HELP! My name is April and I am newly/unexpectedly retired!

[April2021]

Hi Everyone,
I have visited this website before but now have officially joined as I am now OFFICIAL. Glad to be here- I will be browsing content but would love to hear some feedback from those who have walked my journey: What to do with my $1M 401K?

Details
I am currently in my 58th year of life and in good health (but what does that mean these days!). This is kind of long but if you have the time to read and give feedback I would GREATLY appreciate it. If you don't have the time to read, if you could scroll down to the bottom and give some feedback on the highlighted BLUE questions, that would be great.

I did not plan on retiring (company had other ideas) and wanted to stick around for 2 more years tops. I worked at the same company for 35 years but at this juncture I have no desire to start again at another company.

I want to roll over my 401K mainly for the reason of having more diverse options to invest in. Here is what I have found thus far:

1. Schwab where I have an Intelligent Portfolio IRA is heavy on cash which I am sure they are making quite a bit of money on. At 11% in cash for a $!M portfolio, this is kind of crazy leaving over $100,000 to literally rot in .09% jail.

I like Schwab in that it is simple to use and feeless (except for the ETFs) and I also have an advisor that they threw in because of my portfolio size. He is not a CFP but he has access to CFPs if needed - so advice is free but the mandatory cash portion is still killing me. I have also made decent returns (10%) on the IRA I created, even with the crazy market swings. If I had the luxury of investing a few more percentages I would be quite happy!

2. I met with a very nice Prudential advisor and I like him but his fees are 1.25% for creating a portfolio of ETFs? Yeah, he will occasionally buy on the downturns and rebalance and is a good listener/strategizer, but I can't get over the fee (I spoke to one advisor that was 2%- it was a short conversation).

He also sells insurance and of course has suggested a $50K will get me a $200K payout, a $200K will get me almost $2M payout for legacy purposes with the premium health of course (I said he was from Prudential- of course he sells insurance!). I am thinking more of a ROTH conversion on $20K a year up to $100,000 and let it sit. Whatever is in there is tax free as well, but it's still my money.

3. I met with another advisor from another firm (Apogee), they propose a portfolio of quite a few individual stocks and ETFs for the fixed and markets outside of the US. The advisor does not create nor manage the portfolio, they use Maple Capital Management for that. The fee for $1M and over is .89% not sure what under $1M would be. I think I like the strategy better than just EFTs as I think the stocks may offer more flexibility in an actively managed portfolio. What I don't like is that the relationship isn't quite clear but the fee is a lot better than 1.25% though not sure what under $1M will be.

4. I decided to try using Personal Capital's free tool and it isn't FREE at first they pretty much MAKE you have to speak to an advisor which is a sales call of the greatest magnitude and such a turn off for me.

5. I want to start taking distributions prior to RMDs (if I wait until 70 like I planned my RMDs would be astronomical and with both me and my husband getting SS and my small pension we would easily be looking at 34% tax bracket in the future) but won't take any out until I move out of NYC and down to Florida (hopefully within 18 months- we bought our Florida home almost 10 years ago).

I don't need the money for bills. I also don't want to depart this planet and leave the majority of my hard earned 401K to my heirs.

1. Does anyone have any advice on advisors they have worked with that are well worth their fee?
2. Does anyone have any other advice in do it yourself options?
3. Does anyone have any advice at all?! What would you do it you were me?


Thank you fellow retirement colleagues for your thoughts!

April

 

[OldShooter]

1. You don't need an advisor. They are nice guys and will cost you a ton of money. Here is a video from William Sharpe, a Nobel prize winning economist and famous investment guru:

Start here:

"If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free 16 page download)

"The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)

"The Bogleheads Guide to Investing" by Taylor Larimore et al https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365

"Winning the Loser's Game" by Charles Ellis https://www.amazon.com/Winning-Losers-Game-Strategies-Successful-dp-1264258461/dp/1264258461 (latest edition, May 2021)

2. Forget about options until you are totally comfortable with investing, then you will know to forget about options.

3. Go slowly. Slowly. You don't have to get everything done even in your first year. You will remember bad mistakes forever. You will not remember the time it took you to think things through, to learn, and to make good decisions.

