Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-03-2008, 02:42 PM   #41
Full time employment: Posting here.
tightasadrum's Avatar
 
Join Date: Aug 2006
Location: athens
Posts: 802
Quote:
Originally Posted by Rich_in_Tampa View Post
A fee of 1.5% of your nest egg is 38% of your annual income in many retirement scenarios. You have to decide if that is a good investment for you.
Gee Rich, that tiny little management fee sounds pretty harsh when you put it that way.
__________________

__________________
Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
tightasadrum is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-03-2008, 02:56 PM   #42
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Quote:
Originally Posted by tightasadrum View Post
Gee Rich, that tiny little management fee sounds pretty harsh when you put it that way.
OK, how about this: that 1.5% leaves a whopping 98.5% of your nest egg intact to grow again the next year.

But seriously, folks, it is amazing how your perspective changes as you approach the decumulation phase.
__________________

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 01-03-2008, 05:11 PM   #43
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,133
Quote:
Originally Posted by restonham View Post
. All I could get were vague inferences to help with life insuarance planning (that I did question - why would two people in their 60s with grown and gone children need life insurance??)
We expect to continue to have life insurance in our 60's to enable me to maximize my pension. I read about this option some while back and took out life insurance 7 years ago at age 48 while it was still affordable based on my expected final salary pension options at age 55. I can get a larger pension if I opt for a 25% survivor benefit as opposed to 50%. Since this difference ($8K/yr) is much larger than DW taking out a $500K insurance policy then this is what we have done. Assuming I snuff it first she will get 25% of my pension plus $500K lump sum.

So far so good. It is a variable insurance with me selecting the funds it is invested in (100% stock funds). We have paid in $35,427 to date and its cash value is $26,636 so it has cost us $1,256/yr for $500K insurance to date. The funds have performed very well so we'll be sticking with it I think.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Thanks!
Old 01-03-2008, 07:56 PM   #44
Confused about dryer sheets
 
Join Date: Dec 2004
Posts: 5
Thanks!

Thanks for all the good info. We've already logged onto Bogleheads and are thinking hard about the 1% fee issue. Sounds like it 's really not much work to do it myself, and I'm especially glad to hear that qualified funds (IRAS, 401Ks) don't need to have their cost basis tracked or archived, since that's a huge chunk of my savings and investments.

Also, contrary to the few posters who are very suspicious about me being a "troll", it just isn't true. I have nothing to sell or gain out of this except to make good decisions and keep more assets in my pocket for retirement. So for all of you who are less quick to jump to erroneous conclusions, thank you very much.

QT

__________________
QT is offline   Reply With Quote
Old 01-04-2008, 10:33 AM   #45
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by QT View Post
Thanks for all the good info. We've already logged onto Bogleheads and are thinking hard about the 1% fee issue. Sounds like it 's really not much work to do it myself, and I'm especially glad to hear that qualified funds (IRAS, 401Ks) don't need to have their cost basis tracked or archived, since that's a huge chunk of my savings and investments.

Also, contrary to the few posters who are very suspicious about me being a "troll", it just isn't true. I have nothing to sell or gain out of this except to make good decisions and keep more assets in my pocket for retirement. So for all of you who are less quick to jump to erroneous conclusions, thank you very much.

QT

Why do you think it costs 1% a year??
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 01-04-2008, 12:19 PM   #46
Recycles dryer sheets
beowulf's Avatar
 
Join Date: Oct 2007
Posts: 466
Quote:
Originally Posted by Alan View Post
We expect to continue to have life insurance in our 60's to enable me to maximize my pension. I read about this option some while back and took out life insurance 7 years ago at age 48 while it was still affordable based on my expected final salary pension options at age 55. I can get a larger pension if I opt for a 25% survivor benefit as opposed to 50%. Since this difference ($8K/yr) is much larger than DW taking out a $500K insurance policy then this is what we have done. Assuming I snuff it first she will get 25% of my pension plus $500K lump sum.

So far so good. It is a variable insurance with me selecting the funds it is invested in (100% stock funds). We have paid in $35,427 to date and its cash value is $26,636 so it has cost us $1,256/yr for $500K insurance to date. The funds have performed very well so we'll be sticking with it I think.
I understand completely. I did not provide enough info to explain that I am not saying that life insurance is unnecessary, but that in our specific case, I thought the financial advisor was off base. We did about the same thing you did. I picked up a 20 year term policy at 50, also when rates were quite reasonable, with the expectation that I would not need insurance after 70 as our assets and pension would be large enough. As a retired Fed, the reduction for the full 55% survivior benefit for my wife is 9% of my pension. After looking at the numbers, it makes a lot more sense for me to keep it that way rather than drop the 55% to 25% and save about 4.5%. The big thing for us is that Fed pensions are inflation protected (like SS). Assuming she will live 20 years or so after I shuffle off, there is no way an insurance policy could make up the difference. I guess you have whole variable life rather than term, as renewing a term policy at 70 would be prohibitively expensive.
__________________
beowulf is offline   Reply With Quote
Old 01-04-2008, 12:43 PM   #47
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 284
QT- The way your original post is phrased, it sounds as if you are offering your services. That's why people are being harsh about it.

