it and were going to keep it and then tell us how much of everything else to buy. But, she still wouldn't.

[Focus]

Quote:

Originally Posted by Midpack And though it wasn't one of my questions or part of the written plan, she gave me good reason to rethink Roth IRA conversions again, something I've considered and consciously chosen not to proceed with several times in the past. She was pretty convincing, and she knew what she was talking about inside and out IMO.

As described on the Vanguard site, the plan appears investment centered, and that's not what I need help with. Did the CFP assist you with your drawdown strategy? It's optimizing this that I'd like to focus on.

[shasta]

The vanguard flagship services CFA and other services are the only thing I use next to an outside tax man. Keep those expenses super low.

[Midpack]

Quote:

Originally Posted by Katsmeow When we opened our Vanguard account 3 years ago we did the free plan. I must admit I was a little bit disappointed in it. At the time DH and I both had 401(k)s so the big thing was for them to recommend Vanguard funds for us, plus recommend the best of the funds in the 401(k)s. They did a good job of that. The Vanguard fund recommendations were Total Stock, Total Bond and Total International. That seems to be the sort of boilerplate (I guess they would add the International Bond fund now). And that was fine although not really a surprise. However, the call with the advisor irritated me. We were planning to invest about 10% of the portfolio in Wellesley. She said she didn't recommend it. I asked why and it was basically just the preference for index funds. Fair enough. However, I told her that we were without doubt going to buy Wellesley so - given that - and our desired asset allocation, I wanted to know how that would affect the recommendations for the 401(k)s and how much of everything else to buy to keep the desired asset allocation. She wouldn't tell me. I told her I understand she didn't recommend Wellesley (and she could put it writing if she wanted) but to just assume we bought it and were going to keep it and then tell us how much of everything else to buy. But, she still wouldn't.

Interesting. I don't own either, but FWIW I asked her if they ever recommend Wellington and Wellesley, just because I know the latter is so popular here. She said they don't because they recommend based on their belief that most investors are best served by trying to match the broad market for stocks and bonds using a passive (index funds), low cost funds. I believe that's been pretty well established as true for most investors, see Bogle, Bernstein, Burns, Schultheis, etc.

She said W & W are active funds (true) that overweight large cap stocks and intermediate bonds. Relying on them largely misses other asset classes, and they don't ordinarily recommend active funds. She said they don't try to talk people out of W & W and they just recommend other index funds to cover other asset classes. Seemed like a reasonable explanation to me ***.

Though I don't have W & W, I have a small, value & emerging markets tilt to my AA - but I wouldn't have expected them to recommend that to others. So they offer up two proposed plans, one preserving my tilt preferences and another selling them off toward more Total _____ Funds, already my core holdings.

There was one deviation from that, which surprised me. I have TSM and LCV, they recommended I add LCG? I would have thought they would just recommended I exchange LCV for more TSM. They didn't because we have a large paper capital gain in LCV and it was more tax efficient to add LCG instead. Pretty smart IMO, and not quite boilerplate.

Keep in mind this is a FREE service to many Vanguard account holders. And *** Vanguard has always promoted low cost broad market index funds, a founding principle IIRC. So I wouldn't expect them to cater to any and all AA styles, especially for a free service. I know they have to offer many funds they might not wholely recommend to have a viable business. I would have been very surprised if they had simply endorsed my AA as is, and the insights I got from the plan and the 45 minute (she was willing to talk longer) discussion were very worthwhile for me. Thought others might too...

[Midpack]

Quote:

Originally Posted by wishin&hopin As described on the Vanguard site, the plan appears investment centered, and that's not what I need help with. Did the CFP assist you with your drawdown strategy? It's optimizing this that I'd like to focus on.

Somewhat, that was part of the Roth conversion discussion. But I'd also benefit from more insights into drawdown, have had to pick that up mostly outside Vanguard, and I wish I knew more.

[Badger]

Quote:

Originally Posted by wishin&hopin As described on the Vanguard site, the plan appears investment centered, and that's not what I need help with. Did the CFP assist you with your drawdown strategy? It's optimizing this that I'd like to focus on.

Quote:

Originally Posted by Midpack Somewhat, that was part of the Roth conversion discussion. But I'd also benefit from more insights into drawdown, have had to pick that up mostly outside Vanguard, and I wish I knew more.

I wish I knew more too. This is the only thing I am really concerned about. We have too much in tIRA with only 4 years to 70 1/2. We are presently in 15% tax bracket and will be jumping into a higher tax bracket (or 2). I'm not sure what we should be looking for as the best creditials (in a CPA or tax lawyer ) for tax advice optimization or even the best way to find a qualified person in our area.

It looks like there are at least 3 of us here that could use some direction.

Cheers!