3a. The Schwab % cash is probably driven by the investor questionnaire that you filled out and the resulting investor profile. Contact Schwab, tell them that you want to reduce the cash the robot is holding and gently indicate that you will pull the money if this cannot be arranged. Then listen. As you get smarter you won't need the robot, but there is no rush with this.

3b. Don't worry about RMDs and all that stuff until your investment feet are fully on the ground. The rules will probably change a couple of times in the next decade and in any event you do not want the tax tail to be wagging the investment dog.

You will get more specific advice here, but the posters will need to know $ in investments and in expenses.

 

[April2021]

Thank you Old Shooter!
Will read your suggestions- the cartoon is priceless.

I have done quite a bit of reading and research- I think I suffer from "I don't trust myself as much as I trust a professional financial advisor stranger.
For the cash in the Intelligent Portfolio I will tell you it does not matter WHAT you answer- you could say I am comfortable losing 75% of my money and would just throw more in the basket and I would still have an 8% cash portfolio (I have manipulated the tool tremendously). There is no way around it- that is why Schwab does NOT charge a fee for their intelligent portfolios. Nothing is ever FREE. I may try what you suggested and I am sure Schwab would say- feel free to move your money to a fee based tool or manage it yourself (an option!)

I literally have anywhere between $1,093,000 and $1,030,000 depending on the day- in my 401K. The fees for my portfolio are about .23% expense ratio- these funds are currently held in Voya. I have another IRA at Schwab which varies as well and hovers around $58K.

I am not using my 401K for expenses. Just trying to make the most out of it while I am still breathing and leave a little for the end of the road, should I make it there.

You are right on those RMDs in my opinion...change is inevitable.

Thank you again!

 

[OldShooter]

... I think I suffer from "I don't trust myself as much as I trust a professional financial advisor stranger. ...

Of course. Don't feel bad. Instilling this fear is the primary objective of the investment industry (read the "If You Can" piece). No wonder they have temporarily succeeded with you. The industry want us to believe that investing requires that we hire their priests and witches and that we never discover the fact that the priests and witches on average can never beat the market.

When you finish that reading list you will know more about investing than the majority of the financial salespeople and stock-pickers.

 

[athena53]

You're starting with a decent asset base and healthy skepticism- both good to have!

Do you have access to health insurance via DH, the ACA or elsewhere? I retired abruptly at 61. Husband was old enough for Medicare but my ACA premiums had doubled by the time I was Medicare-eligible.

My investments are probably way too complicated and I have an advisor for about half the $$, paying 1% AUM (don't tell anyone- they take a dim view of advisors here ). If I had it to do over again I'd have a portfolio of maybe 4 or 5 ETFs and periodically rebalance. No need for an advisor- plenty of good info here and available with a search on "Asset Allocation".

At your (relatively) young age, the most important thing is not withdrawing an unsustainable percentage. Your questions centered around your IRA and 401(k) and timing of RMDs so I assume that you won't be withdrawing from them before age 70.5? That should give them plenty of time to grow if you have other sources of income.

 

[Walt34]

I'll add to the reading list:

The Millionaire Teacher by Andrew Hallam

How a Second Grader Beats Wall Street by Allan S. Roth

These first two are the ones I absolutely recommend.

I also have read these:

Predictably Irrational by Dan Ariely – I found this very interesting!

The Four Pillars of Investing by William J. Bernstein

Why Smart People Make Big Money Mistakes by Gary Belsky & Thomas Gilovich

Your Money & Your Brain by Jason Zweig

The Investor’s Manifesto Preparing for Prosperity, Armageddon, and Everything in Between by William J. Bernstein

A Random Walk Down Wall Street by Burton G. Malkiel

And if you really want to get deep into behavior issues with money – Thinking, Fast and Slow by Daniel Kahneman, the only psychologist to win a Nobel Prize in Economics. It’s probably more than you want to get into but I found it fascinating. It’s also a rather thick book.

