Vanguard did a financial plan for me as well, for free. They would also help manage my Vanguard accounts for a small %, as well. I didn't go for that option.
Hiring a Financial Planner
- Thread starter meleana
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Vanguard did a financial plan for me as well, for free. They would also help manage my Vanguard accounts for a small %, as well. I didn't go for that option.
LOL!
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Tell us about your Vanguard financial plans please.
Did the plans cover things like
Disability Insurance
Life Insurance
Homeowners Insurance
College Savings
When to take Social Security
When to take a pension
What to do if either spouse dies
Buying a home, saving for a down payment
Estate planning, Wills
Planning for replacement automobiles
Reducing income taxes now
Reducing income taxes in the future
Day care expenses
how to pay off student loans
whether to pay off mortgage or use the money to invest
and other living life decisions involving money
Or were the plans mostly how to invest money?
Did the plans cover things like
Disability Insurance
Life Insurance
Homeowners Insurance
College Savings
When to take Social Security
When to take a pension
What to do if either spouse dies
Buying a home, saving for a down payment
Estate planning, Wills
Planning for replacement automobiles
Reducing income taxes now
Reducing income taxes in the future
Day care expenses
how to pay off student loans
whether to pay off mortgage or use the money to invest
and other living life decisions involving money
Or were the plans mostly how to invest money?
Mine was strictly financial, however there was a "checklist" of other things to they considered important for me to review, or seek others guidance on. Will, power of attorney, life insurance however if I did ask about a college savings plan, they would've given me guidance. Taxes, I was directed to a CPA. Estate planning and I was directed to an attorney specializing in that.
With my Schwab advisor, whom I had do a (strictly) financial plan as well, I've asked him about recommendations on when to take SS and after reviewing our finances, made the suggestion of waiting till 70. Again, tax implications/estate planning they directed to other professionals.
With my Schwab advisor, whom I had do a (strictly) financial plan as well, I've asked him about recommendations on when to take SS and after reviewing our finances, made the suggestion of waiting till 70. Again, tax implications/estate planning they directed to other professionals.
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My experience with Fidelity was that it did not address the above questions at the level needed. I’m curious about Vanguard.
Fidelity did a pretty good job at investment planning and to some extent addressed SS and estate planning, but my main question was about my withdrawing money and basic cash flow and tax strategies. They had nothing. They never even mentioned RMD’s. Hey, for free, it was a professional to talk to that helped move my knowledge forward, but it was not a financial plan and was not close to what we got from a certified financial planner.
target2019
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Vanguard provides a CFP, but they only address the Vanguard component of your plan.
https://personal.vanguard.com/pdf/vfpagrmt.pdf
With any plan, you'll have to revisit the plan yearly, as the facts and assumptions will probably change in your circumstances.
https://personal.vanguard.com/pdf/vfpagrmt.pdf
With any plan, you'll have to revisit the plan yearly, as the facts and assumptions will probably change in your circumstances.
target2019
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Helpful link!
And always check what is presented, as things do change. For example, Roth IRA Contribution Limit if 50 or over is now $7,000.
24601NoMore
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I wasn't impressed one bit with the Vanguard "plan". It basically said something along the lines of..
Sell everything else, and buy VBTLX (VG Total Bond) and VTSMX (VG Total Market) in certain percentages based on your age and risk tolerance. (Ok, it may have also included their TIPS fund and maybe one or two others, but that was pretty much "it").
That is not a financial plan..but, it was worth what I paid for it also..
A good plan is going to lay out expected income streams, expenses, when to take SS, umbrella and LT care insurance, projected burn down from pre-tax and after-tax accounts, break everything out by year, etc. I don't need a FP telling me what % my AA should be, or even what funds they think I should invest in. I have that part covered.
Unfortunately, with very few exceptions, there does not seem to be many "FPs" that will put something with all of that together. Instead, they focus primarily on your investments, and want a recurring AUM fee (often totaling thousands of $$S annually) to do so. No thanks. If I ever use a FP, it will be fee-only - but finding one who can tackle everything I think a financial plan SHOULD tackle is like looking for a purple unicorn..
