Planning for the final months of work

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Planning for the final months of work

Post by nick2302 » Sun Nov 19, 2017 9:45 am

I am on the way to retirement after working 45 years non-stop. I have about 700K in a managed Fund at Edward Jones ( that is in a 60-40 bunch of funds (about 20) and 3 SPYDR funds, that costs me about 500.00+ a month in fees.) It is up about 11% so far this year with the fees already accounted for. I also have about 135K in stocks at Fidelity in a brokerage account and some DRIP accounts. Until I retire I am putting about 900.00 a month in 401K and about 1000.00 in cash savings and 500.00 extra on the house mortgage.

I have a home almost paid for but when I retire, hopefully this coming June, I will owe about 45K on it. Baring any unforeseen financial disasters. If I want to pay the house off so I can live on Social Security and a retirement pension and not have to pull regularly from my managed account should I have a one time 2018 pull from the managed account or use my "cash" to pay off the house? Or should I pull every month from the EJ managed account each month to make the mortgage payment?

When I say cash I mean the money in my brokerage account that is not part of retirement it is just savings from over the years. I will also (projected) have about 20K in a cash savings account which pays nothing but is the 6 months living costs account. That account is about half what it should be and I am trying to build cash as well as pay off the house. That is where all the spare cash goes every month.

The market will have a great deal to do with how much money the roll over IRA managed account is worth and my brokerage account and employer 401K. The future is always an unknown and all these numbers could crash and burn or keep going up no one knows for sure. I am in a quandary as to how to pay off the house. There is no way I can maintain the mortgage and not pull from the managed account once the pay checks stop and that is why I am so hot to pay off the house. Just take one big bite from the managed account and then live on the retirement checks or take money each month from the managed account to make the monthly mortgage payment. One way or the other it has to come from one of the puddles of money not from the monthly checks.

Thoughts, suggestions, ideas would be greatly appreciated.

Thanks in advance.
Nick

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Planning for the final months of work

Post by dbr » Sun Nov 19, 2017 11:22 am

Neither $45K out of your assets nor the mortgage payment out of your income and possible withdrawals are large enough to worry about. I would suggest you relax and not let this concern you.

One possible consideration is that selling assets to pay the mortgage might incur capital gains tax cost and therefore would be a bad idea.

From a psychological point of view it might help to ask yourself why you saved all that money if you aren't going to spend some of it in retirement.

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Sun Nov 19, 2017 6:19 pm

My grandparents on both sides were fresh off the boat. My parents were born in this country to immigrants and then survived the depression and 2 World Wars. We were brought up to be terrified of the future and always expect the absolute worse possible scenario to happen. That tape, no matter how hard I try has always been playing in my head.

For some years when I was young and the kids were young, I would go on shopping binges and to this day I have to reign myself in because "you never know". So I worry about my future, my children and grand children's future. I added to the family gold stash over the years not a lot but always have gold in case of absolute break down of the economy. Pay all your bills and don't buy something unless you can pay cash for it. The exception being the house and my first couple of cars when I was first starting out.

So because of that (I guess) fear I worry I won't have enough or I won't leave the kids enough so they can make it. I made sure they have no college debt and I helped them put a nice down payment on their homes. It is the Dad's responsibility to cover and provide. My ex on the other hand after 33 years of marriage decided she needed her freedom and got the house I was 2 payments away from paying off. So I had to buy the house I am in now with the mortgage I am so concerned about.

So now that I have outlined my psychological make up and what drives me to work until I am 68.5 and be a big worry wart, are you still of the same opinion I should just pay the house off with the rollover IRA? Just relax and not worry the market might drop 5000 points like it did the early 2000's? That somehow I will have enough to survive whatever Washington politicians throw at the middle class working stiffs? To me that is asking a lot and a whole change in mind set. Believe me I have tried many times to change my attitude. It is something I struggle with a lot.

Lonestarz
Posts: 97
Joined: Sat Oct 14, 2017 8:40 pm

Re: Planning for the final months of work

Post by Lonestarz » Sun Nov 19, 2017 7:41 pm

I would stop contributing to savings and pay it down from income now or just adjust your asset allocation to more bonds and pay it off over time.

The difference is do you believe your asset allocation will produce more gains than your mortgage interest rate in the next several years? In any case, that small amount will not impact you either way.

Would suggest after you pay it off (and set aside some money for assisted care) to start taking distributions. Something low like 2% is almost certain to keep growing in value while allowing you to enjoy more things or pass on wealth to children while you’re there to watch them enjoy it.

whomever
Posts: 784
Joined: Sat Apr 21, 2012 5:21 pm

Re: Planning for the final months of work

Post by whomever » Sun Nov 19, 2017 7:58 pm

( that is in a 60-40 bunch of funds (about 20) and 3 SPYDR funds, that costs me about 500.00+ a month in fees.)
$500 a month is $6000 a year. If you had 700K in Vanguard's Wellington fund, which is approximately a 60:40 fund, you'd be paying $1120 a year for the same 11% gain. I can think of better ways to spend $4880 a year than giving it to a salesman.

I don't know whether your existing account is tax advantaged; if not you'd have to work out the tax costs of switching. At the least, when RMD's start I wouldn't reinvest them at ER Jones.

delamer
Posts: 6410
Joined: Tue Feb 08, 2011 6:13 pm

Re: Planning for the final months of work

Post by delamer » Sun Nov 19, 2017 8:37 pm

How many more months of mortgage payments do you have? How big is the payment -- excluding taxes and insurance? Have you considered putting the $1,000/month now going toward cash toward your mortage instead? You could knock another $6,000 or $7,000 off the mortgage balance before you retire by doing that.

It doesn't much matter if you take a lump sum to pay off the mortgage or make monthly withdrawals. If it will make you sleep better, than go with the lump sum. How would you feel if you assets fell by $45,000 in value tomorrow? Would you be kicking yourself that you could have paid off the mortgage with the money you lost?

What will be your other expenses in retirement and what will your pension and SS income be? If you can live off your pension/SS if the mortgage is paid off, then you are in good shape for the years to come.

Worrying about the market, Washington, or any other unknowns that might affect your finances isn't going to change your situation. No one on this forum is going to be able to help you overcome your background, upbringing, or life experiences either.