And after all that, plus a lot of reading on this forum, I ended up with a three-fund "couch potato portfolio" that is doing just fine, by my lights at least. And I'm absolutely certain that I'm doing much better than my idiot nephew who has his 401k with Edward Jones, AKA "Fast Eddie".

 

[RetiredAndLovingIt]

58 or 59 seems to be the trend in getting rid of long time employees these days, it happened to me after 39 years working for the same company.
It may not feel like it today but in a few months once you are over the fear of the unknown you will realize it was really the best day of your life when they let you go.
Congratulations and welcome.

 

[rodi]

I'm at Schwab in a self directed IRA. My sister is also at Schwab but uses the Schwab Managed Portfolio (mutual fund flavor vs etf flavor). She is convinced that she wants someone to make the investment decisions for her. https://client.schwab.com/secured/managed-portfolios

I have a lazy portfolio - My asset allocation is fairly conservative (60% equities, 40% fixed income). I use a combo of index ETFs and mutual funds. Because they are schwab index funds they have low expense ratios.

I would avoid the prudential case - it seems like a great deal for the prudential agent... not so much for you.

My schwab advisor did a retirement check for hubby and me when we were deciding if it was time to retire. I hear from her a few times a year just checking in. My sister has the same advisor - but they talk about once a month. My sister prefers the hand holding, I prefer the hands off... We both get her services without extra fees because of the size of our portfolios.

Welcome to ER.org and welcome to retirement!

 

[HI Bill]

Hi Everyone,
I have visited this website before but now have officially joined as I am now OFFICIAL. Glad to be here- I will be browsing content but would love to hear some feedback from those who have walked my journey: What to do with my $1M 401K?

Details
2. Does anyone have any other advice in do it yourself options?
3. Does anyone have any advice at all?! What would you do it you were me?
[/COLOR]

Welcome, and congrats on your ER! Here's what I would do:

1. Invest with either Vanguard or Fidelity. Initiate a rollover for your 401(k) from either Vanguard or Fidelity.
2. Look up the Boglehead's 3-fund portfolio. Choose equivalent ETFs: VTI, VSUX, and BNDX. Set your asset allocation (60/40, 70/30, etc.), and buy the funds. Very low expense ratios, DIY, set and forget (mostly), and you have complete control.

Enjoy your ER! Cheers!

 

[Drewjd]

I strongly second the suggestion above to roll your money into Fidelity or Vanguard.


As for changing your investments, such as investing your cash, you can always "dollar cost average." That's a fancy way of saying investing a little bit over time, rather than all at once. This way you aren't as subject to market swings, and you can drip your toe into the investment pool.

 

[38Chevy454]

What HI Bill said. Only thing you might keep a little money in company 401k to take advantage of over 55 penalty free withdrawals, if your company plan allows it. Most do. Or if you have sufficient cash, do entire rollover.
At $1M portfolio value at Fidelity you get Private Client status and free advisor services. Advisor can help you with self directed planning.

 

[NanoSour]

Hello April and welcome to the ER community. For context, I'm also in my late 50's and have been retired for 8 years. When I left megacorp, I consolidated all my assets to Vanguard and established a 3-Fund portfolio of VTSAX, VTIAX, & VBTLX (40/20/40). Since 2013 I've been able to achieve over 6% real return, which I'm very happy with. Managing that portfolio across 5 accounts (4 IRAs) wasn't too bad as I only rebalanced once annually.

