Stop me before I do something stupid

[Montecfo]

I would consolidate at Fidelity or E-Trade since you know them (which do you like?),

Or

Go to Td Ameritrade. They have some really nice tools. I would not go with a really small brokerage just from a SWAN viewpoint. I do not want to be thinking about my brokerage.

Oh and these brokers other than Fidelity will give you money to move assets there. As about that. I always do at E-Trade and they always give me money to add funds.

On distributions, you need tax advice paid as needed, not FA fees that never end.

Good luck.

 

[pb4uski]

..... I know traditional wisdom says to take from taxable accounts first, then trad IRA, then ROTH, but that's a rule of thumb. The correct answer is surely a combination of those, and how does one determine the correct mix?

For us it is pretty easy... we live on taxable account... then we do Roth conversions from tax-deferred accounts (currently) to the $80,000 top of the 0% preferenced income tax bracket (that's $104,800 of total income for a couple filing jointly in 2020) so our Roth conversion is $104,800 less interest, dividends, pension, etc.

 

[FANOFJESUS]

I think Fidelity or etrade would be the best since they both offer checking accounts. It just makes it handy went you need money. You might want to look into Vanguard LifeStrategy Moderate Growth fund. It is also 40% bonds. That would be super simple for you. More taxes than a three fund portfolio but so simple and no fees from Ed J. That is if you want super easy. You would just have to look at the taxes to see if you are ok with that. That way you could go with one brokerage and one fund.

 

[bruck64]

Try speaking to a Vanguard Personal Advisor

I would suggest calling Vanguard and setting up a 30 minute conversation with Vanguard‘s personal advisor service. They will do a free analysis and even provide you with a proposed allocation of their ETFs and funds. They will also make recommendations on how to withdraw funds (taxable accounts first, then IRA’s, then Roth’s).

The analysis and report they give you are free.

 

[Koolau]

I agree with consolidation (I happen to like Vanguard) AND getting away from FAs who are, in effect, sales people. If you want FA assistance, I suggest hiring a fee only FA to help in your moves and overall planning.

I talked to a so-called FA who made money on fees and on sales. This was many years ago. In essence I was told that they would get me in and out in such a way that I would make more money. I asked "what if you mess up - do I get my money back.?" Crickets! So, my take, you WILL be responsible for your own results no matter who you "hire" to help you. You might as well hire yourself. No one will be more interested in doing it right than you will - even if you don't "know" as much as the "experts."

I happen to like (more or less) set and forget indexes. They aren't sexy and they probably won't make outstanding returns. But they're unlikely to tank unless the markets tank. You can wake up in the morning, check the markets and know about where you stand. You don't have to "do" anything except rebalance according to your plan. I consider myself a good saver but lousy investor. So "auto pilot" works for me. As always, YMMV.

 

[OldShooter]

... I happen to like (more or less) set and forget indexes. They aren't sexy and they probably won't make outstanding returns. ...

Indexes for me too, but I beg to differ on returns. I get returns that over 10 years beat 90+% of professional stock picker funds. I call that outstanding.

 

[Koolau]

Indexes for me too, but I beg to differ on returns. I get returns that over 10 years beat 90+% of professional stock picker funds. I call that outstanding.

Yeah, I agree. Just sayin, with indexes, you probably won't be getting 14% when the market is making 8%. I'll settle for the 8% without worrying about the 14% suddenly becoming -6% the next quarter. I'm not smart enough to pick individual stocks so I'm not smart enough to pick this year's "high flying" MF. YMMV

 

[OldShooter]

... I'm not smart enough to pick individual stocks so I'm not smart enough to pick this year's "high flying" MF. YMMV

You're too hard on yourself. Picking winners is strictly a matter of luck, and luck is not predictable. Nobel prize winner Eugene Fama and his research partner Kenneth French tried to identify winning MF managers ( https://famafrench.dimensional.com/videos/identifying-superior-managers.aspx ) and failed.

 

[2177V]

I'm 59 and hoping to retire next spring. I have about 2.3m, but it's spread out in three piles and I want to consolidate it into one big pile and am trying to figure out if I should DIY or turn it all over to a FA. I've opened an account with M1 Finance (anyone else using this online brokerage?) and what I am considering doing is to create a pie made up of Vangaurd ETFs something like this:

Vangaurd ETF Asset Class % Allocation

VOO Large Blend 10%

VOOV Large Value 10%

VIOO Small Blend 10%

VB Small Value 10%

VXUS Total Intl 10%

VNQ REIT 10%

BND Total Bond 40%

Currently, my holdings are spread across Fidelity, Ed Jones, and Etrade and they look like this (in Ks):

Fidelity:

Taxable - 123

Trad IRA - 1134

401K - 127

Ed Jones:

Taxable - 47

Wife's IRA - 58

Wife's ROTH - 142

My ROTH - 138

ETRADE:

Taxable (stocks) - 311

Wife's ROTH - 88

My ROTH - 88

Right now, I'm paying Fidelity to manage my IRA and some of the other money, and of course I'm paying Ed Jones. I was thinking I would close out my Ed Jones money and move my IRA into the pie above and my ROTHs into a similar pie. I think I'm paying Fidelity about .83% and I don't even know what I'm paying EJ, but I know it ain't cheap.

So I guess my questions are, does it make sense to do this? Is this basically what others are doing?

A big concern I have with DIY retirement investing is, how do you know which account to draw from to minimize your tax liability? If I turned it all over to a FA, they would be able to help with this. Thank you for the input and advise!