But we can recommend actions that will let you sleep better -- like paying off your mortgage so you won't have to worry about having a roof over your head. Another thing to do would be to educate yourself about index investing and get out from Edward Jones. Think of putting that $500/month toward your mortgage rather than in EJ's pocket.
Last edited by delamer on Sun Nov 19, 2017 8:42 pm, edited 1 time in total.

sambb
Posts: 2196
Joined: Sun Mar 10, 2013 3:31 pm

Re: Planning for the final months of work

Post by sambb » Sun Nov 19, 2017 8:41 pm

i would get rid of edward jones

User avatar
badbreath
Posts: 918
Joined: Mon Jul 18, 2016 7:50 pm

Re: Planning for the final months of work

Post by badbreath » Sun Nov 19, 2017 8:53 pm

But we can recommend actions that will let you sleep better -- like paying off your mortgage so you won't have to worry about having a roof over your head. Another thing to do would be to educate yourself about index investing and get out from Edward Jones. Think of putting that $500/month toward your mortgage rather than in EJ's pocket.
Do this as fast as you can
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Mon Nov 20, 2017 7:33 am

I really appreciate the suggestions I have received. I must admit I am very surprised at them for the most part.

I am hearing don't save and try to get 6 months of living expenses in savings instead pay more on the house than I already am. That was a surprise as other financial planners like Suzie Orman beat the drum to save 6 to 8 months of living expenses in cash. I have about 3 months in cash savings. I thought that was one of my biggest shortfalls.

I have about 19 more months of payments on the house if I continue to add extra to the standard amount. The mortgage payment is 1400.00 a month and set to go up as Travis County Texas jacked the value up by a lot even when I protested. I estimate the taxes will increase about 100.00 per month when they recalculate the monthly payment in March. Plus Wells Fargo will want another 1,000.00 I would estimate as a short fall. The mortgage payment itself is about 500.00 a month with the rest going to taxes(700.00) and insurance(250). So even in retirement I will need at least 1,000.00 a month to meet the taxes and insurance costs.

My income from SS and Pension will be about 5200.00 a month before Taxes( I am planning on 25%) and Medical plans (300.00 per month). To make ends meet on that income I will have to cut back on some costs while other costs will go away. But from what I can tell from my projected budget I can squeak by each month. I have no debt other than the house. Every month I pay all my credit cards in full as I hate to pay interest that is not tax deductible.

I have often considered Edward Jones as being expensive except there at EJ I have a real financial advisor. EJ does not sell their own funds like Vanguard and Fidelity do. I was very badly burned by Fidelity as I had them holding my rollover IRA when I was younger and changing jobs every 5 to 6 years and keeping the employer 401K money by rolling into Fidelity rollover. When I started I was in a 5 star Morningside rated Fidelity fund. When everything went south I never heard a word from them and rode the fund down into the dirt because I was too busy with children and work and I trusted them. They lost over 50% of the value and never once reached out to me to re-balance or switch funds.

Once I realized what they had done I pulled everything from Fidelity except the brokerage account that was my own cash investments and not retirement and not in funds and went to Edward Jones. There I met a man who is now a CFP, he meets with me on a regular basis and is always available to explain something to me. I read a lot about investing and he will explain definitions and will reach out to me if he suggests a switch in one of the funds. I feel like I have a partner where as with other financial institutions I am more "YOYO" (you are on your own). Since that bad experience at Fidelity I am not overly fond of moving to company that markets its own funds as they have a self interest in not suggesting clients leave a poorly performing fund as it then becomes an even worse fund. That is exactly what happened to me at Fidelity. So once burned twice shy.

So other than considering moving from EJ what I should start doing is stop savings to build the cash reserves and put more money on the mortgage for the first 6 months of 2018. I can do that and if the tax "reform" bill removes home interest deduction I would move heaven and earth to pay the house mortgage off immediately if not sooner.

Thanks, Nick

fundseeker
Posts: 709
Joined: Mon Dec 24, 2007 9:02 am

Re: Planning for the final months of work

Post by fundseeker » Mon Nov 20, 2017 8:15 am

nick2302 wrote:
Mon Nov 20, 2017 7:33 am
I have often considered Edward Jones as being expensive except there at EJ I have a real financial advisor.
- But you could post your questions here and get very solid and free advice!
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
EJ does not sell their own funds like Vanguard and Fidelity do.
But, that is where they make their money, by selling you high cost funds and collecting front loaded fees!
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
I was very badly burned by Fidelity as I had them holding my rollover IRA when I was younger and changing jobs every 5 to 6 years and keeping the employer 401K money by rolling into Fidelity rollover. When I started I was in a 5 star Morningside rated Fidelity fund.
Mmmm, maybe if that had been an index fund instead of a mananged fund, it would have just done the same as the entire market, and maybe have made a comeback. Besides, it is not a good idea to pull out or sell when the fund goes down. So if your advisor suggests doing that, you should run!
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
When everything went south I never heard a word from them and rode the fund down into the dirt because I was too busy with children and work and I trusted them.
But, that is hindsight, and your advisor does not know anymore than you do about where a fund is headed. You should set an asset allocation you are comfortable with and leave it alone, even when it goes south!
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
They lost over 50% of the value and never once reached out to me to re-balance or switch funds.
Is they Fidelity? Fidelity did not lose your money. They did not know it was going south, and if they called and told you to get out, and then the fund came back, would you blame them for calling you?
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
Once I realized what they had done I pulled everything from Fidelity except the brokerage account that was my own cash investments and not retirement and not in funds and went to Edward Jones.
Fidelity did not lose your money.
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
There I met a man who is now a CFP, he meets with me on a regular basis and is always available to explain something to me. I read a lot about investing and he will explain definitions and will reach out to me if he suggests a switch in one of the funds.
It is the calls from him that will cost you money, because chances are, he is getting a cut every time you say yes to making a change in your funds. Set your allocation using index funds and you won't need to keep selling and buying.
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
I feel like I have a partner where as with other financial institutions I am more "YOYO" (you are on your own). Since that bad experience at Fidelity I am not overly fond of moving to company that markets its own funds as they have a self interest in not suggesting clients leave a poorly performing fund as it then becomes an even worse fund.
You might be better off on your own, because you don't want him calling you when your funds have gone down. That is a bad time to sell. And, if he calls to say you are in a failing fund, you might ask, Why did you put me in a fund that was going to go down like that?
nick2302 wrote:
Mon Nov 20, 2017 7:33 am
That is exactly what happened to me at Fidelity. So once burned twice shy.
Is it possible that if you had been with EJ then, you would have still had those loses, PLUS the loss of fees you paid EJ?