Recently, I decided to take advantage of transfer bonuses offered by most brokerages (except Vanguard) and moved all my assets over to Schwab. When I moved over to Schwab I decided to further consolidate my assets from 3 funds to 1 and chose to go with VBIAX (Vanguard Balanced Index fund). I moved all IRA assets to this one fund as there was no tax implication and now I no longer worry about managing my accounts. I primarily did this to make it easy on DW should anything happen to me. I may be sacrificing some gains, but I gave up chasing gains many years ago and am happy with what the overall market gives. This is just what I have chosen and may not be suitable for you, but just something to think about. Also, with your assets you should be able to trade Vanguard funds without transaction fees which are $74.95. Doesn't apply to ETFs as far as I understand. However, if you choose Schwab make sure you get this in writing for all your accounts. Also, you should be able to get a transfer bonus for moving your sizable 401K over to any brokerage. Probably upwards of $2k. Enough to treat yourself to a nice present for all those years of diligent saving.

Above all else, my number one advice is to stay away from a financial advisor. They are way too expensive and this is too easy to do on your own. I have a monthly fund sale sent to my checking account just like a paycheck and from there don't even think about the stock market or investing. It's more about spending at this point. Act III is gonna be great. Good luck with yours.

 

[pb4uski]

Does your 401k offer a stable vaue fund? If so, what does it yield?

You can't get a stable value fund in a tIRA other than money market funds which yield next to nada. Some stable value funds yield as much as 2% or more and have no interest rate risk. So make sure what you have before automatically moving from 401k to tIRA.

If your 401k does NOT have a decent table value fund and you move your 401k money somewhere, I would suggest Schwab since you already have a relationship with them. I have accounts with Vanguard, Fidelity and Schwab... they are all ok, but I like Schwab the best of the three.

You don't need an advisor for $1m.... if it is in a single tIRA and is most of your retirement nestegg you could put it all in a good quality balanced fund like Wellesley and would probably be fine.

 

[target2019]

Hello April2021. You have received much good advice already. Here are my comments on your interesting life.

Hi Everyone,
I have visited this website before but now have officially joined as I am now OFFICIAL. Glad to be here- I will be browsing content but would love to hear some feedback from those who have walked my journey: What to do with my $1M 401K?

Details
I am currently in my 58th year of life and in good health (but what does that mean these days!). This is kind of long but if you have the time to read and give feedback I would GREATLY appreciate it. If you don't have the time to read, if you could scroll down to the bottom and give some feedback on the highlighted BLUE questions, that would be great.

I did not plan on retiring (company had other ideas) and wanted to stick around for 2 more years tops. I worked at the same company for 35 years but at this juncture I have no desire to start again at another company.

I want to roll over my 401K mainly for the reason of having more diverse options to invest in. Here is what I have found thus far:

I am never in favor of moving an account until I hear more about how it is invested now, and what the choices are. For all that we know, you may have access to a very low fee US Total Stock Market there, or an excellent Stable Value Fund. Of course I acknowledge that the opposite may be true. But the devil is in those details. Without a complete plan of where you want to go, and for what reasons, you are just prey for the investing sharks.

One important question before all others is, "What do you feel is the proper asset allocation for the total invested portfolio of you and husband?" And also, "How did you arrive at that decision?"

1. Schwab where I have an Intelligent Portfolio IRA is heavy on cash which I am sure they are making quite a bit of money on. At 11% in cash for a $!M portfolio, this is kind of crazy leaving over $100,000 to literally rot in .09% jail.

I like Schwab in that it is simple to use and feeless (except for the ETFs) and I also have an advisor that they threw in because of my portfolio size. He is not a CFP but he has access to CFPs if needed - so advice is free but the mandatory cash portion is still killing me. I have also made decent returns (10%) on the IRA I created, even with the crazy market swings. If I had the luxury of investing a few more percentages I would be quite happy!

If I understand your situation, you do not have $1M invested with Schwab, but some other figure. So your cash drag is really what?

It could be that you do need a 100k cash position somewhere. I can't say whether or not. But if you examine what you can get in guaranteed CD for example, it is more than Schwab's .09%. but even at a rate of 10x that return, you do not realize much additional interest.

