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Do I need a CPA?
Old 02-24-2021, 05:02 PM   #1
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Do I need a CPA?

I'm getting really close to retirement. My tentative plan is to call it quits at the end of April. I started down the path of moving the bulk of my assets into a managed account with Personal Capital. When I listened to their pitch, I mentioned that I feel that I can effectively manage my own asset allocation and rebalancing, but what I'm really looking for is help with things such as:
  • Which bucket(s) should I use to fund my retirement income stream
  • Help with ROTH conversions (how much and when?)
  • How much to include in quarterly estimated taxes
  • When my wife retires in a year or two (we're both currently 59), we'll need to be very coginizant of maintaining taxable income under the ACA thresholds

Those are the types of issues that concern me and that I'd like professional help with. The PC rep I worked with told me they would be able to help me through those issues. It occurs to me though, that these are really more the types of questions that I should hire a CPA for. As it stands right now, PC hasn't reallocated any of my funds and there are to be no charges for the first 3 months, after which their rate is .79%. I've instructed my advisor to hold off on doing any allocations until I think this through some more. I'm beginning to think that I should pull everything out of PC to manage myself and hire a CPA for the tax-related issues I mentioned above.

I've never worked with a CPA and have always done my own taxes. Are these the types of issues that a CPA can help me with?
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Old 02-24-2021, 05:12 PM   #2
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It sounds like you have some DIY tendencies. Wouldn't you feel more comfortable learning as much as you can from those living the life, and then managing your own finances?

CPA's I know aren't trained on buckets.
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Old 02-24-2021, 05:59 PM   #3
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There are two kinds of advisors that are frequently conflated here: Investment Advisors and Financial Advisors. Investment advisors are what you typically get through brokerage houses, regardless of what their business card says. It sounds like you don't need much of this.

Financial advisors (rarely CPAs) cover what you want and more. If you do not have a current estate plan, a good FA will badger you about that and offer discussion that will help you with your lawyer. They also understand the ins and outs of ACA and of taxation on social security, your state'e estate tax if any, etc. etc. I have no firsthand knowledge but the Garrett Planning Network and napfa.org seem to get good reviews around here. Look for FAs that will work on an hourly or project fee basis, not ones that want to charge an AUM wrap fee. Interview several if at all possible.
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Old 02-24-2021, 06:03 PM   #4
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Why not use PC for the first 3 months only at no charge, as some advice will last theoretically much longer than that time frame?
Then if you wish, you run by the suggestions through folks on this site and compare the responses?
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Old 02-25-2021, 07:41 AM   #5
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I don't think a CPA gets into all those issues. But they probably know others who will help you with planning. I personally would not go down that road.
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Old 02-25-2021, 08:38 AM   #6
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Here's a practical, maybe-not-so-obvious, suggestion to help you in your decision process:
Put each one of your bulleted questions on a separate sheet of paper. Then do some basic research for each one. That basic research may be all that you need to answer the question. If not, perhaps you'll have SOME of the information, and then just need some very specific questions that need clarification. Voila, at that point you have resolved your dilemmas, or know what direction you need to go.
One example: this link https://www.mortgagecalculator.org/c...calculator.php can help in estimating your income tax liability, and if/how much Estimated Taxes you need to plan for. If this link suffices for your needs, that's one less piece of information you need from a CPA. "etc. etc."
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Old 02-25-2021, 10:10 AM   #7
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Your questions are faily elementary for this crowd.... which includes a handful of retired CPAs with an interet in retirement finance and a bunch of other smart people. Why don't you start a new thread on the questions that concerns you the most with some details and see what happens?

If you do seek a CPA, look for one with a Personal Financial specialist (PFS) designation.
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Old 02-25-2021, 10:55 AM   #8
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Thank you all for the responses and suggestions. In my original post, I bulleted out a few examples of the types of tax-related concerns I have, but like whenever you enter something totally new, you don't know what you don't know. Those were just a few off the top of my head and I'm sure there will be many more questions in my first few retirement years.