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Mon Nov 20, 2017 9:07 am

Considering the fact that it was Fidelity Funds and the Fund went from 5 star to 1. I don't think I would have lost as much. I also think if Fidelity didn't have such a self interest in its own funds my supposed Financial Advisor would have reached out to me with suggestions and/or warnings that things were not well. I never heard one single word from them EVER and I was a customer of their funds for over 15 years. I believe they let me down big time.

Nick

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Mon Nov 20, 2017 9:20 am

One other factoid I failed to mention about Fidelity is they no longer sell that fund it went the way of the DODO bird. While I am at it not to be defensive but at EJ anything else I do is fee free. I can buy and sell stocks, I can move money around and there is no fee. The percentage of the fee charge goes down as my balance goes up. Yes the total cost goes up but not by a lot and they have an interest in keeping my money growing as they get less if it goes down and more if it goes up.

Some of the funds I am in through the managed plan at EJ as an individual I could not participate in as an individual would have to have a huge amount of money to even get into the fund. But because EJ is bundling many clients money they can access these otherwise unavailable to the average investor funds. As I said earlier I have the belief I have a real partner who is looking out for my best interests and as he is a CFP, that is an added bonus. He is also not being pressured by EJ to market their own funds.

Certainly when it comes time to take an RMD I would have to consider where to put that cash. Again at EJ if I put that cash in a stock or a fund there is no load, no additional costs because I have the IRA in the managed account it covers anything else I might want to do at EJ.

The Wizard
Posts: 12449
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Planning for the final months of work

Post by The Wizard » Mon Nov 20, 2017 10:09 am

nick2302 wrote:
Mon Nov 20, 2017 9:20 am
One other factoid I failed to mention about Fidelity is they no longer sell that fund it went the way of the DODO bird...
Go ahead and tell us the name of that Fidelity fund.

And when did this loss occur? During 2008 perhaps?
Attempted new signature...

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Mon Nov 20, 2017 10:15 am

I don't remember the name of the fund and yes it was during that time.

delamer
Posts: 6410
Joined: Tue Feb 08, 2011 6:13 pm

Re: Planning for the final months of work

Post by delamer » Mon Nov 20, 2017 11:35 am

nick2302 wrote:
Mon Nov 20, 2017 7:33 am
I really appreciate the suggestions I have received. I must admit I am very surprised at them for the most part.

I am hearing don't save and try to get 6 months of living expenses in savings instead pay more on the house than I already am. That was a surprise as other financial planners like Suzie Orman beat the drum to save 6 to 8 months of living expenses in cash. I have about 3 months in cash savings. I thought that was one of my biggest shortfalls.

I have about 19 more months of payments on the house if I continue to add extra to the standard amount. The mortgage payment is 1400.00 a month and set to go up as Travis County Texas jacked the value up by a lot even when I protested. I estimate the taxes will increase about 100.00 per month when they recalculate the monthly payment in March. Plus Wells Fargo will want another 1,000.00 I would estimate as a short fall. The mortgage payment itself is about 500.00 a month with the rest going to taxes(700.00) and insurance(250). So even in retirement I will need at least 1,000.00 a month to meet the taxes and insurance costs.

My income from SS and Pension will be about 5200.00 a month before Taxes( I am planning on 25%) and Medical plans (300.00 per month). To make ends meet on that income I will have to cut back on some costs while other costs will go away. But from what I can tell from my projected budget I can squeak by each month. I have no debt other than the house. Every month I pay all my credit cards in full as I hate to pay interest that is not tax deductible.

I have often considered Edward Jones as being expensive except there at EJ I have a real financial advisor. EJ does not sell their own funds like Vanguard and Fidelity do. I was very badly burned by Fidelity as I had them holding my rollover IRA when I was younger and changing jobs every 5 to 6 years and keeping the employer 401K money by rolling into Fidelity rollover. When I started I was in a 5 star Morningside rated Fidelity fund. When everything went south I never heard a word from them and rode the fund down into the dirt because I was too busy with children and work and I trusted them. They lost over 50% of the value and never once reached out to me to re-balance or switch funds.

Once I realized what they had done I pulled everything from Fidelity except the brokerage account that was my own cash investments and not retirement and not in funds and went to Edward Jones. There I met a man who is now a CFP, he meets with me on a regular basis and is always available to explain something to me. I read a lot about investing and he will explain definitions and will reach out to me if he suggests a switch in one of the funds. I feel like I have a partner where as with other financial institutions I am more "YOYO" (you are on your own). Since that bad experience at Fidelity I am not overly fond of moving to company that markets its own funds as they have a self interest in not suggesting clients leave a poorly performing fund as it then becomes an even worse fund. That is exactly what happened to me at Fidelity. So once burned twice shy.

So other than considering moving from EJ what I should start doing is stop savings to build the cash reserves and put more money on the mortgage for the first 6 months of 2018. I can do that and if the tax "reform" bill removes home interest deduction I would move heaven and earth to pay the house mortgage off immediately if not sooner.

Thanks, Nick
Regarding the emergency fund -- the biggest reason to have one is to carry you financially if you lose your job or cannot work temporarily due to illness or disability. Once you retire, you don't have a job to lose. So while Suzy's advice makes sense for working people, it does not for retired people since their income is not dependent on working. Your emergency fund will be for a minor emergency like a new hot water heater or expensive dental work.

Your federal income taxes are going to be more like 10% of your income, not 25% (except at the margin) based on your pension and SS only. So let's say $55,000 after taxes.. Then you have $12,000 for your house, once the mortgage is paid off. So $43,000 for medical, utilities, food, transportation, vacations, charity, etc. Not a fortune, for sure, but it is over $3500/per month for a single man. And that is before taking any money out of your investment accounts.

Does any of the above help?