I do not use Schwab Intelligent Portfolio but have substantial funds there in a Rollover IRA account which came from two company 401(k) plans.

You can do that also, and not put the money into the SIP. You could follow the asset allocation of the SIP, and be ahead of the game.

By the way, there are no ETF fees at Schwab. There are very small transaction fees, and you will likely see those at other institutions as well.

2. I met with a very nice Prudential advisor and I like him but his fees are 1.25% for creating a portfolio of ETFs? Yeah, he will occasionally buy on the downturns and rebalance and is a good listener/strategizer, but I can't get over the fee (I spoke to one advisor that was 2%- it was a short conversation).

He also sells insurance and of course has suggested a $50K will get me a $200K payout, a $200K will get me almost $2M payout for legacy purposes with the premium health of course (I said he was from Prudential- of course he sells insurance!). I am thinking more of a ROTH conversion on $20K a year up to $100,000 and let it sit. Whatever is in there is tax free as well, but it's still my money.

3. I met with another advisor from another firm (Apogee), they propose a portfolio of quite a few individual stocks and ETFs for the fixed and markets outside of the US. The advisor does not create nor manage the portfolio, they use Maple Capital Management for that. The fee for $1M and over is .89% not sure what under $1M would be. I think I like the strategy better than just EFTs as I think the stocks may offer more flexibility in an actively managed portfolio. What I don't like is that the relationship isn't quite clear but the fee is a lot better than 1.25% though not sure what under $1M will be.

4. I decided to try using Personal Capital's free tool and it isn't FREE at first they pretty much MAKE you have to speak to an advisor which is a sales call of the greatest magnitude and such a turn off for me.

You don't mention what conversation you've had at the local Schwab office. That is probably one step you should take. But first you'll need to develop a set of specific questions. I sense there is an assumption on your part that Schwab will put your 401(k) rollover in the SIP. To the contrary, they will do what you want.

If you truly need an advisor, you might search for one who will charge you for creating a complete plan. So, such an advisor will not make money from your investments.

My opinion is that using Prudential, Apogee, or Personal Capital will leave you in the predicament you feel exists now. You should/must develop your personal model to help guide what you do in the future.

5. I want to start taking distributions prior to RMDs (if I wait until 70 like I planned my RMDs would be astronomical and with both me and my husband getting SS and my small pension we would easily be looking at 34% tax bracket in the future) but won't take any out until I move out of NYC and down to Florida (hopefully within 18 months- we bought our Florida home almost 10 years ago).

I don't need the money for bills. I also don't want to depart this planet and leave the majority of my hard earned 401K to my heirs.

1. Does anyone have any advice on advisors they have worked with that are well worth their fee?
2. Does anyone have any other advice in do it yourself options?
3. Does anyone have any advice at all?! What would you do it you were me?


Thank you fellow retirement colleagues for your thoughts!

April

1. I get free advice from Vanguard, Schwab, and this forum over the past 15 years or more. TBH, this forum is my first stop now if I have a specific question.
2. I do it myself at Vanguard and Schwab. Our target asset allocation is 50% equity, 50% fixed.
3. If I were you I would stop doing things, and stop fretting. Decide if your move or your investment transition is more important. Do one at a time. If you take this year to transition to DIY, learning more and more as you go, you will find yourself in a great place. At this time you are hearing about inflation danger, and advisors will use that fear against you. Yes, we want equities in our portfolio to help offset inflation. But making a major mis-step while just considering that will set you back for quite some time.

 

[donheff]

2. Forget about options until you are totally comfortable with investing, then you will know to forget about options.

LOL Excellent advice but I think she meant options for managing her own portfolio.