Sell everything else, and buy VBTLX (VG Total Bond) and VTSMX (VG Total Market) in certain percentages based on your age and risk tolerance. (Ok, it may have also included their TIPS fund and maybe one or two others, but that was pretty much "it").
That is not a financial plan..but, it was worth what I paid for it also..
A good plan is going to lay out expected income streams, expenses, when to take SS, umbrella and LT care insurance, projected burn down from pre-tax and after-tax accounts, break everything out by year, etc. I don't need a FP telling me what % my AA should be, or even what funds they think I should invest in. I have that part covered.
Unfortunately, with very few exceptions, there does not seem to be many "FPs" that will put something with all of that together. Instead, they focus primarily on your investments, and want a recurring AUM fee (often totaling thousands of $$S annually) to do so. No thanks. If I ever use a FP, it will be fee-only - but finding one who can tackle everything I think a financial plan SHOULD tackle is like looking for a purple unicorn..
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gtweath
Dryer sheet aficionado
VanWinkle
Thinks s/he gets paid by the post
I like to buy vehicles that are one or two years old with low miles. None of those would be available if someone wasn't buying new vehicles. Some people get more security out of a new car, even though they are paying a premium for it. The same could be said for investing- security from oneself can be worth a premium also. As long as you know what the premium is, then it is a decision based on facts.
I don't proclaim to be a good investor and hence I stick with simple index funds. But the simple index funds beat, in most cases, managed funds. That may change over the next few years, but I make no plans in changing.
Google SPIVA at some point. I can't get it to load right now, for some reason, but when I looked at it earlier this month, the simple S&P 500 fund still beat the crowd by nearly 80% of active managers.
I believe Vanguards own personal 401k's, for their employee's, have been switched over to a Total Stock Market Index option, away from the S&P 500.
https://www.marketwatch.com/story/v...have-sp-500-funds-in-the-401k-plan-2018-06-06
This is SPIVA data from 2016
https://www.spglobal.com/en/research-insights/articles/SPIVA-US-Scorecard
Google SPIVA at some point. I can't get it to load right now, for some reason, but when I looked at it earlier this month, the simple S&P 500 fund still beat the crowd by nearly 80% of active managers.
I believe Vanguards own personal 401k's, for their employee's, have been switched over to a Total Stock Market Index option, away from the S&P 500.
https://www.marketwatch.com/story/v...have-sp-500-funds-in-the-401k-plan-2018-06-06
This is SPIVA data from 2016
https://www.spglobal.com/en/research-insights/articles/SPIVA-US-Scorecard
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It's better if they are not nearby in my opinion. Pick one in a location you like to visit. Do most meetings by phone and then do once every few years in person... a tax deductible trip for tax/financial planning. I think that's deductible!?
Plus, I know for me I'd rather have someone far away knowing my business. Local people have big mouths and I don't need my finances being known about.
SumDay
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GREAT suggestion CaliKid!
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
My Vanguard plan was focused mostly on whether we "had enough" and asset allocation. Pretty basic stuff and what I expected. I've never seen or heard of a plan that covers all the bases that LOL! listed in post #52... especially for free. That would be a custom plan and cost big $$$.
OldShooter
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Yes. S&P has been publishing those reports twice a year for fourteen years and they are all the same. There is just a little jitter in the percentages from one six-month period to the next. Here, coincidentally from 2016, is a graphical version:
So, you say, "No problem. I'll just be sure to hire only managers who will outperform."
There is a second, equally valuable, recurring S&P report called the "Manager Persistence Report Card." What it shows, every time, is that past performance absolutely does not predict future results. Basically, the top managers from the past five years are no more likely to excel during the next five years than any other fund manager on the list. Its completely random. All luck, no skill. This is super-counterintuitive. Very hard to accept, but it is true. There are also academic studies that confirm this.
