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

[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]

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Originally Posted by 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.

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]

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Originally Posted by 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!

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]

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Originally Posted by 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.

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]

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Originally Posted by target2019 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!

[April2021]

Thank you EVERYONE for your thoughtful advice/opinion and extensive reading list! I appreciate you all and will take my time making a decision. I do think I could do it myself I just need a bit more confidence. I think my reading assignments and the great advice given in this forum can help me formulate a winning long term plan for sure!

By the way- I am loving my retirement. Just not enjoying the decisions required as a result of retirement as much.

[Optionality]

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by the way- i am loving my retirement. Just not enjoying the decisions required as a result of retirement as much.

I hear you, and it is a bit of a bummer that you have to read up on it. I also imagine the fact you were "pushed" into retirement before you had time to research matters was a bit of a surprise as well.


About the specific advice given, I personally have my 401(k) with Fidelity, and they are fine, but I've heard Vanguard and Schwab are also fine, you invest in very low cost mutual funds with close to zero overhead (My personal "benchmark" is that I want my costs under 0.1% of my assets, ideally under 0.05%). The advice of a simple, lazy 2 or 3-fund portfolio with say a 70% stock/30% bond allocation is a good one, and while it is perhaps not the very best you can do, it is close enough to optimal that further refinement is, in my opinion, more of a hobby than something that one should really expect to make money.


Regarding advice, I will mention one thing that I learned when I took my securities exam: if an advisor is a fiduciary, he or she has to have your best interest at heart, above their own. A regular advisor just needs to have investments that are "appropriate", which is a pretty low bar overall. You can't recommend widows and orphans to invest heavily in some super-risky venue or advise funds that are so ridiculously expensive there is no real hope they will ever outperform the index, but it really doesn't have to be optimal for the client. In other words, assume that the "free" advisors work to make Fidelity/Schwab rich, not you.

[Walt34]

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Originally Posted by April2021 By the way- I am loving my retirement. Just not enjoying the decisions required as a result of retirement as much.

This is perfectly normal. Retirement is a huge life change decision and usually irreversible. Like many, my wife and I left lots of money on the table when we retired and we wondered if that was the right choice.

About six months after we'd retired and moved to WV from the DC suburbs we went to visit my sister in northern VA. The first thing she said when she saw us was "You two look more relaxed than I've seen you in years."

That made it very clear that we'd made the correct choice for us.

The decisions do get easier as you grow more accustomed to your new life.

[dadu007]

Just stay with Schwab. I use and like them.
Switch from the Intelligent portfolio to a three index fund portfolio with the Schwab equivalents of Vanguard Funds. (Laid out it that "other" well-known forum that starts with "Bogl....."). Very minimal fees and up to you how much cash to keep on hand.
Done and done.

[athena53]

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Originally Posted by April2021 By the way- I am loving my retirement. Just not enjoying the decisions required as a result of retirement as much.

I totally agree. I retired rather quickly (one week elapsed between calling my husband and saying "I think I'm going to quit my job on Monday" and my last day in the office) but I'd been over the numbers MANY times. Health insurance was the scariest part and I'd been a property-casualty actuary so it shouldn't have been totally alien- but get DH signed up for Medicare, get COBRA for myself (which they outsourced to a place that didn't send the papers right away and I had a triathlon in the meantime and prayed I wouldn't get injured). It does calm down after that first flurry of changes.

[Retired Expat]

I use UBS and PM me if you want a referral to my FA and his team. I pay a flat .5% in fees and no fees on transactions. My portfolio with them started about where you are but is now much more. Have divided my money there into multiple accounts, bond funds, bond ladders, dividend producers, IRA etc

I diversified into rental real estate which generally produces the income I need to live on.

My team at UBS have been incredibly helpful in steering me in the right direction and to many other financial professionals who have saved me and my family millions in taxes and financial headaches

[viking111]

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Originally Posted by HI Bill 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!

I second this. I would add if you want investment advice from that point on you can come in here or BH or hire a per hour advisor to help. Usually a 200 -400 per hour. That is expensive but much cheaper than 1.25% of your entire portfolio.
People in here are much nicer than the BH site.

[April2021]

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Originally Posted by Retired Expat I use UBS and PM me if you want a referral to my FA and his team. I pay a flat .5% in fees and no fees on transactions. My portfolio with them started about where you are but is now much more. Have divided my money there into multiple accounts, bond funds, bond ladders, dividend producers, IRA etc I diversified into rental real estate which generally produces the income I need to live on. My team at UBS have been incredibly helpful in steering me in the right direction and to many other financial professionals who have saved me and my family millions in taxes and financial headaches

Thank you Retired Expat for the information. Will surely keep that in mind. Still in my thinking and research stage. Based on the fees I have been quoted, this is more reasonable and if you have been happy with the service and performance that is a plus. The advice in this forum has been awesome overall!!!

[April2021]

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Originally Posted by dadu007 Just stay with Schwab. I use and like them. Switch from the Intelligent portfolio to a three index fund portfolio with the Schwab equivalents of Vanguard Funds. (Laid out it that "other" well-known forum that starts with "Bogl....."). Very minimal fees and up to you how much cash to keep on hand. Done and done.

I like Schwab as well and what you suggested is exactly what I have been thinking if I decide to do it myself. I just know the cash portion MANDATE of the IP is my least favorite thing about the IP but it is probably the only thing that keeps it "free". Thank you.

[target2019]

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Originally Posted by April2021 I like Schwab as well and what you suggested is exactly what I have been thinking if I decide to do it myself. I just know the cash portion MANDATE of the IP is my least favorite thing about the IP but it is probably the only thing that keeps it "free". Thank you.

You can also use the Vanquard ETFs at Schwab for no additional cost.

[OldShooter]

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Originally Posted by April2021 ... I just know the cash portion MANDATE of the IP is my least favorite thing about the IP ...

Really nothing to worry about and nothing urgent here. As you learn how simple investing really is, you will soon have the self-confidence to take over running this money. In the mean time it can sit in the IP and the cash drag is really not that much.