OP - you got a lot of good suggestions already in this thread. I agree with others that Schwab if fine. I have heard elsewhere that their intelligent portfolios robo advisor recommends a substantial cash holding. That may be important for some but if it isn't for you you can simply ignore it. Schwab, Vanguard, Fidelity all have programs that will recommend simple portfolios that are geared to the risk profile and goals you outline. You can get a general idea of what they will put together by looking at the holdings of various "lifestyle" or "target retirement" funds. If you read a few of the resources people have outlined you will soon understand why the programs are recommending the asset allocations they propose and you can set up and manage your own.

 

[r3saving]

Although perhaps not popular here; another alternative is a fee-only advisor. I've met with mine approximately once every four years. I contact her whenever I feel a "check-up" would be beneficial. We have an initial consultation after which she advises me of her flat rate fee (fee depends on the scope of planning I'm requesting) and I hand over all of my statements. We meet again later to go over my plan in detail, multiple "what if" scenarios, any other advice that I may not have thought of and she provides an action plan advising me of any suggested changes I should make regarding investments.

As a side note; my money is with Fidelity and I have met with the free advisor but he's always trying to sell me something. A fee only advisor is not selling anything.

If you're interested in a fee only advisor, here are two reliable networks from which to find one to work with:

Garrett Planning Network:

https://www.garrettplanningnetwork.com

NAPFA:

https://www.napfa.org/financial-planning/what-is-fee-only-advising

 

[donheff]

Although perhaps not popular here; another alternative is a fee-only advisor. I've met with mine approximately once every four years. I contact her whenever I feel a "check-up" would be beneficial. We have an initial consultation after which she advises me of her flat rate fee (fee depends on the scope of planning I'm requesting) and I hand over all of my statements. We meet again later to go over my plan in detail, multiple "what if" scenarios, any other advice that I may not have thought of and she provides an action plan advising me of any suggested changes I should make regarding investments.

As a side note; my money is with Fidelity and I have met with the free advisor but he's always trying to sell me something. A fee only advisor is not selling anything.

If you're interested in a fee only advisor, here are two reliable networks from which to find one to work with:

Garrett Planning Network:

https://www.garrettplanningnetwork.com

NAPFA:

https://www.napfa.org/financial-planning/what-is-fee-only-advising

I used a fee only advisor to do a one time review of my retirement plan about 15 years ago. She added to my piece of mind and had useful suggestions. Someone here (IIRC) mentioned an outfit called Bason Asset Management, that offers simple fee only services oriented to passive indexing. (Note: if I am not supposed to mention a specific practice like this someone should let me know and I will delete the reference)

 

[kevink]

You've received a great deal of good advice but here are a few other thoughts:

1. I've had accounts at both Vanguard and Schwab for many years, and while I've never been with Fidelity I hear nothing but good things about their service. I'm perfectly happy being mostly self-directed at Schwab these days but do recommend having a chunk of assets at a second brokerage as a bit of a hedge against the unfortunately increasingly real possibility of temporary lack of access to accounts due to cybercrime. I'd go with Fido myself and forget about Vanguard (though I happily own mostly Vanguard ETF's) due to their bottom-of-the-barrel customer service and website.

I would NEVER pay any advisor a percentage of assets but there are several very good FA's you can hire on a fixed fee basis for a one-time portfolio overview. I learned about this from the well-known FA Rick Ferri who hosts the Boglehead's podcast series and ended up hiring his colleague Jon Luskin for a portfolio second opinion. I recommend him:

https://jonluskin.com

If you do want more hand-holding there are several good FA firms that operate on a fixed annual fee basis rather than % of assets. One I was with for ~5 years (including during the Great Financial Crisis) that I can recommend without reservations is Evanson Asset Management. Fees for a portfolio your size are in the $3000-5000 a year range and for that you get a carefully-designed portfolio, access to DFA and other institutional share classes, a quarterly review of both your investments and the markets and macroeconomic and political processes driving them. It's an entirely different caliber of advice and insight from what you're going to get from an advisor at Schwab, Fido or Vanguard.

