Hiring a retirement planner

[MrSmee]

Sorry if this has been asked - I did a search and did not see a similar thread. Has anyone hired a retirement planning firm to create a detailed plan?

I am about 18 months out. The more I learn the more I realize I don't know. I'm over answering the question of "Can I retire?" and feel like I need a detailed plan to minimize tax via my withdrawal plan. If a $1000 could save me several thousand in taxes over the next 10 years it would be worth it. I don't want to do the detailed accounting myself but I don't know if just going taxable, tax deferred then Roth is going to get me the best result.

If you did:
- How did you choose an advisor?
- Was it worth it?
- What questions did you ask?

[Jerry1]

I got referrals. A number of the executives I worked with use the firm so I went there.

Yes, it was definitely worth it. I knew a lot from this forum, but they put it all together in a very comprehensive plan.

They asked all the questions and then put together a plan. Once they presented the plan, they answered all my questions.

The cost was $1500. Their goal was to get me to use them as a Financial Advisor going forward. Keep that in mind. It’s a sales pitch but definitely nothing high pressure. Very professional. I did end up going with them and have been very satisfied. They were very helpful in the beginning. Now, especially after last year’s performance, I’m thinking it’s time to go it alone. It was nice to have them in the beginning of retirement. Now, about 4 years out, that value is pretty much gone.

[tominboise]

I used a financial guy based on referrals. I didn't want and don't need an investment manager, but I did use him to review my assets, allocations, incomes and whatever else. I specifically wanted information on managing income for ACA subsidies, Roth conversions and managing RMD's when I get to that point. It was money well spent. As mentioned, it was a one time event, but he and I have kept in touch and he has answered a few questions along the way, gratis.

[COcheesehead]

I took a three day class at the community college taught by a licensed planner. I think he used it as a lead generator, but the end result was a good plan for less than $100.

[Spock]

1. I wouldn't blindly trust what an advisor suggested anyway.
This is going to sound cynical "but"
My former employer provided financial consultant help from what is/was Ameriprise.
Since they have access to all of the 401K info and whatever else you load in they can develop an asset draw down plan.
1st time I used them it looked OK.
The 2nd time the "advisor" is some kid fresh out of college where his online resume listed his greatest accomplishment was being captain of his field hockey team. The same asset draw down plan graphs that he sent were nonsense... to the point of starting tax deferred draws well after the IRS mandated RMDs were supposed to start.

2. There are tools such as i-orp that will spit out a draw down plan and it's free.


3. I haven't found a comprehensive asset/tax/SS planner that included all the variables so I ended up building my own spreadsheet. While you stated you don't want to do that, I'd look at it as " If a $1000 could save me several thousand in taxes over the next 10 years it would be worth it." equates to "if several hours of my time can save me several thousand in taxes".

4. lastly... I'm finding circumstances change enough to making a 10 year plan moot. My spreadsheet does go out 30 years, but the only real focus is on the near milestones: start medicare (3 years), start SS (tbd 0 to 8 years), roth conversions, and start RMDs (this is well into the fog but the size of the RMDs then is relevant to when to start SS).
Interest rates in the last 8 months have totally changed my SS start date from 62 to 65 to 70. New legislation has moved RMDs out 5 years.
With all that change (with more expected) is it worth paying for a draw down plan that can change with a burp from the fed or the stroke of a legislative pen?
"Measure with a micrometer. Mark with chalk. Cut with an axe."

[Still Learning]

We actually found a new tax preparer (prior accountant retired) a few years before we decided to retire in 2019 whose main business was financial planning, who we only used for simple tax preparation until 2019 when we retired 2 years earlier than planned at 61.


Our new consultant turned out to be good for us. We always had a budget, had investment funds at Vanguard, savings, no debt, house we planned to remain in, recent cars/fun toys and a retirement plan that was in actuality an asset growth projection plan. We had 3 meetings in 2019 before we actually retired to review our retirement plan along with tax implications. Each time before we met I prepared no more than 5 questions (usually less) to keep our meetings to one hour. Tax preparation and 3 retirement plan reviews in 2019 cost under $1,000 worth every penny as we submitted our retirement notices. Post retirement we still meet a minimum of once a year during tax preparation to review our retirement plan status.



Sounds like OP already has a good sense of investment/savings amounts, outstanding debt, tax liabilities and most importantly at this stage an honest idea of what retirement they can afford. Sitting with a financial planner/tax consultant several times this year before they submit retirement notifications will definitely provide an important independent analysis.


Good luck.

[Yoheadden]

Quote:

Originally Posted by Jerry1 Yes, it was definitely worth it. I knew a lot from this forum, but they put it all together in a very comprehensive plan.

I would agree with this!