For those who are interested in this strategy I'd suggest reading "The Coffeehouse Investor" by Bill Schultheis. (http://www.coffeehouseinvestor.com/) I met Bill on an investment advisor survey trip for a nonprofit. He is in Seattle and he is the real deal. His business partner is a CPA, so they have that base covered too. Plus, what other author gives you a recipe for pumpkin pie?
(His book is a good read even if you're not looking for an FA and don't bake pies.)
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Honestly- no one knows us around here hardly. We live a pretty secluded life. I have absolutely no worries about that.
Then again- we will be moving out of state in another 2 years so the local guys will be not so local anymore.
Perfectly reasonable. So look for an hourly fee-only fiduciary planner.
Are you sure about that combination?
All the financial planners in Edelman are employees, not independent. I suppose it's possible, but I'm surprised Ramsey would vet any of them.
Did you ask for an explanation? My planner explains everything when I ask. And I always keep asking until I understand. That's what they are being paid to do.
I'm in a similar quandry with Meleana, the OP, but for different reasons. We have a sizeable 401K account with TRowe Price as well as IRAs and other 401Ks, but we've only spoken twice to a TRowe Price advisor, once when we retired in 2013 and recently last December when I inquired about moving half of my TRowe account funds to TSP. I've been quite happy with the online tools TRowe has for us. It serves my needs, though I don't really use it alot. (TRowe gives me a 97 percent confidence factor for retirement success, which is kinda strange since my Federal pension covers all of our retirement needs, and then some -- this confidence level is also dependent on the level of income you think you need for retirement with TRowe generally establishing a 70 percent baseline of your last annual income level.)
I have been DIYing most of the issues raised by Meleana, with occasional help from professionals in specific fields. I don't think there is a Jack-of-all-trades CFP who can handle all the issues raised: SS strategies, Tax issues, real estate relocation matters, investment portfolio management, and estate and legacy planning. Even those CFPs in the Garrett Network have their limitations -- and most will use the same software planning tools available to all CFPs -- and I have yet to find any CFP as knowledgeable as those posting here or on Bogelheads when it comes to Roth Conversions and tools available to optimize Conversions.
In our case, we were very comfortable with SS stratagies (I'm WEP reduced and took SS at 64; wife at 66 took spousal benefits on my PIA and will take her own retirement benefits at 70, in two years.) We use a trusted CPA for tax issues and our returns are fairly complicated with personal and partnership returns. I file my BIL's tax return as he has MS and no longer capable of managing his financial affairs. And I file a 1041 Trust Return for an Irrevocable Trust my MIL established shortly before she passed away in 2017.
Our professional support for estate planning, including MIL's plans were primarily our estate planning lawyer and tax software, but a lot of this legwork -- funding Trusts, re-tiltling assets, selling assets, etc -- was done by ourselves. Similarly, relocation issues -- we moved from Virginia to NC -- were primarily addressed by skillful real estate agents and we also had a complicated 1031 exchange issue which we handled by ourselves with a 1031 exchange intermediary. And for Medicare and other health insurance issues, we don't believe any of the "advice" we've seen from Medicare insurance specialist and literature covers the waterfront as well as information from online blogs like M. Kitces, especially when it comes to IRMAA issues.
Though I feel very confident going forward that we can continue to manage all of our financial house, as the primary financial caretaker in my family with a spouse that is not very interested in these matters, it makes sense to me to enlist the aid of a CFP primarily for succession planning. If I'm no longer around (or if both of us are no longer around to tell our heirs about estate issues), I'd want a professional/CFP to be knowledgeable about our financial resources to help the survivor or heirs navigate, initially, our financial assets. Also, a once a year check-up or review by a CFP would be a good idea to ensure that our plans aren't de-railed by potential cognitive issues like dementia or CRS ("Can't Remember Sh*t) and it would be a good way to brief the less financial knowledgeable spouse about finanical matters, annually.