You'd want to have read some of the books recommended by OldShooter along with perusing their website before inquiring. They use Schwab as their custodian so no other moves would be required on your part:

https://www.evansonasset.com

Even if you ultimately decide to go the self-directed route you could always hire them for a year or two in order to free up some time and energy for transitioning to retirement without having to spend a ton of time on investing and finance.

 

[Life_by_Fire]

Have you looked at Vanguard PAS? If you feel you need an "advisory" it is a good fit. It costs .3% and will keep you in simple investments and rebalance for you. You could use it until you feel comfortable enough to do it yourself.

Or keep things very simple and just invest it all in one of the Vanguard LifeStrategy Funds. The Moderate Growth Fund (60/40) has an ER of .13%

 

[OldShooter]

Hi again @April. I think you're getting a lot of good advice here but I'd like to make a point. You're probably familiar with the ancient proverb: "Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime."

Questions like yours come along here fairly frequently and almost always attract a lot of posts recommending particular fish. They are almost always good fish, but without understanding and evaluating them in the context of your plans and needs your are left kind of alone next time you need to make a decision. So I'm circling back to my post #2 and still pushing the books and study.

I think @r3saving's suggestion of a fee-for-service advisor is worth considering too. Unfortunately, the words "Financial Advisor" conflate two kinds of advice. One is investment advice and the other is full spectrum financial advice. You can get investment advice many places as you know. Worse, "Investment Advisor" is often camouflage for salespeople. Full spectrum financial advice will cover many things besides just the portfolio. Social Security strategy, estate planning, insurance needs and pitfalls, possible 529 funding, tax strategies, ... Done well, this is valuable for many people.

LOL Excellent advice but I think she meant options for managing her own portfolio. ...

Yup. Sorry for any confusion.

 

[target2019]

I don't see any bad advice in the responses. People are eager to share a nugget or two about what they see as a key investing component. Every piece of advice does not fit the original question like a glove. But of course why would it, given all the nuance in Apri2021's life.

There's no mistake in giving advice when it is asked for. The mistake is made when assumptions about the questioner are made. Some do not desire to manage their investments. It could be that the instinct to not manage is a good one for them.

 

[April2021]

You're starting with a decent asset base and healthy skepticism- both good to have!

Do you have access to health insurance via DH, the ACA or elsewhere? I retired abruptly at 61. Husband was old enough for Medicare but my ACA premiums had doubled by the time I was Medicare-eligible.

My investments are probably way too complicated and I have an advisor for about half the $$, paying 1% AUM (don't tell anyone- they take a dim view of advisors here ). If I had it to do over again I'd have a portfolio of maybe 4 or 5 ETFs and periodically rebalance. No need for an advisor- plenty of good info here and available with a search on "Asset Allocation".

At your (relatively) young age, the most important thing is not withdrawing an unsustainable percentage. Your questions centered around your IRA and 401(k) and timing of RMDs so I assume that you won't be withdrawing from them before age 70.5? That should give them plenty of time to grow if you have other sources of income.

Thank you for the advice, especially the hindsight view!

Healthcare in retirement is free for us...will withdraw some funds as soon as I am in Florida permanently which should be in 1.5 years (or less). Life is too short and I don't need the funds for bills so no need to just let it sit. I would like to travel while I am healthy and can enjoy it.

We bought our retirement home 10 years ago after we paid off our NY home. Now want to sell NY home ASAP...husband seems to be quite attached to it...

 

[April2021]

I'm at Schwab in a self directed IRA. My sister is also at Schwab but uses the Schwab Managed Portfolio (mutual fund flavor vs etf flavor). She is convinced that she wants someone to make the investment decisions for her. https://client.schwab.com/secured/managed-portfolios

I have a lazy portfolio - My asset allocation is fairly conservative (60% equities, 40% fixed income). I use a combo of index ETFs and mutual funds. Because they are schwab index funds they have low expense ratios.

I would avoid the prudential case - it seems like a great deal for the prudential agent... not so much for you.