I understand the point several of you made, that there are numerous resources available here and on similar sites if I'm willing to do a little research and investigation on my own, which I am. I believe I'm going to pull my money back out from Personal Capital and resume my previous plan of managing my own assets. I designed a simple spreadsheet in my head last night to track income. I'll need to figure out some of the income thresholds to be aware of, but I'm sure that info is out there. Thanks again for the help.
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Old 02-25-2021, 11:10 AM   #9
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I would recommend you seek out a financial planner. Look for referrals from friends. It would be great if you could find a fee only adviser to go over your plan with you.

I agree that there is a great wealth of knowledge on this forum. If you have time and are wiling to do the work, settle in and get to work asking questions, doing research and probably creating a spreadsheet or two.

I recommend a financial planner because of your comment - you don't know what you don't know. Also, your original post said you want to go around April. That's not really a lot of time. I spent about the last year of work trying to learn all I needed to know. It helps a lot to have knowledge but it's also good to have someone look things over. It's also expensive to make some mistakes. Personally, I don't have an ACA plan, but I have seen it discussed and realize that if you mess up, you can lose your subsidy. Things like that can be way more expensive than a one time visit to a financial planner.

As to your original question, it's not common that a CPA would be the type of professional you need. It is certainly possible that a CPA could be a good financial planner, but don't expect to just walk into any CPA and get the advice you're looking for. There would certainly be overlap between a CPA and a Financial Planner, but if you go to a CPA, make sure they specialize in Financial Planning.
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Old 02-25-2021, 11:22 AM   #10
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My DD and SIL are both CPAs, they use a financial advisor with expertise in the types of investments they own. My DD, in her capacity of CFO, has hired a CPA that specializes in taxes.

I think a CPA has great value if you own or manage a business. I think it is smart to engage an attorney who specializes in estate matters and ask for a list of financial advisors s/he holds in high regard. The last two should work together to put together a plan for your retirement.
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Old 02-25-2021, 11:29 AM   #11
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Agree with Brat, but I feel compelled to add that I was excited when I found a local who was both an estate atty and a CPA. Unmitigated disaster. (To be fair, they were distracted by family matters.)

The vetting process for advice on this forum and other fora is hard to beat.
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Old 02-25-2021, 11:36 AM   #12
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My 401K was administered by Fidelity so I ended up there with all my accounts. They will assign an advisor to assist you, mine is at no charge. I took my plan to her before the day and she reviewed it and pointed out areas of concern. I need with her once a year and she does bring up out wills (delayed updates due to virus) and some other issues. If you have Account(s) at Fido I would suggest this is a place to start. At least you can get a basic layout and get questions answered. No advice on wills or tax specifics but general questions have been answered
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Old 02-25-2021, 01:11 PM   #13
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I found a Fee only FA who is also a CPA. She knows both worlds and has been really good to help me only in the areas I needed.
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Old 02-25-2021, 02:36 PM   #14
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Be careful with the phrase "fee only." It distinguishes FAs who are paid commissions on products from those who are paid by the client. The former is not a fiduciary. But "fee only" encompasses FAs who are paid via a wrap fee % of assets as well as the rarer ones who are paid an hourly rate or a flat rate for jobs like preparing a financial plan. Just seeing "Fee only" may not tell you what you want to know.
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Old 02-25-2021, 02:46 PM   #15
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Originally Posted by OldShooter View Post
Be careful with the phrase "fee only." It distinguishes FAs who are paid commissions on products from those who are paid by the client. The former is not a fiduciary. But "fee only" encompasses FAs who are paid via a wrap fee % of assets as well as the rarer ones who are paid an hourly rate or a flat rate for jobs like preparing a financial plan. Just seeing "Fee only" may not tell you what you want to know.
Not sure if this is common, but when I was considering moving my money to an FA, they did a one time plan for a very reasonable price. I ended up going with the FA for reasons not relevant to this thread, but I got a lot of information and a formal plan as part of the get to know each other phase. They credited the cost of the plan against my first year's fees but I could have said thank you, and paid them the flat fee for the analysis. So, if you're just looking for the initial model and a consultation, that may be one avenue to get it. It included two meetings (an intake meeting and a presentation meeting) and a formal written plan. The plan discussed things like when to take SS, whether to take my pension as a lump sum or monthly payments, recommendation on ROTH conversions and a few other things. It also had some to-do's like getting an estate plan and considering an umbrella liability policy. It was pretty comprehensive.
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