Fee only financial advisor question.

[pb4uski]

That's important to know, along with how much head room you have in the 12% Fed tax bracket. ....

+1 because it is a no-brainer to at least convert to the top of the 12% tax bracket.... actually, the top of the 0% preferenced income tax bracket... which is $80,000 for MFJ for 2020... add $24,800 of standard deduction and that is $104,800 of total income. Subtract your income before the Roth conversion to get your headroom.

 

[Global Wizzo]

Figuring it out

Hi,
We went through much of what you are doing. I built a spread sheet and loaded fixed income from retirements. SS with changing assumptions, taxes, tax deductions, estimated inflation/cost of living adjustments. We ended up taking wife’s SS at FRA and mine 5 months prior to 70 at the end of the year. For me the cross over point delaying was 8 years or so. When you take SS, if it is started before end of the year, you get the COLA raise. Wait until Jan and you don’t.

I retired at 67 and we lived on cash and retirement incomes with nothing else for the next three years. Did a lot of global travel, going somewhere almost monthly. Have fun.

 

[gerntz]

Boy, isn't that the truth!
"Fee only" has at least a dozen different interpretations, and many of them are pretty close to "X% of assets". It's very important to check that out carefully so you know what you're buying.

Yes, fixed-fee comes in at least two different varieties: A) a %age of assets, and B) a flat, fixed fee. We use the latter. Fee has increased $25/Q in 15 years.

 

[I am He]

I used HR Block software and ran a bunch of calc's. Other programs would be similar and you just have to plug in the correct figures for the tax year of the program (i.e. certain amount change year to year, for instance HSA amounts or your age affecting maximum).

Yeah, it was hours spent and there's rarely a sure fire answer but it gets close enough.

We had a health scare and decided to bite the bullet and do about 1/2 in one year and trickling the balance over the future years. In the end, it'll come out to about 17%, overall Federal, if all goes as planned (and that includes 9.8% computed for ACA subsidy lost as "taxed") PLUS our state tax which is a given whenever the money is converted. But it was in the 22% range for that one large chunk. It could have potentially all been at the 9.8% rate, but "a bird in the hand..." If we went down to a single filer instead of MFJ, that's a serious game changer.

 

[blueskyk]

We love our fee only planner. Initial plan was $1K, ongoing support billed at flat hourly rate. He spent a long time on understanding our goals for retirement. We generally meet once a year to review and revise the plan. This annual check in runs about $250 - $500. There is no management of our assets - we are given the plan on what to do. Now, if you asked him to also manage your assets, he did provide that service.

For us, it’s the best money we’ve spent on threading the needle of our finances in a complex system.

We couldn’t find a local “true” fee only planner ( someone who develops a plan and then periodically meets with you to monitor and advise) so we ended up doing everything online which worked out well.

For us, this has been a huge help at a very reasonable cost.

 

[walkinwood]

Thank you so much. When I asked our accountant he gave us the name of a financial advisor. He was great to speak to but said he doesn’t do fee only.

My question #2 has me questioning if we should start SS for my husband next year at age 68. I have a feeling that the added 8% a year will push us over the edge. I’ve used the last few years interest/cap gains and its pretty close. I don’t want to wait only to “punished”.

I will check out your list. Again, thank you

Remember that when your taxable income is "pushed over the edge" - say from a 22% bracket to a 24% bracket, only that part that is over the "edge" ($80,250 for a married couple in 2020) is taxed at the higher rate.

 

[meleana]

We use a fee only planner affiliated with the Garrett Network. He does not manage our money. He only advises us holistically. He charges either by the hour or a flat annual fee, which is what we chose. We speak with him regularly and also communicate by email.


If you can;t find one than if I were you I would try to find a CPA that also has the CFP designation or similar.