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Old 06-19-2012, 06:55 AM   #21
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Vanguard is not in the business of offering financial and taxation advice. There are probably liability issues too. So I think it's entirely appropriate for them to tell you to consult a tax advisor.
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Old 06-19-2012, 09:33 AM   #22
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Originally Posted by nun View Post
Vanguard is not in the business of offering financial and taxation advice. There are probably liability issues too. So I think it's entirely appropriate for them to tell you to consult a tax advisor.
Vanguard is in the business of offering financial advice, they have CFP's on staff that do just that. If you have enough in your account they'll even have free consultations with you, and are not commissioned based. Whether a Vanguard CFP would help answer the questions, I have no experience but believe they would.

I posted the thread to see if anyone else had similar dealings with the 72t topic with Vanguards call center. I guess I was under an incorrect assumption that Vanguard would help me understand what # to plug into a financial calculation. I was wrong, it wasn't the first time and it won't be the last.
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Old 06-19-2012, 01:53 PM   #23
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So if I call up Vanguard and ask them if they can give me some information on tax free investments, the person on the phone is going to tell me to consult a tax advisor before giving me one ioda of information?
First of all they would ask you what you mean by "tax free"? Then they would probably tell you about municipal bond funds that are free from taxation at state and/or federal levels.

Then they might mention tax benefits of various forms of IRAs.

Then they might mention the tax-managed mutual funds they offer (Tax managed small cap fund comes to mind).

Then they might talk about general tax advantages of index funds and ETFs.

Talking to you about their particular products and the tax advantages seems like something they could tell you about generally, since all US based retail customers will have similar tax situations, however they wouldn't be able to give specific tax advice for your particular situation.
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Old 06-19-2012, 01:57 PM   #24
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Perhaps an imperfect analogy would be expecting a car dealer to run a driver's ed school as well as just selling & maintaining the hardware.
More like a Toyota dealer telling you how to convert your Prius to an all electric plug in. It's just simple bolting stuff on and cutting stuff and popping wire nuts on the right combo of wires after all...

If the dealer gets it wrong and your car melts down (or accelerates into oncoming traffic at 80 mph), your lawyers (or your estate's lawyers) knock on that dealer's door for a big pay day because their advice turned out to be wrong.
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Old 06-19-2012, 02:39 PM   #25
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Vanguard is in the business of offering financial advice, they have CFP's on staff that do just that. If you have enough in your account they'll even have free consultations with you, and are not commissioned based. Whether a Vanguard CFP would help answer the questions, I have no experience but believe they would.

I posted the thread to see if anyone else had similar dealings with the 72t topic with Vanguards call center. I guess I was under an incorrect assumption that Vanguard would help me understand what # to plug into a financial calculation. I was wrong, it wasn't the first time and it won't be the last.
This is not something a CFP does. It is a tax question, and for that you need a tax specialist (CPA or other person qualified to give tax advice.)
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Old 06-19-2012, 02:49 PM   #26
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Originally Posted by jtg5964 View Post
Vanguard is in the business of offering financial advice, they have CFP's on staff that do just that. If you have enough in your account they'll even have free consultations with you, and are not commissioned based. Whether a Vanguard CFP would help answer the questions, I have no experience but believe they would.
I think a Vanguard CFP would do what every planner does; give you AA advice, tell you to tax defer and point you towards low cost mutual funds. They would not get into tax planning like 72t. For that you need a specialist.
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Old 06-19-2012, 06:06 PM   #27
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If you haven't already, suggest you take a look at 72t.Net |IRC Section 72(t) | 72t Distribution | 72t Calculators | SEPP Plans. They have some good calculators and a forum to gather more information. I had looked into setting up a 72t but decided not to. It was certainly my understanding from the information I gathered that you are on your own when setting up a 72t, don't expect any assistance from any financial company. You need to be very careful in selecting the proper withdrawal rate. A very small miscalculation could result in a big IRS penalty. From looking at the 72t.net web site the current 72t withdrawal rates are very low (1.57%) and going down.
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Old 06-19-2012, 11:58 PM   #28
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I have used 72t distributions to live on since I retired in 2006. I use the 'annual recalc' method, so a very simple spreadsheet suffices for distribution calculations.

I have my IRAs at Schwab. They were very helpful in transferring my accounts and showing me the ins and outs of their website and online forms, but I got all the info I needed about 72t's from the highly regarded 72t.net. I needed to understand the rules myself to feel comfortable.
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