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Mon Nov 20, 2017 12:00 pm

Yes that does help. I have made a budget on what I am current spending on utilities, food, car insurance and the basics. If I need a 1000.00 a month just to pay the house insurance and property tax that leaves me about 2500.00 according to your plan. That would mean every penny would be accounted for and any unexpected or exceptional events like a birthday or a trip would have to come from some place else. What I am trying to do is see what I spend money on each month less the house payment that covers insurance and taxes right now, just to see what living expenses are. It comes really close to 2500.00 a month so not much wiggle room for sure.

barnaclebob
Posts: 3072
Joined: Thu Aug 09, 2012 10:54 am

Re: Planning for the final months of work

Post by barnaclebob » Mon Nov 20, 2017 12:38 pm

nick2302 wrote:
Mon Nov 20, 2017 7:33 am
I have often considered Edward Jones as being expensive except there at EJ I have a real financial advisor. EJ does not sell their own funds like Vanguard and Fidelity do.
What you have is a real good salesman. He might even believe hes helping you too. EJ doesn't sell their own funds but they get huge kickbacks and bonuses for selling American funds among others. This is a direct conflict of interest.

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Mon Nov 20, 2017 1:32 pm

And Vanguard doesn't do this? They don't make any money by selling their funds? All of these funds get money out of investors one way or another. The salesmen at Vanguard are just as focused on selling their funds.

User avatar
Earl Lemongrab
Posts: 5840
Joined: Tue Jun 10, 2014 1:14 am

Re: Planning for the final months of work

Post by Earl Lemongrab » Mon Nov 20, 2017 2:05 pm

nick2302 wrote:
Mon Nov 20, 2017 1:32 pm
And Vanguard doesn't do this? They don't make any money by selling their funds? All of these funds get money out of investors one way or another. The salesmen at Vanguard are just as focused on selling their funds.
I don't use Vanguard as a custodian, but I do use their products. The ETFs are very low in cost. You don't really seem to realize the difference in what we're talking.

I have two nieces that work at Jones, but I would still say to get away from them.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

barnaclebob
Posts: 3072
Joined: Thu Aug 09, 2012 10:54 am

Re: Planning for the final months of work

Post by barnaclebob » Mon Nov 20, 2017 2:12 pm

nick2302 wrote:
Mon Nov 20, 2017 1:32 pm
And Vanguard doesn't do this? They don't make any money by selling their funds? All of these funds get money out of investors one way or another. The salesmen at Vanguard are just as focused on selling their funds.
You are sorely mistaken. Any profits Vanguard makes goes back into reducing the cost to own the funds. Even if Vanguard were a profit driven conventional company I wouldn't care as long as they kept up their industry or near industry leading low costs. Saying that just because all companies funds have expense ratios and are therefore the same is like equating murder to petty theft because they are both crimes.

Also its possible to invest at Vanguard with only paying the ~.1% expense ratios and with never talking to a salesman. Try doing that at EJ. At best they will stick you in some American Funds at .6%. I'm not sure if you can even avoid a managed account with a 1% AUM fee at EJ anymore.

User avatar
David Jay
Posts: 5791
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Planning for the final months of work

Post by David Jay » Mon Nov 20, 2017 2:17 pm

Lonestarz wrote:
Sun Nov 19, 2017 7:41 pm
I would stop contributing to savings and pay [mortgage] down from income now.
^^^ This

It will really feel good to go into retirement without a mortgage payment.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

User avatar
David Jay
Posts: 5791
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Planning for the final months of work

Post by David Jay » Mon Nov 20, 2017 2:21 pm

nick2302 wrote:
Mon Nov 20, 2017 1:32 pm
And Vanguard doesn't do this? They don't make any money by selling their funds? All of these funds get money out of investors one way or another. The salesmen at Vanguard are just as focused on selling their funds.
The Vanguard company is owned by the funds. So any profits go into the funds (which in turn are held by us investors). There is no other investment company with this structure.
Last edited by David Jay on Mon Nov 20, 2017 2:31 pm, edited 1 time in total.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

PDX_Traveler
Posts: 29
Joined: Mon Nov 14, 2016 2:18 am

Re: Planning for the final months of work

Post by PDX_Traveler » Mon Nov 20, 2017 2:22 pm

nick2302 wrote:
Mon Nov 20, 2017 1:32 pm
And Vanguard doesn't do this? They don't make any money by selling their funds? All of these funds get money out of investors one way or another. The salesmen at Vanguard are just as focused on selling their funds.
The question is "how much", though. And, with Vanguard, you don't necessarily have 'salespeople' either. You can call and get help, or you can get your help elsewhere and just DIY. Look, there's no question different solutions may be the right thing for different folks, but you should just be aware of how to compare them.

John Doe 123
Posts: 69
Joined: Tue Dec 23, 2014 2:48 am

Re: Planning for the final months of work

Post by John Doe 123 » Mon Nov 20, 2017 2:30 pm

You must be very tired after 45 years of non-stop work. I suggest you take a nap for 1 to 2 years and re-evaluate when you wake up.

I agree with others; take control of your investments. Congrats on retirement!

bloom2708
Posts: 5011
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Planning for the final months of work

Post by bloom2708 » Mon Nov 20, 2017 2:50 pm

The best advice would be to thoroughly read threads here on a wide variety of topics for 6 months.

Search for "Edward Jones" and read the many threads about people making the switch.

You are in an early stage of "discovery" and "denial". Once you realize the long term impact of the fees and charges, you will move to "disgust" and then to "action". I went through all these phases. Many have.

It takes a while to absorb everything.

http://www.dinkytown.net/java/CompareFees.html

Use this calculator with your numbers and 3 different fee levels. .1%, 1% and 1.5%. You still have 10-20+ years of investing ahead. See what a difference those fees make.

Welcome and good luck. You found the best place to read, research and ask questions. The light bulb won't pop on overnight. Take your time and digest all the information. Start with the videos on the Wiki and browsing threads of interest.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

Dandy
Posts: 5473
Joined: Sun Apr 25, 2010 7:42 pm

Re: Planning for the final months of work

Post by Dandy » Mon Nov 20, 2017 3:10 pm

I'm not quite the worry wort that you say you are. But, I probably have more than enough and not at much risk. But, there are always potential financial worries to keep you from investing more aggressively or spending a bit more. It also can be hard to work hard for decades to build a very large nest egg only to start drawing it down. Been there done that.

Us worriers like security and have lived below our means and spending on things that aren't necessary seems wasteful. But life is really short and who knows how long we will live or live healthy. Time to reward yourself a bit and maybe your children too.

What helped me was Dr. Bernstein's idea of keeping X number of years of draw down in "safe" products. For me that is FDIC products and short term bond funds. I have enough to last until age 90 -- about 20 years. I can't tell you have liberating that was. Not everyone can or would go that far but having a decent number of years that will give you some comfort could also be considered. The rest of my investments are at 66/34 which is pretty aggressive for me -- but much of my "risk" has been taken off the table so I hope I can still feel that way when the market take a big dive.