Quote:

Originally Posted by MrSmee I am about 18 months out. The more I learn the more I realize I don't know. I'm over answering the question of "Can I retire?" and feel like I need a detailed plan to minimize tax via my withdrawal plan. If a $1000 could save me several thousand in taxes over the next 10 years it would be worth it. I don't want to do the detailed accounting myself but I don't know if just going taxable, tax deferred then Roth is going to get me the best result. If you did: - How did you choose an advisor? - Was it worth it? - What questions did you ask?

We are planing on ER next year @54 and met with a planner last year.
I felt the same as you. I felt like I knew a little about a lot of things. I did some research online, talked to 3 different companies, but all wanted to try to manage my assets, in addition to a retirement plan. I finally decided to go with a recommendation from my CPA.
As someone mentioned, rates change, inflation changes and plans change, but in our case, it was still worth it. He provided us with a clear income plan of what to take from which accounts, including SS. It can get a little overwhelming when you have different amounts, in different types of accounts and you retire before 59 and a half.
I knew I was paying good money for a limited amount of time, so I went in with a mission statement saying something to the effect of We need a multi-year income plan, taking into account taxes and SS while minimizing sequence of returns risk.
Even though I had used all of the retirement calculators, it also felt good hearing we would be okay from an independent source.

[rodi]

Before retiring I used i-orp, fidelity RIP, quicken lifetime planner, and went to get my plan better by my Schwab consultant (person assigned to me because I have a lot of money at Schwab. Schwab ran my plan through their modeling.

Truthfully, I learn more here than any FA adviser could tell me. A tax CPA might improve things a bit

Strongly recommend i-orp, drilling down, to see the tax implications of withdrawing from tax deferred vs taxable accounts, the impacts of Roth conversions, etc.

[Morgan22]

OP, this thread from Bogleheads.org lists many one time fee only financial advisors. https://www.bogleheads.org/forum/viewtopic.php?t=394961

[meleana]

Quote:

Originally Posted by MrSmee Sorry if this has been asked - I did a search and did not see a similar thread. Has anyone hired a retirement planning firm to create a detailed plan? I am about 18 months out. The more I learn the more I realize I don't know. I'm over answering the question of "Can I retire?" and feel like I need a detailed plan to minimize tax via my withdrawal plan. If a $1000 could save me several thousand in taxes over the next 10 years it would be worth it. I don't want to do the detailed accounting myself but I don't know if just going taxable, tax deferred then Roth is going to get me the best result. If you did: - How did you choose an advisor? - Was it worth it? - What questions did you ask?

I interviewed several financial advisors/planners and bottom line I went with a fee only planner affiliated with the Garrett Network. He interviewed us (and us- him) and developed a plan holistically that is in line with not only our investments, but with our plans for this stage of life, including health, insurances, relocating, Social Security, Medicare, hobbies, family, taxes, Roth conversions, ACA insurance, etc etc. . He does not handle our money- I do that. He charges us an annual fee of $1000 as needed. I can't remember exactly but I think the initial plan was something like $1500. He also has another fee structure where you can pay like $200 per hour instead of annual.


Definitely worth it! I didn't ask too many questions other than the fee structure and the handling of money, and background, etc. I did more listening and went with my gut. I wanted someone who's style would jive with my husband's and my personality as well. Our guy is soft, low key and a true fee only planner. Easy to speak with. We call him, do emails and zoom calls since we moved out of state after hiring him (which he helped us to do!).

[Ncc1701]

Use the Fidelity Retirement Income Planner and save yourself the time, money and hassle.

[Happyras]

Quote:

Originally Posted by Ncc1701 Use the Fidelity Retirement Income Planner and save yourself the time, money and hassle.

+1 also personal capital now called empower, the have a free retirement planner.

[ownyourfuture]

I retired in June 2015. Early 2014, just like you, I was looking to hire a retirement planning firm to create a detailed plan. I found three. The meeting with the first 2 turned out to be nothing more than a sales pitch for Prudential 6% load mutual funds.

#3 actually drew up a detailed plan after the 1st meeting, but it was poorly done, and ironically, the meeting closed with her pushing those same 6% load Prudential funds.

If you decide to go that route, make sure to tell the advisers in advance that you have no interest in moving your money to their firm & investing in load mutual funds.

[SunGuy]

Open an account for Fidelity!

[rkser]

Quote:

Originally Posted by Ncc1701 Use the Fidelity Retirement Income Planner and save yourself the time, money and hassle.

+1 to start with

[TheWizard]

Quote:

Originally Posted by Ncc1701 Use the Fidelity Retirement Income Planner and save yourself the time, money and hassle.

Depending on the complexity of your finances and your personal skill set, it's not too hard to craft your own plan using various free online tools like this.

I've been doing my own income taxes since the 1970s as well, so that helps.

