Financial Strategies _during_ retirement

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thehappysnail
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Joined: Mon Feb 10, 2020 8:17 am

Financial Strategies _during_ retirement

Post by thehappysnail » Mon Feb 10, 2020 8:34 am

My parents plan to retire in the next few months.

Are there any resources you guys would recommend to understand how to think about their money during this transition? For example: should their asset allocation change? How should they think about withdrawing money? Most of the resources I see are for retirement planning, which I assume focuses on how much money you'll need and what's the best way to save. We're at the stage of "this is how much money we have. now what?"

I am considering hooking them up with a financial advisor, mainly so that they'll feel more comfortable taking risk, but I'd like to learn more about it myself so I can judge whether the financial advisor is giving good information. For example, my father wandered into a Wells Fargo and for some reason there was a financial advisor available to chat with him. He suggested putting money into "income" funds, e.g., that produce dividends instead of stock growth. I had never thought of investing in these, and am not sure what the advantages/disadvantages are compared to "normal" funds especially for people who are already in retirement. Frankly, one of the main advantages from my perspective is that my parents seemed to understand how income funds work and they would allow my parents to "safely" keep managing their own money.

RadAudit
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Location: Second star on the right and straight on 'til morning

Re: Financial Strategies _during_ retirement

Post by RadAudit » Mon Feb 10, 2020 9:58 am

If you need to ask portfolio questions, start here. viewtopic.php?t=6212

If you need info about other aspects of retirement, start here.https://www.bogleheads.org/wiki/Prepari ... retirement.

Just an opinion. Some on the forum prefer a total portfolio return approach to withdrawing money from a portfolio during retirement vs. income funds / dividend stocks. Others don't. YMMV. Whatever you do, consider asking the forum (see above) first. If you use a financial advisor, check their costs, fees, etc. I'd be wary of Wells Fargo just on general principles.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

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WoodSpinner
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Re: Financial Strategies _during_ retirement

Post by WoodSpinner » Mon Feb 10, 2020 10:46 am

OP,

Here are a couple of suggestions:

1. Have your parents join the BogleHeads and ask for direct advice. This should help them learn, understand, and trust in their decisions.

2. I found this book to be very helpful in my Retirement planning, Your Complete Guide to a Successful and Secure Retirement https://www.amazon.com/dp/0857197320/re ... qEbRSGM6DF

WoodSpinner

22twain
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Re: Financial Strategies _during_ retirement

Post by 22twain » Mon Feb 10, 2020 11:19 am

I've never read it myself, but I've seen many favorable references on this forum, to this book:

Jane Bryant Quinn: How to Make Your Money Last
My investing princiPLEs do not include absolutely preserving princiPAL.

RadAudit
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Location: Second star on the right and straight on 'til morning

Re: Financial Strategies _during_ retirement

Post by RadAudit » Thu Feb 13, 2020 9:42 am

22twain wrote:
Mon Feb 10, 2020 11:19 am
I've never read it myself, but I've seen many favorable references on this forum, to this book:

Jane Bryant Quinn: How to Make Your Money Last
+1

If she was following her own advice - it appears she did OK. An article reported recently that she retired to Italy (?) for a year and then she'd think about what else to do later.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

Dinosaur Dad
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Location: Connecticut

Re: Financial Strategies _during_ retirement

Post by Dinosaur Dad » Thu Feb 13, 2020 9:54 am

RadAudit wrote:
Thu Feb 13, 2020 9:42 am
22twain wrote:
Mon Feb 10, 2020 11:19 am
I've never read it myself, but I've seen many favorable references on this forum, to this book:

Jane Bryant Quinn: How to Make Your Money Last
+1

If she was following her own advice - it appears she did OK. An article reported recently that she retired to Italy (?) for a year and then she'd think about what else to do later.
+1 one of the best
"Take calculated risks - that is quite different from being rash." | General George S. Patton

KingRiggs
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Re: Financial Strategies _during_ retirement

Post by KingRiggs » Thu Feb 13, 2020 9:59 am

The other posters’ advice is sound.

But before all that, I’d ask if your parents requested your assistance in this transition. If they did, great! If your involvement is the product of your own concerns/desires, I’d say tread VERY lightly.
Advice = noun | Advise = verb | | Roth, not ROTH

dbr
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Re: Financial Strategies _during_ retirement

Post by dbr » Thu Feb 13, 2020 10:57 am

A person should not be doing anything "during this transition." A worst possible thing to do would be to fall into the predatory arms of the "advisor at our bank." In particular there is no special arrangement that needs to be made "in order to take income."

What people should be doing is start to learn about how to manage assets all through retirement. The way to do that is to read good books like the Boglehead retirement book or Larry Swedroe's book in retirement.

https://www.amazon.com/Bogleheads-Guide ... 175&sr=8-1

https://www.amazon.com/Complete-Guide-S ... 384&sr=8-1

They should also post and read here. A helpful place to start reading is https://www.bogleheads.org/wiki/Getting_started

There is also this: viewtopic.php?f=1&t=6211

and this: viewtopic.php?f=1&t=6212

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Shackleton
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Re: Financial Strategies _during_ retirement

Post by Shackleton » Thu Feb 13, 2020 10:58 am

I worry about your idea of getting them a financial advisor so they are more comfortable taking risk. Their comfort with risk is what it is. A financial advisor should not be trying to get them to take on more risk than they are comfortable with. In fact, if a FA did that, I’d say runaway from that FA.

I suggest you have them start reading here or the books suggested above and determine a path based on their own goals and risk comfort zone.
“Superhuman effort isn't worth a damn unless it achieves results.” ~Ernest Shackleton

Wenonah
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Re: Financial Strategies _during_ retirement

Post by Wenonah » Thu Feb 13, 2020 11:49 am

What about Personal Advisor Services from Vanguard if they need some direction and/or confidence.
https://investor.vanguard.com/advice/personal-advisor

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Wiggums
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Re: Financial Strategies _during_ retirement

Post by Wiggums » Thu Feb 13, 2020 12:02 pm

RadAudit wrote:
Mon Feb 10, 2020 9:58 am
If you need to ask portfolio questions, start here. viewtopic.php?t=6212

If you need info about other aspects of retirement, start here.https://www.bogleheads.org/wiki/Prepari ... retirement.

Just an opinion. Some on the forum prefer a total portfolio return approach to withdrawing money from a portfolio during retirement vs. income funds / dividend stocks. Others don't. YMMV. Whatever you do, consider asking the forum (see above) first. If you use a financial advisor, check their costs, fees, etc. I'd be wary of Wells Fargo just on general principles.
+1

We need a lot more information. Also, I would not rush to change everything based on input from one person, after saving 30-40 years.

Monster99
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Re: Financial Strategies _during_ retirement

Post by Monster99 » Thu Feb 13, 2020 1:04 pm

I retired in 2017 - I tracked my expenses from ~3 years before retirement to get a good idea of average expenses. I compared expenses to income in retirement (pension, SS, annuities, ect) if it is short, I pull from accounts. I have 12 months of money in Vanguard prime as a cushion with a AA of 40/57/3 (S/B/C)

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