It also made me focus on gifting to my children now -- I call it early inheritance. I want to help them while my wife and I are alive and when they have a current need for it rather than wait 20 years or so (i hope) to collect a nice lump sum when they are in retirement. We also want to see them and our grandchildren enjoy life while we are still here.

Anyway - sometimes you need to shake some of the ideas that dive you during your accumulation years and try to spend a bit and enjoy life a bit more. You can't take it with you.

Jack FFR1846
Posts: 8099
Joined: Tue Dec 31, 2013 7:05 am

Re: Planning for the final months of work

Post by Jack FFR1846 » Mon Nov 20, 2017 3:13 pm

You might want to bring up your funds that EJ has you in and see what they did during the 08 downturn. Chances are high that they went down just like Fidelity did. Had you stuck with Fidelity, they would have recovered.

Your fees are outrageous. You're paying 7.5 times what I pay. Investment is NOT hard. You set it and forget it. Especially going into retirement, set a conservative, LOW COST portfolio and then leave it alone.
Bogle: Smart Beta is stupid

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Mon Nov 20, 2017 3:14 pm

I just looked at the Funds and there is only one of the 20 funds has American in the name. I have a call in to see what the annual percentage is for the managed account. When I find I will let you know.

barnaclebob
Posts: 3072
Joined: Thu Aug 09, 2012 10:54 am

Re: Planning for the final months of work

Post by barnaclebob » Mon Nov 20, 2017 3:22 pm

nick2302 wrote:
Mon Nov 20, 2017 3:14 pm
I just looked at the Funds and there is only one of the 20 funds has American in the name. I have a call in to see what the annual percentage is for the managed account. When I find I will let you know.
This is a good first step. The fact that you have 20 funds in the first place is because it is supposed to make investing look complicated. They wouldn't keep as many customers on a 3 fund portfolio that performs the same if not better. Also the salesman might get kickbacks per fund he sells. Or it could be that the mothership tells him to structure portfolios this way. Beware though, a call about fees sets off a red flag for EJ salesmen so they may try to dissuade you. If you copy and past the fund names and tickers here we can tell you more about them.

delamer
Posts: 6410
Joined: Tue Feb 08, 2011 6:13 pm

Re: Planning for the final months of work

Post by delamer » Mon Nov 20, 2017 3:52 pm

nick2302 wrote:
Mon Nov 20, 2017 12:00 pm
Yes that does help. I have made a budget on what I am current spending on utilities, food, car insurance and the basics. If I need a 1000.00 a month just to pay the house insurance and property tax that leaves me about 2500.00 according to your plan. That would mean every penny would be accounted for and any unexpected or exceptional events like a birthday or a trip would have to come from some place else. What I am trying to do is see what I spend money on each month less the house payment that covers insurance and taxes right now, just to see what living expenses are. It comes really close to 2500.00 a month so not much wiggle room for sure.
Take another look at my post. By my calculation, you would have $3500/month AFTER paying income taxes and your property tax and homeowner's insurance.

And it isn't my plan; I am just estimating your income based on the information that you provided (and assuming that you take money from your investments to pay off your mortgage before you retire.)

sco
Posts: 825
Joined: Thu Sep 24, 2015 2:28 pm

Re: Planning for the final months of work

Post by sco » Tue Nov 21, 2017 12:07 am

Your best bet is going to ditch Edward Jones. You don't have to go to Vanguard, there are others. But before doing anything you do need to do a fair amount of reading. Understand that you won't get straight answers out of EJ.

11% is fine for the year, but does that include all your costs? Are you sure? Who told you that?

It may seem like people are jumping on this point, but where else are you going to gain 6k a year, for the rest of your life? Actually the expenses will increase as your portfolio will. After you understand what is happening, you may decide to keep them. But I doubt it, they really are just salesmen of whatever the company wants to push at that time.

20 funds is about a minimum 15 too many. There is just no reason for it in one account.

Would you pay me 6k to bill you 5 hours worth of financial work a year? What about 3 hours? What if I just did whatever someone else told me? I will answer the phone if you call, or call you back. Chances are this will happen about once a quarter for 4-5 minutes. When it does happen, I will attempt to see if I can get you to roll over more of your assets to me..

Expect to pay fees to leave Edward Jones, they charge for everything even if you don't get a receipt. Some broker will reimburse for this.

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Tue Nov 21, 2017 7:06 am

As I said once I found out what the charges are from EJ I would share that info.

Below is the info you requested.

1.3% per year which is .1083% per month

So yes the account grew by 11% an that is taking the monthly charge into account. So the account earned the fee plus 11.2% to be exact.

So it doesn't appear to be to be that outrageous charges in fees. It is NOT the 1.6% that some earlier posted and all these other charges that do not exist. I am starting to think that this mythology about EJ is one that has developed over time and been propagated by others who have not done any investigation into the facts.

Now to be fair I am going to make an appointment to discuss Vanguard and what they offer and what services they provide and what I can do fee free and compare that with EJ.

Delamer you are correct I did not read your post carefully enough. By your calculations the amount you said I could live on was after the insurance and property taxes were accounted for. That makes living on that budget much more doable. Now I will re-calculate and see what that looks like.

Thanks to everyone who have contributed to helping me learn and think this process through. I cannot explain how helpful everyone's thoughts and ideas have helped. This has been a very helpful thought provoking discussion.

sco
Posts: 825
Joined: Thu Sep 24, 2015 2:28 pm

Re: Planning for the final months of work

Post by sco » Tue Nov 21, 2017 9:09 am

1.3% would be the AUM fee. Vanguard is charging .3% I believe for PAS service. This is just the charge to manage assets, this is not the total cost. AUM=Assets Under Management

So then how much are you charged on the funds themselves, they will have an annual expense ratio? All funds and ETF's have an expense ratio.
They may or may not also have a front end or back end redemption fee.

Then there is transaction fees, dividend reinvestment fees,etc. I couldn't name them all.


And please see the chart at the bottom of this article, it clearly articulates the impact of 1% here or there. 1% Fees over 30 years will eat up 25.8% of your total portfolio, whether you make any money or not. Now that is better than 2% eating up 44.8% almost half of your entire portfolio.