I have been DIYing most of the issues raised by Meleana, with occasional help from professionals in specific fields. I don't think there is a Jack-of-all-trades CFP who can handle all the issues raised: SS strategies, Tax issues, real estate relocation matters, investment portfolio management, and estate and legacy planning. Even those CFPs in the Garrett Network have their limitations -- and most will use the same software planning tools available to all CFPs -- and I have yet to find any CFP as knowledgeable as those posting here or on Bogelheads when it comes to Roth Conversions and tools available to optimize Conversions.
In our case, we were very comfortable with SS stratagies (I'm WEP reduced and took SS at 64; wife at 66 took spousal benefits on my PIA and will take her own retirement benefits at 70, in two years.) We use a trusted CPA for tax issues and our returns are fairly complicated with personal and partnership returns. I file my BIL's tax return as he has MS and no longer capable of managing his financial affairs. And I file a 1041 Trust Return for an Irrevocable Trust my MIL established shortly before she passed away in 2017.
Our professional support for estate planning, including MIL's plans were primarily our estate planning lawyer and tax software, but a lot of this legwork -- funding Trusts, re-tiltling assets, selling assets, etc -- was done by ourselves. Similarly, relocation issues -- we moved from Virginia to NC -- were primarily addressed by skillful real estate agents and we also had a complicated 1031 exchange issue which we handled by ourselves with a 1031 exchange intermediary. And for Medicare and other health insurance issues, we don't believe any of the "advice" we've seen from Medicare insurance specialist and literature covers the waterfront as well as information from online blogs like M. Kitces, especially when it comes to IRMAA issues.
Though I feel very confident going forward that we can continue to manage all of our financial house, as the primary financial caretaker in my family with a spouse that is not very interested in these matters, it makes sense to me to enlist the aid of a CFP primarily for succession planning. If I'm no longer around (or if both of us are no longer around to tell our heirs about estate issues), I'd want a professional/CFP to be knowledgeable about our financial resources to help the survivor or heirs navigate, initially, our financial assets. Also, a once a year check-up or review by a CFP would be a good idea to ensure that our plans aren't de-railed by potential cognitive issues like dementia or CRS ("Can't Remember Sh*t) and it would be a good way to brief the less financial knowledgeable spouse about finanical matters, annually.
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This FP was referred to me through Dave Ramsey's Smart Investor program- yes I am sure. He supposedly vets some FP's and this guy is one- that is why he was referred through his program.
And Edelman now has merged with Financial Engines.
I did not ask this guy about the difference between his suggestions and the tool, but I do remember asking the same to the T Rowe Price Advisor this because their Future Path tool said the same thing and yet he was saying more stocks and less cash (sure- they want my bank account money). He said he used the Monte Carlo thing and well- so does Future Path.
He actually did not answer me- just evaded my question.
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Strange.
Maybe he was referred before he became an Edelman employee.
Whatever. You need hourly help from a fee-only fiduciary planner.
That is funny. The T Rowe Price Future Path tool puts us at 98% with or without more stocks, And- we have no pensions.
What is TSP?
There are CPA firms that do holistic financial planning. They coordinate and work with estate attorneys. They most certainly can help with a SS strategy and a strategy to withdraw funds to live on that are the most tax advantaged. They can tell us how much we can safely withdraw.They can also give some insight into our relocation dilemma and what we can afford to pay for another home.
We actually might try to sell our home ourselves since it has not appreciated in 31 years and paying the real estate commission will make things worse for us. Of course, we would have an atty.
My spouse also is not into the finances and neither is our son, so another reason to have some professional help and maybe someday to manage our investments also.
I have always been a do it yourselfer but I am becoming overwhelmed and it would be nice to just have someone pull it l together for us. I do our taxes and I do our son's taxes.
I would like to have a life and have everything more or less on autopilot. I just need a plan and some help and then can take off from there.
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Maybe. But there was also another one from Edleman that was referred.
Yes- right. Is all a matter of semantics. Some are fee based; some are fee only; some are hourly; some are annually; some are quarterly; some are by the visit. Can drive a person nuts!
I am going to call some CPA firms and also an hourly CFP through Garrett that looks like he has hourly fees.