My schwab advisor did a retirement check for hubby and me when we were deciding if it was time to retire. I hear from her a few times a year just checking in. My sister has the same advisor - but they talk about once a month. My sister prefers the hand holding, I prefer the hands off... We both get her services without extra fees because of the size of our portfolios.

Welcome to ER.org and welcome to retirement!

Thank you Rodi.

I like my Schwab advisor. My 401K is not at Schwab yet. I gained an advisor with the THOUGHT my 401K was going to be rolled over. My IRA has done pretty well. I am going to read what was suggested. Mimicking my current portfolio without using the robo advisor and rebalancing myself may work. I can keep all those other percentages in my pocket!

 

[April2021]

What HI Bill said. Only thing you might keep a little money in company 401k to take advantage of over 55 penalty free withdrawals, if your company plan allows it. Most do. Or if you have sufficient cash, do entire rollover.
At $1M portfolio value at Fidelity you get Private Client status and free advisor services. Advisor can help you with self directed planning.

Thank you 38Chevy454. Good to know about Fidelity. My Schwab advisor has not mentioned assistance with self- directed. Think I need to ask him about that at some point!

 

[April2021]

Hello April2021. You have received much good advice already. Here are my comments on your interesting life.

I am never in favor of moving an account until I hear more about how it is invested now, and what the choices are. For all that we know, you may have access to a very low fee US Total Stock Market there, or an excellent Stable Value Fund. Of course I acknowledge that the opposite may be true. But the devil is in those details. Without a complete plan of where you want to go, and for what reasons, you are just prey for the investing sharks.

One important question before all others is, "What do you feel is the proper asset allocation for the total invested portfolio of you and husband?" And also, "How did you arrive at that decision?"


If I understand your situation, you do not have $1M invested with Schwab, but some other figure. So your cash drag is really what?

It could be that you do need a 100k cash position somewhere. I can't say whether or not. But if you examine what you can get in guaranteed CD for example, it is more than Schwab's .09%. but even at a rate of 10x that return, you do not realize much additional interest.

I do not use Schwab Intelligent Portfolio but have substantial funds there in a Rollover IRA account which came from two company 401(k) plans.

You can do that also, and not put the money into the SIP. You could follow the asset allocation of the SIP, and be ahead of the game.

By the way, there are no ETF fees at Schwab. There are very small transaction fees, and you will likely see those at other institutions as well.

You don't mention what conversation you've had at the local Schwab office. That is probably one step you should take. But first you'll need to develop a set of specific questions. I sense there is an assumption on your part that Schwab will put your 401(k) rollover in the SIP. To the contrary, they will do what you want.

If you truly need an advisor, you might search for one who will charge you for creating a complete plan. So, such an advisor will not make money from your investments.

My opinion is that using Prudential, Apogee, or Personal Capital will leave you in the predicament you feel exists now. You should/must develop your personal model to help guide what you do in the future.

1. I get free advice from Vanguard, Schwab, and this forum over the past 15 years or more. TBH, this forum is my first stop now if I have a specific question.
2. I do it myself at Vanguard and Schwab. Our target asset allocation is 50% equity, 50% fixed.
3. If I were you I would stop doing things, and stop fretting. Decide if your move or your investment transition is more important. Do one at a time. If you take this year to transition to DIY, learning more and more as you go, you will find yourself in a great place. At this time you are hearing about inflation danger, and advisors will use that fear against you. Yes, we want equities in our portfolio to help offset inflation. But making a major mis-step while just considering that will set you back for quite some time.

Target2019- my 401k is invested in a diversified (considering what is available- Large Cap, Midcap, small cap, International, real estate, two bond funds)) portfolio of index mutual funds in Voya- Fees are relatively low. I want to move my money where I have more options long term. They could stay in Voya forever but that is not what I want. My IRA at Schwab has done well even with all the downturn of late, the losses were relatively small in the portfolio when things were down- can't say the same of my 401K.
I am going to take my time...a lot of time...to make a decision. Appreciate the thorough review of my long winded post!