Getting down to the .1 to .2 range is much more my style.

https://vanguardblog.com/2011/10/28/sto ... f-returns/


Also, you may want to look through the following. It can be eye opening.
http://kronstantinople.blogspot.com/p/e ... -saga.html

nick2302
Posts: 64
Joined: Sun Sep 25, 2016 11:29 am

Re: Planning for the final months of work

Post by nick2302 » Tue Nov 21, 2017 9:49 am

As I have said earlier to your question
"Then there is transaction fees, dividend reinvestment fees,etc. I couldn't name them all."

There are NO additional fees. I can even buy and sell stocks without a fee if I wanted to use my accounts at EJ as a brokerage account. The managed fee takes care of all fees. One charge period that is it.

Nick

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Planning for the final months of work

Post by dbr » Tue Nov 21, 2017 10:01 am

nick2302 wrote:
Tue Nov 21, 2017 9:49 am
As I have said earlier to your question
"Then there is transaction fees, dividend reinvestment fees,etc. I couldn't name them all."

There are NO additional fees. I can even buy and sell stocks without a fee if I wanted to use my accounts at EJ as a brokerage account. The managed fee takes care of all fees. One charge period that is it.

Nick
There are not supposed to be transaction costs or loads when there is an AUM. That does not mean fund ERs will be low or that cost imposed by turnover will be low. Turnover costs are not accounted in the ER.

The Wizard
Posts: 12449
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Planning for the final months of work

Post by The Wizard » Tue Nov 21, 2017 10:11 am

nick2302 wrote:
Tue Nov 21, 2017 9:49 am
As I have said earlier to your question
"Then there is transaction fees, dividend reinvestment fees,etc. I couldn't name them all."

There are NO additional fees. I can even buy and sell stocks without a fee if I wanted to use my accounts at EJ as a brokerage account. The managed fee takes care of all fees. One charge period that is it.

Nick
Are you saying that none of the funds you acquired through EJ had Front End Loads?
Attempted new signature...

sco
Posts: 825
Joined: Thu Sep 24, 2015 2:28 pm

Re: Planning for the final months of work

Post by sco » Tue Nov 21, 2017 10:12 am

Why don't you just post your list of funds/tickers with the ERs?
We don't need to know $$$ amounts or anything.

barnaclebob
Posts: 3072
Joined: Thu Aug 09, 2012 10:54 am

Re: Planning for the final months of work

Post by barnaclebob » Tue Nov 21, 2017 10:13 am

nick2302 wrote:
Tue Nov 21, 2017 9:49 am
There are NO additional fees. I can even buy and sell stocks without a fee if I wanted to use my accounts at EJ as a brokerage account. The managed fee takes care of all fees. One charge period that is it.

Nick
There are more fee's I promise you, its just that EJ isn't who is charging those fees. The fund managers that pay EJ kickbacks to sell their funds are charging the extra fees in the form of very high Expense Ratios. Knowledge is power.

.1% a month is a lot of money for very little if any benefit. The safe withdrawal rate is usually considered .33% a month (4% a year) so you are paying EJ 1/3 of your safe withdrawal rate. You still need to figure out the Expense Ratios of your 20 funds. And with 20 funds I guarantee they wont be low cost index funds for the most part. In fact I don't think we've ever seen anyone post a list of low cost funds from EJ here.

Don't be surprised if the service at vanguard is not as good as EJ. They will probably give you a portfolio of index funds without a huge explanation and that will be it. You don't really need much "service" to properly handle investments. But if you want pay someone $6k a year to make you feel rich and safe then EJ is your place.
Last edited by barnaclebob on Tue Nov 21, 2017 11:21 am, edited 4 times in total.

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Planning for the final months of work

Post by dbr » Tue Nov 21, 2017 10:15 am

barnaclebob wrote:
Tue Nov 21, 2017 10:13 am
Knowledge is power. .1% a month is a lot of money for very little if any benefit. The safe withdrawal rate is usually considered .33% a month (4% a year) so you are paying EJ 1/3 of your safe withdrawal rate. You still need to figure out the Expense Ratios of your 20 funds. And with 20 funds I guarantee they wont be low cost index funds for the most part. In fact I don't think we've ever seen anyone post a list of low cost funds from EJ here.

Don't be surprised if the service at vanguard is not as good as EJ. They will probably give you a portfolio of index funds without a huge explanation and that will be it. You don't really need much "service" to properly handle investments. But if you want pay someone $6k a year to make you feel rich and safe then EJ is your place.
Yes, people are always welcome to make gifts to the corporation of their choice. I may be wrong but I think financial advisory fees are tax deductible as well. Someone can supply correct detail on that.

barnaclebob
Posts: 3072
Joined: Thu Aug 09, 2012 10:54 am

Re: Planning for the final months of work

Post by barnaclebob » Tue Nov 21, 2017 10:18 am

dbr wrote:
Tue Nov 21, 2017 10:15 am
I may be wrong but I think financial advisory fees are tax deductible as well. Someone can supply correct detail on that.
Certain investment expenses are a miscellaneous deduction so only the amount over 2% of your total AGI is deductible. However if those fees reduce your AGI (as ER's and AUM fees do) then they are not deductible according to this article: https://www.investopedia.com/ask/answer ... ctible.asp

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Planning for the final months of work

Post by dbr » Tue Nov 21, 2017 10:25 am

barnaclebob wrote:
Tue Nov 21, 2017 10:18 am
dbr wrote:
Tue Nov 21, 2017 10:15 am
I may be wrong but I think financial advisory fees are tax deductible as well. Someone can supply correct detail on that.
Certain investment expenses are a miscellaneous deduction so only the amount over 2% of your total AGI is deductible. However if those fees reduce your AGI then they are not deductible according to this article: https://www.investopedia.com/ask/answer ... ctible.asp
Thanks. I just wanted to help people feel good about their charitable contribution to the Financial Services Industry.

UncleLongHair
Posts: 40
Joined: Fri Nov 17, 2017 5:51 pm

Re: Planning for the final months of work

Post by UncleLongHair » Tue Nov 21, 2017 10:48 am

I am late to this thread but just wanted to add one comment. The last 19 payments on your mortgage are almost all principal. I do not see any reason to pre-pay those. You can figure out how much interest it is, I'm guessing less than $100 per month. It is like a 19 month 0% loan at this point. I know the mortgage is "debt" and something to worry about but prepaying it just going to cut into the amount of cash you have for other purposes.