My suggestions:

1. Since your are considering a FA, passive index fund investments with low fees may be suitable if you want to DIY.
2. Since you both ROTH accounts and taxible accounts, you have flexibility how you want to withdraw. Some people would withdraw from a taxible account first until they hit a higher tax bracket...and then they stop, and start withdrawing from the tax free ROTH to make up the difference.
3. I would separate your accounts and your wife accounts into different investments. Remember to "sell high". If your wife's account are relatively higher compared to yours, then withdraw from her accounts more...and vice visa. Your wife should agree to this strategy.
4. Consolation makes life simple...but make sure your fees do not go up.
5. I am a proponent of the bucket strategy: First bucket has a time horizon of 0 to 5 years which consists of low risk bonds for liquidity since you should be withdrawing from the first bucket. Second bucket has a time horizon of 5 to 10 years which consists of a target retirement fund or a balanced index fund. The last bucket has a time horizon of 10 years plus which you can invest aggressively in the S&P500.
6. Another withdrawal option is to keep your diversified portfolio of large blend, large value, small blend, small value, total INTL, REIT and Total bond...except add a treasury fund to this mix. When you retire, select the fund that is the highest relative to the others to withdraw. This will be consistent with the "sell high" strategy.
7. Since you are concerned about tax liabilities, I suggest consulting a Certified Public Accountant or CPA. A CPA generally charge $75 to $150 an hour in California and they know the tax laws better than a FA. A FA also has a conflict of interest because they want to manage your savings and get a small percentage of your nest egg. I personally had better advice from a CPA than a FA regarding tax issues.

You will get a lot of advice on this subject so select the one that makes sense to you. Good luck.

 

[jeroly]

If you are a disciplined investor you can save significant money if you diy.

If you are not a disciplined investor and need someone to do the asset reallocations when things get out of whack, talk you out of panicking when the next correction or bear market happens, consider using a cheap FA at somewhere like Vanguard where they only charge something like 0.3% vs whatever exorbitant rate EJ charges - plus you don't have to worry about being put into funds that your FA is grabbing commissions on over and above their AUM fee.

As far as your asset allocation goes - I'd argue that it's overly complicated, just use a three fund portfolio (total market, total international, total bond). That way you aren't taking a risk that your value and reit overweighting underperforms.

As far as tax issues go - consider keeping as much of your bond allocation in your traditional IRA portion of your portfolio as is practical, so the RMDs you will eventually get hit up for will be minimized.

 

[PointBreeze]

I would consolidate at Fidelity, and DIY. I did just that myself.

+1. Did this myself a year ago.

 

[Ncc1701]

It sounds like you lack the confidence to manage things on your own and there's nothing wrong with that. You're just paying too much for help. #1 Stop paying Edward Jones. #2. If you are enrolled in Fidelity Portfolio Advisory Services (PAS) that product is way overpriced. #3 - If you are comfortable with doing things online and don't mind 10% of your allocation in cash, take a look at Schwab Intelligent Portfolios Premium. #4 Ask Vanguard if they can help you with your preferred allocation thru their PAS service #5 If you don't like the Schwab or Vanguard options, Fidelity has a lower cost service called "Fidelity Go" that may fit the bill. Good Luck.

 

[JeKa]

I would want to know what M1 charges before I moved anything.
Read up on various portfolio allocations. Educate yourself with reading like https://www.bogleheads.org/wiki/Lazy_portfolios

Also you have a bulk in Fidelity so I would think about moving it all to Fidelity or moving it all to Vanguard. I had a Fidelity account thru my employer and started a Vanguard to roll my buyout. I ended up rolling my Fidelity over to Vanguard to cut my expense down to .10%.
You have handled this part, now take charge of your own investments. Vanguard also offers investment advice like Fidelity does. Either firm should do you well if you take on the management yourself. If you don't like handling your own investment after a while, you go back to Fidelity or Vanguard and let them handle it.

 

[levindb]

Some FA's are not permitted to give tax advice, even if they have that knowledge, because of their company policies. A FA with CFP certification could help you manage taxes as well as investment choices and estate planning.
If your 401(k) has stock from the company, check into NUA tax advantage before removing any funds from that account.
I have been comparing myself to a colleague for the past 8 years. He is DIY with 7 index funds. I use FA and pay .85% of AUM. After fees, I have 8.8% ROI compared to my colleague who has 8.4% ROI...but you have to understand all the different ways fees are collected/harvested to make sure you understand whether an FA adds value.

 

[MarkiePippo]

I noticed that you will have something over $1m in an IRA at retirement. While that is commendable it will cause you some issues with taxes. Your RMDs will in effect make you Social Security possibly taxable. You might want to consider doing some Roth Conversions to lower the RMD level. I am 59 and my income will go up significantly when I turn 72. I am making some changes to avoid that issue. Tax rates will be going up in the future no matter who is elected.

 

[ZachTB]

My parents recently did something vaguely similar in a DIY manner. Here's the secret:

You have to ask for a "direct transfer" of assets.

You request a direct transfer from the current plan (e.g. Edward Jones) into the destination plan (e.g. M1 Finance, which I've never heard of and therefore can't evaluate effectively).

The direct transfer is from institution to institution, so the money never hits your hands and you can therefore dodge some tax-related oopsies, such as failing to get the money into the new account in 90 days.

It would still be wise to consult a tax advisor like an accountant, who may have more insight into tax implications and legal limitations. It may also depend on the rules of the plan, such as the 401k. You should probably call the current plan administrators to get the relevant info, such as whether there are limits on how much $ you can transfer at a time.