I put together a nice spreadsheet projecting my Adjusted Gross Income year by year from start of retirement through my early 70s (where I am now). The goal of my spreadsheet was to keep my AGI and income tax gradually increasing year by year with no big jumps when starting SS and RMDs.
I did larger Roth conversions in my 60s to achieve this.

My biggest decision, actually, was to set up a comfortable base income at start of retirement (pension/annuity) using a hefty percentage of my 403(b) accumulation rather than retain it as a lump sum.
This has worked out well and is the main reason I have excess retirement income every month now.

Anyhow, managing your own retirement finances is a valuable skill if you can develop it...

[pb4uski]

Quote:

Originally Posted by MrSmee Sorry if this has been asked - I did a search and did not see a similar thread. Has anyone hired a retirement planning firm to create a detailed plan? I am about 18 months out. The more I learn the more I realize I don't know. I'm over answering the question of "Can I retire?" and feel like I need a detailed plan to minimize tax via my withdrawal plan. If a $1000 could save me several thousand in taxes over the next 10 years it would be worth it. I don't want to do the detailed accounting myself but I don't know if just going taxable, tax deferred then Roth is going to get me the best result. If you did: - How did you choose an advisor? - Was it worth it? - What questions did you ask?

At the time that I retired we had enough at Vanguard that they did a free financial plan for us every other year or so and we had a number of them done over the years. Nothing special, but good confirmation.

When I was deciding I ran just about every free retirement calculator known to man and they all gave me various versions of a green light.

I personally like Quicken Lifetime Planner, including in Quicken Deluxe and higher for a basic deterministic plan... it is quite user friendly and covers a lot of bases. I supplemented it with FIRECalc and other similar planners to stress test my plan for sequence-of-returns risk.

And as others have said, I have learned much more here from other forum members than I did from any of the planners that we used.

[Markola]

I’ve elaborated on other threads how we gain a lot of couple’s benefits from having a dedicated Vanguard advisor and participation in their AUM program, and their fees are the lowest I’ve seen at 30 basis points. Customer service has been just fine. I’m also aligned completely with their index fund philosophy, so it’s a good fit that way too.

[Out-to-Lunch]

Quote:

Originally Posted by Ncc1701 Use the Fidelity Retirement Income Planner and save yourself the time, money and hassle.

But this tool does not address which accounts to draw from at which times, does it? I have used it for a long time. I just re-ran it and poked around after reading your post, but see nothing on withdrawal strategies...

[Exchme]

Quote:

Originally Posted by rodi Before retiring I used i-orp, fidelity RIP, quicken lifetime planner, and went to get my plan better by my Schwab consultant (person assigned to me because I have a lot of money at Schwab. Schwab ran my plan through their modeling. Truthfully, I learn more here than any FA adviser could tell me. A tax CPA might improve things a bit Strongly recommend i-orp, drilling down, to see the tax implications of withdrawing from tax deferred vs taxable accounts, the impacts of Roth conversions, etc.

I-orp is an interesting starting point to get a feel for some trade-offs, but I would be very careful about relying on it.

It calculates IRMAA based on the current year income, not two years prior, so it is going to think you can make large Roth Conversions at ages 63 and 64 without IRMAA costs. That automatically means its Roth Conversion plans are not accurate.

I haven't checked, but doubt the tax module was been updated for Secure 2.0? If not, the RMD age is wrong. Last I checked, ACA was also used as a cliff, not a slope. Higher income provisions like NIIT are not included either. (I-orp was down as I'm writing this, so couldn't check my memory on these).

People also misuse it. Most folks are not really looking to spend every dime, that is far too risky. But the rapid spend down drives the entire plan. If folks don't find the entry for the desired estate value, they will get a silly answer.

Trying to leave an estate and limit income in some years for ACA can lead to convergence errors, so you may not get a result or worse, you may get a result that doesn't add up.

The most dangerous item to folks' financial health is if they enter anything for asset allocation other than exactly the same allocations in all types of accounts. Folks that enter a larger stock allocation in their Roth than their IRA will find I-orp tries to empty their IRA through Roth Conversions at lightning speed - not because it's a good idea, but because the program sees the higher return in the Roth account so wants to load that up. In reality, the program is just chasing the higher stock allocation you told it in the Roth, that dominates vs. Roth conversion economics. Before I understood this, it would tell me to do a $million+ conversion in one year which is ridiculous as we will be around the 22-24% bracket if we even things out. I've seen at least one or two newbie posters tell us they did nonsensically huge conversions as a result of I-orp runs.

Like any tool, it has uses and it has its limits. Because folks that are very inexperienced are often sent to I-orp first, they are prone to make errors and may not be able to spot problems. I would tell folks that want to do it themselves to check with multiple tools and if there are differences in results, don't take any action with their money until they understand what's going on.

For folks that don't want to learn all the ins and out of the tax code, I think a one-time-fee-only planner can be a real help.