Lonestarz
Posts: 97
Joined: Sat Oct 14, 2017 8:40 pm

Re: Planning for the final months of work

Post by Lonestarz » Tue Nov 21, 2017 5:48 pm

What people are saying about Edward Jones sounds correct. You pay them 1.3% to pick stocks for you but the stocks they pick have expense ratios (I have typically seen 1.5% to 0.6%)

That means if the stock assets go up 10%, the stock fund takes 1% of that and you see a 9% gain. EJ then takes 1.3% of that for their advise and you end up with ~8%.

They got 2% for managing the fund and telling you to buy the fund. However they still get their % when your assets go down. Vanguard pushes index funds that can be managed by computers (cheaper than a stock picker) so they drop the ER from ~1% to 0.1%

I like simple selection of total market, S&P500, or total world type funds so I don’t need someone to advise me on should I put 30% or 40% of my money into the total market fund? I get advice here on acceptable bond/stock and how to split my stocks.

I still cover expense ratio but vanguards is much lower than other locations offer.

User avatar
grabiner
Advisory Board
Posts: 23117
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Planning for the final months of work

Post by grabiner » Tue Nov 21, 2017 6:55 pm

UncleLongHair wrote:
Tue Nov 21, 2017 10:48 am
I am late to this thread but just wanted to add one comment. The last 19 payments on your mortgage are almost all principal. I do not see any reason to pre-pay those. You can figure out how much interest it is, I'm guessing less than $100 per month. It is like a 19 month 0% loan at this point.
This is not correct. If you have a 4% 30-year mortgage, then it is a 4% 2-year loan two years before it ends. You would earn 4% on any pre-payment; if you pay $1000 one year before the mortgage would be paid off, your final month's payment will be reduced by $1040. So that is equivalent to buying a one-year CD yielding 4%.

It is true that the payments are almost all principal, but that is not relevant. Any additional payment you make is all principal regardless of how much of the required payment is principal, and any reduction in the principal has the same effect on future interest. And this makes paying off a short-term loan particularly attractive, as you get the benefit faster.
Wiki David Grabiner

sco
Posts: 825
Joined: Thu Sep 24, 2015 2:28 pm

Re: Planning for the final months of work

Post by sco » Tue Nov 21, 2017 7:24 pm

Keep in mind that if you need real investment advice you can also simply right a check and get it on an hourly basis anytime you would like, for far less what you are paying yearly. It would not be typical for someone to need this level of advice yearly, just maybe an hour or two consult if even that.

Or you can do an AUM arrangement with fidelity or vanguard for cheaper.

UncleLongHair
Posts: 40
Joined: Fri Nov 17, 2017 5:51 pm

Re: Planning for the final months of work

Post by UncleLongHair » Tue Nov 21, 2017 7:57 pm

This is not correct. If you have a 4% 30-year mortgage, then it is a 4% 2-year loan two years before it ends.
On a $250k loan at 4%, the amount of interest paid over the first 19 payments is $15,624 and the amount of interest paid over the last 19 payments is $811. Not sure why you say that is not relevant. By prepaying the mortgage 19 months early OP is saving $811 in interest. This is like borrowing $22,700 for 19 months at like 0.4%.

User avatar
ray.james
Posts: 1049
Joined: Tue Jul 19, 2011 4:08 am

Re: Planning for the final months of work

Post by ray.james » Tue Nov 21, 2017 8:14 pm

UncleLongHair wrote:
Tue Nov 21, 2017 7:57 pm
This is not correct. If you have a 4% 30-year mortgage, then it is a 4% 2-year loan two years before it ends.
On a $250k loan at 4%, the amount of interest paid over the first 19 payments is $15,624 and the amount of interest paid over the last 19 payments is $811. Not sure why you say that is not relevant. By prepaying the mortgage 19 months early OP is saving $811 in interest. This is like borrowing $22,700 for 19 months at like 0.4%.
( 811/ 22700 ) * (12/19 months) ~== 2.25 % yield?

edit: also Grabiner point is about effective interest/yield vs nominal amounts. It is true nominal amount is small but so is the principal remaining.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

User avatar
grabiner
Advisory Board
Posts: 23117
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Planning for the final months of work

Post by grabiner » Tue Nov 21, 2017 9:47 pm

ray.james wrote:
Tue Nov 21, 2017 8:14 pm
UncleLongHair wrote:
Tue Nov 21, 2017 7:57 pm
This is not correct. If you have a 4% 30-year mortgage, then it is a 4% 2-year loan two years before it ends.
On a $250k loan at 4%, the amount of interest paid over the first 19 payments is $15,624 and the amount of interest paid over the last 19 payments is $811. Not sure why you say that is not relevant. By prepaying the mortgage 19 months early OP is saving $811 in interest. This is like borrowing $22,700 for 19 months at like 0.4%.
( 811/ 22700 ) * (12/19 months) ~== 2.25 % yield?
You aren't borrowing the full $22,700 for the whole period; you are borrowing almost 1/19 of it for each period of 1-19 months. This causes the yield to go back to 4%

It's easiest to see this as a series of single payments. If you pay $1163 now, you eliminate the final payment of $1237 in 19 months; this is equivalent to buying a 19-month CD yielding 4% annually. If you pay another $1167, you eliminate the next-to-last payment of $1237 in 18 months; this is equivalent to buying an 18-month CD yielding 4%. And so on until your final $1233 payment eliminates a payment of $1237 in the following month; this is still a 4% annual return for the one month.
Wiki David Grabiner

fundseeker
Posts: 709
Joined: Mon Dec 24, 2007 9:02 am

Re: Planning for the final months of work

Post by fundseeker » Wed Nov 22, 2017 8:03 am

From EJ's website: https://www.edwardjones.com/images/reve ... losure.pdf

"Revenue Sharing Disclosure
Edward Jones receives payments known as revenue sharing from certain mutual fund companies, 529 plan program managers and insurance companies (collectively referred to as “product partners”). Virtually all of Edward Jones’ transactions relating to mutual funds (outside of advisory programs), 529 plans and annuity products involve product partners that pay revenue sharing to Edward Jones. We want you to understand that Edward Jones’ receipt of revenue sharing payments creates a potential conflict of interest in the form of an additional financial incentive and financial benefit to the firm, its financial advisors and equity owners in connection with the sale of products from these product partners. For the year ended December 31, 2016, Edward Jones received revenue sharing payments of approximately $186.7 million from mutual fund and 529 product partners and $7.7 million from annuity product partners. For that same period, Edward Jones’ net income was $746.2 million.