When I read your latest post, it now sounds as if someone else has offered to do this for you for 1% (I'm assuming 1% assets under management). If so - RUN AWAY- RUN AWAY. This fee is far in excess of what should be reasonable. For example, if you had $1million in assets, you would pay this person $10,000. For what? With a Vanguard Target Retirement fund, and a CPA to do your taxes, you would pay probably less than $2500 a year. Is it really worth $7500 a year to have someone staple reports together and put them in a filing cabinet? Because that's the only other thing this person would do.
__________________
A854321 is offline   Reply With Quote
Old 01-04-2008, 01:01 PM   #48
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by QT View Post
No one seems to ever discuss how much work it is or how much time it takes to keep track of and manage their investments leading up to and while in retirement.

Can you please comment on how much time per month you spend on research, tax angling, monitoring, bookkeeping, rebalancing, etc?

What books, websites, or software helps you understand and deal with these chores? Do they seem like chores, or is it easy once a methodology is established?

Would you pay a 1% (or less) fee to have someone else (competent, professional, and in your corner) deal with all this stuff?

Does it feel like the more money you have, the less comfortable you are with handling these details?

Thanks for your thoughts!

4 years and counting down!!

QT
The first time a person does something, there is a learning curve. But if a structure is in place, when the same thing is done a second time, the actions might take less than 10 minutes.

Examples-
ex1:
I have spent hours, probably more than 1000 over the last 10 years on portfolio construction and asset allocation. Learning how to pick mutual funds for example.

My IRA is around 6 years old. Much time was spent at that time picking the funds and learning the amounts to send to each to get started.

Now I have a strict asset allocation I follow. I have a watch list of funds and criteria to choose funds. I did a rollover about 2 months ago. It took me longer to fill out the paperwork (2 hours) than it did to choose the funds (30 minutes).

ex2:
I took me 3 days this year to learn how to calculate the IRR of my portfolio. I plugged numbers in a spreadsheet, checked them, realized errors (or interpretations) made adjustments and kept going.

next year the same calculations will take me minutes. It will take longer to get the end of year amounts from 2 different 401ks, 2 different roths and 2 different rollovers than it will to actually calculate. The spreadsheet will give me the numbers needed once the last cell is entered (seconds).
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 01-04-2008, 01:15 PM   #49
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by A854321 View Post
Is it really worth $7500 a year to have someone staple reports together and put them in a filing cabinet? Because that's the only other thing this person would do.
Are you speaking from experience, knowledge, or opinion?
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 01-04-2008, 03:27 PM   #50
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,133
Quote:
Originally Posted by restonham View Post
I I guess you have whole variable life rather than term, as renewing a term policy at 70 would be prohibitively expensive.
Correct. Taking out whole variable life was a big decsion but so far it has been doing just great.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 01-04-2008, 04:25 PM   #51
Recycles dryer sheets
 
Join Date: Dec 2006
Location: Florida
Posts: 249
Have to agree with Nords and Rich in Tampa: Best to learn to manage your own funds yourself. A lot of education is NOT required. If you accept this premise: simplest (and cheapest) may be best. You can do as simple as the Couch Potato portfolio (stock, bond mutual fund). A lot of what goes on in investing (and here!) is mostly ego, and therefore 99% bulls--t (rhymes with "pulpit" -- also a frequent source of that substance!) ... or more like this -- you can make investing as simple or as complex as you like.

I pitch these books as anti-high-fees and anti-investment advisors:
Edesses, Michael: The Big Investment Lie
Edelman, Ric: The Lies about Money

You may be a "captive retiree" like me -- I am the beneficiary of trusts (which I have bitched against elsewhere) and pay 1-2% for their services. As noted earlier in this thread, many people don't need to pay these seemingly small annual charges, which really are unnecessary and chisel away at money you could be spending yourself.
__________________
I've got nothing against an honest day's work, provided that someone else does it.
pedorrero is offline   Reply With Quote
Old 01-04-2008, 05:02 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Quote:
Originally Posted by FinanceDude View Post
Are you speaking from experience, knowledge, or opinion?
I think that given the scenario of all assets in a Target Retirement Fund, with a CPA to do the taxes...that it would be pretty intuitive that an advisors role would be pretty limited.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 01-04-2008, 09:24 PM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by cute fuzzy bunny View Post
I think that given the scenario of all assets in a Target Retirement Fund, with a CPA to do the taxes...that it would be pretty intuitive that an advisors role would be pretty limited.
That may be true. I for one am not "sold" on said retirement strategy funds, they are too new...........