CRLLS
Thinks s/he gets paid by the post
I would go with an hourly or a fee for service type FP if you are inclined to seek "professional" direction. The previous chart by OldShooter in post #40 is pretty telling IMO. What is missing in that post is when the market takes a loss of, say 20% of a 1,000,000 investment, you loose $200,000 (understandable) and still have to pay the FA an additional $10,000.
I used to think that people use FA's because they are insecure in their ability to manage their finances. I recently have changed my opinion to people somehow wanting someone to blame when things go South. It is a lot easier for someone to accept that "he" lost my $210,000 instead of admitting that "I" made a mistake that made me lose $200,000. Right or wrong.
I used to think that people use FA's because they are insecure in their ability to manage their finances. I recently have changed my opinion to people somehow wanting someone to blame when things go South. It is a lot easier for someone to accept that "he" lost my $210,000 instead of admitting that "I" made a mistake that made me lose $200,000. Right or wrong.
Future path says we should draw down $17.6K in income per month. We don't need that level of income even with ambitious travel plans. And Future Path does not include my wife's Social Security retirement income at age 70
TSP is the Federal Government's 401K type plan for Federal employees: Thrift Savings Plan. It is also now open to our nation's military service members.
I don't deny that there are CPA firms that purport to do what you say they do. My estate planning lawyer works with one as well, but typically I haven't found them very talented even on issues like stretching out Roths for legacy planning. Perhaps, you'll find one of them they covers everything you desire. I really don't think these purported holistic CPAs or CFPs have a better handle on SS strategy than those who post on Bogeheads and no one can really match the detailed analysis that is sometimes provided by people who post there like the person with the screen name #Cruncher on Bogelheads.
Not sure I'd agree with that approach. I was once a licensed real estate agent for two years and my wife and I practiced law for over 70 combined years (with wife having dabbled in real estate transactions as well). We've always used real estate agents but we've always been successful in negotiating reduced real estate commission rates.
I think you can put the investments on auto-pilot as well as your draw downs. Make life easier for you by doing a 3 Fund Portfolio, recommended on the Bogelheads forum.
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Brat
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
My DD and her husband are both CPAs with young children BUT he has a health condition that will shorten his lifespan. They also have interests in businesses that are not yet publicly traded. Their situation is complex so they consult with an expert. They found this expert through recommendations of their peers.
IMHO they should first find an attorney who is a specialist in elder law and estate planning to assure that they have the paperwork they need such as a revocable living trust, wills, POA healthcare and the like. Make a list of all your assets, how they are titled and if there are beneficiaries specified. Find that attorney by word of mouth in your community. If you plan to move to another state make sure that attorney is familiar with that state's inheritance laws.
Ask that attorney for a referral to a FEE-based FA, ask that attorney why they think each on their recommended list would be good. The OP, and spouse, should meet with a FEE FA at least once so that they can put together a to-do list to assure that they are prepared for retirement.
Keep your investment plan simple and in no-load low fee funds.
Always ask the attorney and the FA "why do you recommend that". Before you act always understand the reason and in the case of the FA know if they are taking a bite out of the investments they recommend.
IMHO they should first find an attorney who is a specialist in elder law and estate planning to assure that they have the paperwork they need such as a revocable living trust, wills, POA healthcare and the like. Make a list of all your assets, how they are titled and if there are beneficiaries specified. Find that attorney by word of mouth in your community. If you plan to move to another state make sure that attorney is familiar with that state's inheritance laws.
Ask that attorney for a referral to a FEE-based FA, ask that attorney why they think each on their recommended list would be good. The OP, and spouse, should meet with a FEE FA at least once so that they can put together a to-do list to assure that they are prepared for retirement.
Keep your investment plan simple and in no-load low fee funds.
Always ask the attorney and the FA "why do you recommend that". Before you act always understand the reason and in the case of the FA know if they are taking a bite out of the investments they recommend.
Yes. That is why I am turned off by the high advisory fees as a percentage of assets.
Also- though- if you lose $200,000 out of 1 million in a market correction, then wouldn't the advisory fee be less since it is based on a percentage of assets?