Revenue sharing, as received by Edward Jones, involves a payment from a mutual fund company’s adviser or distributor, a 529 plan program manager or an insurance company or the entity that markets an annuity contract. It is not an additional charge to you. These payments are in addition to standard sales loads, annual sales fees, expense reimbursements, sub-transfer agent fees for maintaining client account information and providing other administrative services for mutual funds (shareholder accounting and networking fees), fees for maintaining technology and providing other administrative services for insurance products (inforce contract service fees), and reimbursements for education, marketing support and training-related expenses.

Some product partners pay Edward Jones a fee based on the value of assets under management, known as an asset-based fee. For example, if you made a $10,000 purchase of an investment, held it for a year, and its value remained the same, Edward Jones would be paid .075% by the product partner, or 7.5 basis points. That would translate to a $7.50 payment from the product partner to Edward Jones for the $10,000 investment in your account. For every subsequent year you held that $10,000 investment in your Edward Jones account, the product partner would make a $7.50 payment to Edward Jones, assuming no change in the value of your investment. Asset-based payments will increase or decrease from year to year with changes in the value of the related assets held by Edward Jones’ clients.

Other product partners may pay Edward Jones a one-time fee based on the amount of the product sold. This approach is referred to as a sales-based fee and is based on the dollar value of your purchase. For example, the product partner may pay Edward Jones up to .25% or 25 basis points for each dollar you invest or use to purchase a product. Therefore, if you made a $10,000 investment, the product partner would pay Edward Jones $25 for that transaction.

Most, but not all, of the product partners that pay revenue sharing to Edward Jones have been designated as preferred product partners. This designation means that Edward Jones has determined these product partners have a broad spectrum of investment and annuity solutions designed to meet a variety of client needs. Edward Jones grants preferred product partners greater access to certain information about its business practices. In addition, these product partners have frequent interactions with our financial advisors to provide training, marketing support and educational presentations. Non-preferred product partners that pay revenue sharing may receive similar treatment. With regard to annuities, Edward Jones’ financial advisors have limited access to the products and services of other insurance carriers. Additionally, while Edward Jones financial advisors may sell, and our clients are free to select, funds from many mutual fund families, we predominantly promote mutual fund preferred product partners. The vast majority of mutual funds, 529 plans and annuity products sold by Edward Jones involve preferred product partners, and, as noted above, most of these product partners pay revenue sharing to Edward Jones. The names of preferred product partners are shown in bold and italics on the following revenue sharing summary tables.

For additional information on a particular product partner’s payment and compensation practices, please review the applicable prospectus, statement of additional information or offering statement.

Detailed information and disclosures concerning revenue sharing received from product partners are included in the following revenue sharing summary tables."

"MUTUAL FUND COMPANIES: REVENUE SHARING SUMMARY
Paid by/ Maximum Annual Asset Fees/ Maximum Sales Fees/ Total 2016 Revenue
(Based on $10,000 of fund assets owned)/ (Per $10,000 of fund assets purchased)

American Funds Distributors, Inc. / $2.60 / $__ / $59.5 million
For the purposes of computing the annualized amount per $10,000 of assets, Edward Jones has categorized the entire revenue sharing arrangement with American Funds Distributors, Inc. (“American Funds”) as an asset fee because American Funds has not distinguished to Edward Jones the breakdown of the revenue arrangement between asset fees and sales fees. If the entire revenue sharing arrangement was categorized as sales fees, the amount would be $30.00 per $10,000 purchased. American Funds has not distinguished the portion of its annual revenue sharing payment that is attributable to Edward Jones’ sales of interests in the 529 plan for which American Funds is the program manager.

BlackRock Investments, LLC/ $13.00/ $0/ $1.8 million
Edward Jones and BlackRock entered into a revenue sharing agreement effective August 1, 2016.

Federated Securities Corp.4/$10.00/$0/$0.5 million
In 2016, Federated Securities Corp. and Edward Jones jointly owned Passport Research, Ltd. (“Passport”), the investment adviser to the Edward Jones Money Market Fund and the Edward Jones Tax-Free Money Market Fund. The foregoing table does not include any amounts earned by or paid to Edward Jones with respect to its ownership in Passport. On January 27, 2017, the Jones Financial Companies, L.L.L.P. became the sole owner of Passport, which continues to be the investment adviser to the Edward Jones Money Market Fund, and Federated Investment Management Company, an affiliate of Federated Securities Corp., became the sub-adviser to the Edward Jones Money Market Fund. Please refer to the fund’s prospectus for further information. The Edward Jones Tax-Free Money Market fund is no longer offered.

Franklin Templeton Distributors, Inc./$6.00/$0/$31.1 million

Goldman Sachs Asset Management, L.P./$13.00/$0/$2.2 million

Hartford Investment Financial Services, LLC/$13.00/$0/$18.7 million

Invesco Distributors, Inc./$13.00/$0/$23.9 million

Ivy Funds Distributor, Inc./$13.00/$0/$1.2 million

John Hancock Funds, LLC/$13.00/$0/$7.8 million
In addition to asset-based fees, the amounts received include fees paid by John Hancock for its participation at conferences, seminars, programs, and/or other events sponsored by Edward Jones.

J.P. Morgan Investment Management Inc./$13.00/$0/$4.5 million

Lord Abbett & Co., LLC/$10.00/$0/$13.0 million

MFS Fund Distributors, Inc./$11.00/$0/$17.7 million

OppenheimerFunds Distributor, Inc./$13.00/$0/$4.4 million"

simas
Posts: 288
Joined: Wed Apr 04, 2007 5:50 pm

Re: Planning for the final months of work

Post by simas » Wed Nov 22, 2017 8:07 am

Hey, I am the first generation immigration (off the boat myself) so I know the 'what is the worst happens' feeling very well..

Having said that, stop being in denial of the financial rape you are getting from EJ - you are paying AUM fee AND mutual fund fees (no way around that) AND likely sale loads.

Second, please stop yapping about 11% this or that as like that is a "justification" for the financial abuse above, it is not. market has been up this year and there are tons of funds that did better than that, but so what? Just the stupidest buy and hold S&P500 index have been up 16+% this year, none of that is relevant and justifies paying them asset under management fees.


Wake up, face the music, and get rid of them as that is the best thing you can do for yourself financially.

Post Reply