If people are paying folks 1% for a mutual fund portfolio, that's ridiculous. Paying 1% to manage an equity portfolio in these times may not be so ridiculous............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 01-05-2008, 07:16 AM   #54
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Well, it sure would render your existence pretty meaningless if an indexed, computer balanced fund beat smart money managers over a 20 year period, so I understand not being sold on them.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 01-05-2008, 04:45 PM   #55
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,451
Quote:
Originally Posted by pedorrero View Post
Have to agree with Nords and Rich in Tampa: Best to learn to manage your own funds yourself. A lot of education is NOT required. If you accept this premise: simplest (and cheapest) may be best. You can do as simple as the Couch Potato portfolio (stock, bond mutual fund). A lot of what goes on in investing (and here!) is mostly ego, and therefore 99% bulls--t (rhymes with "pulpit" -- also a frequent source of that substance!) ... or more like this -- you can make investing as simple or as complex as you like.

...

You may be a "captive retiree" like me -- I am the beneficiary of trusts (which I have bitched against elsewhere) and pay 1-2% for their services. As noted earlier in this thread, many people don't need to pay these seemingly small annual charges, which really are unnecessary and chisel away at money you could be spending yourself.

I spend a couple of hours on investments a day (including reading these boards), but Pedorreo is mostly right. Much of the financial discussion you see on this board is some combination of hobby and ego.

There is almost no evidence that all of our activity result in higher returns but certainly involves more time. A simple "couch potato portfolio" which involves sticking somewhere between 50-75% of your money in the Vanguard Total Stock Market Fund, 10% or so in Vanguard Money Market, and the remainder in the Vanguard Total Bond Market fund involves almost no effort or time. Essentially once a year you look at your portfolio and rebalance it by selling either stocks or bonds and buying the other to achieve your desired asset allocation. It requires no more time than meeting with a financial advisor every six months and Vanguard will literally save you thousands of dollars in fees you'd pay an advisor.

I realize couch potato portfolio sounds too simple to be so good but it is.
__________________
clifp is online now   Reply With Quote
Old 01-05-2008, 04:49 PM   #56
Full time employment: Posting here.
 
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 831
Quote:
Originally Posted by clifp View Post
A simple "couch potato portfolio" which involves sticking somewhere between 50-75% of your money in the Vanguard Total Stock Market Fund, 10% or so in Vanguard Money Market, and the remainder in the Vanguard Total Bond Market fund involves almost no effort or time. Essentially once a year you look at your portfolio and rebalance it by selling either stocks or bonds and buying the other to achieve your desired asset allocation. It requires no more time than meeting with a financial advisor every six months and Vanguard will literally save you thousands of dollars in fees you'd pay an advisor.

I realize couch potato portfolio sounds too simple to be so good but it is.
Amen.
__________________
Dreams Worth Dreaming are Dreams Worth Planning For. I Spent a Career Planning for Early Retirement.
RetireeRobert is offline   Reply With Quote
Old 01-05-2008, 05:20 PM   #57
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by cute fuzzy bunny View Post
Well, it sure would render your existence pretty meaningless if an indexed, computer balanced fund beat smart money managers over a 20 year period, so I understand not being sold on them.
Their track records thus far can't even beat a highly rated balanced fund.............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 01-05-2008, 05:36 PM   #58
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
What? Did they have a sale on "."'s today?

Looks to me like the 'since inception' returns on the 2003 versions of the TR funds in the 2015 and up range are returning 11.5-12.5%, and all the managed vanguard balanced funds in that same time period are doing about the same or not quite as well.

"Since inception" ROR's for the lifestrategy series, who have a little more time in them...are also in line with or better than similar allocated managed funds at vanguard.

So i'm still looking for the reasons to throw in that extra 1%. I know you guys have your days and sometimes the days stretch to years, but the data says that a long range investor parking their money in an indexed allocation fund does as well or better than sitting in the same managed fund. And I still cant find an indicator that says which one of you guys is just about to start doing better than mr. market.

But I guess my actual point was that it was something that you'd obviously reject out of hand, since (right or wrong) your livelihood depends on it. It'd be like a cop saying that a little crime is good and doesnt really cause any harm.

Plus you're a big scary moderator guy with a lot of dots on his side, so maybe i'm wrong!
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 01-05-2008, 06:55 PM   #59
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
What amazes me is that nobody has written the book that the world clearly needs: something that shows with historical data that index/target investments beat managed, and then goes on to recommend a simple approach to assett allocation for the efficient frontier using low cost funds/ETFs. The Bernstein 4 pillars book is good, but not easy reading for a newbie.

"A wise man is he who knows the relative value of things." - William Ralph Inge
__________________
free4now is offline   Reply With Quote
Old 01-05-2008, 06:57 PM   #60
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
I agree, its a tough read.

So try this!

http://www.early-retirement.org/foru...ing-14508.html
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Reality TV Moemg Other topics 33 08-14-2007 09:06 PM
retirement dreams and reality Khan Life after FIRE 7 04-13-2007 02:51 PM
Reality Check foxhuntr Hi, I am... 15 03-09-2006 11:25 AM
Reality and your concepts of self procreation TromboneAl Other topics 9 09-18-2005 11:55 AM
Reality and your concepts of self protection sgeeeee Other topics 46 09-09-2005 12:11 PM

 

 
All times are GMT -6. The time now is 02:41 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.