What do you tell people who ask for retirement/investment advice?

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CurlyDave
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What do you tell people who ask for retirement/investment advice?

Post by CurlyDave » Wed Mar 06, 2019 1:48 am

DW and I are retired and it is obvious to people who know us that we are doing reasonably well.

I have had a number of people ask me for advice on retirement. Just tonight I had a guy in his early 60s ask me. The problem is that he has very little savings, and we saved about 20% of our income for over 30 years.

The only thing I could tell him was to delay SS as long as possible, even if he has to work longer. And I pointed out that if he experiences a shortfall later in life it will be much more difficult to get a job than if he keeps working now.

Somehow I just wasn't able to tell him that the time for serious saving was 3 or more decades ago, and that there just aren't any ways now to match the accumulated wealth we have in the time he has.

Younger people I always tell about the value of saving and investing, but what do you people say to a person on the verge of retirement with no savings?

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FiveK
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Re: What do you tell people who ask for retirement/investment advice?

Post by FiveK » Wed Mar 06, 2019 2:11 am

"Better late than never."

Perhaps trite but if someone does have a few years to go then what better than saving as much as possible into traditional accounts? If they save only 12% (or even 10%), having very little in savings implies they will likely pay 0% when withdrawing (provided they don't withdraw all at once).

frugalecon
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Re: What do you tell people who ask for retirement/investment advice?

Post by frugalecon » Wed Mar 06, 2019 5:24 am

I have a friend in the situation you described. He has basically mismanaged his personal finances for > 30 years, and he has pretty much ignored any advice. He lost his job more than 5 years ago, and he is now ekeing out a meager existence, relying on Social Security, public assistance programs, and handouts from friends. The best advice to give someone is to work as long as possible and save what they can. People with this history will not suddenly make sensible investment decisions, but if they can defer taxes and defer claiming Social Security, they will be in better shape. If they have a break in employment, it may be very difficult to find another job. My friend has certainly discovered that.

snowox
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Re: What do you tell people who ask for retirement/investment advice?

Post by snowox » Wed Mar 06, 2019 6:02 am

I think it depends on the question and how in depth they go. Normally I get away with just put as much as you can into index funds and forget about it after doing some reading. I might suggest a couple blogs to help them but thats about as far as I go

averagedude
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Re: What do you tell people who ask for retirement/investment advice?

Post by averagedude » Wed Mar 06, 2019 6:03 am

Sounds to me that you gave this guy fantastic advice. All financial planners would had given this gentlemen the same advice.

Bacchus01
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Re: What do you tell people who ask for retirement/investment advice?

Post by Bacchus01 » Wed Mar 06, 2019 6:42 am

I generally don’t make a habit of hanging around people who are irresponsible.

If they do ask for advice, I send them here and tell them to read the wiki in entirety and then get back to me.

goblue100
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Re: What do you tell people who ask for retirement/investment advice?

Post by goblue100 » Wed Mar 06, 2019 7:02 am

He can't change the past, so I don't believe pointing out that he missed the boat for the last 30 years is productive. I agree you gave him the best advice for him going forward.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

columbia
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Re: What do you tell people who ask for retirement/investment advice?

Post by columbia » Wed Mar 06, 2019 7:15 am

This person seems like a classic case for pursuing a SPIA upon retirement, in that one would provide an annual income that will be impossible to squeeze from his “final” savings.

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whodidntante
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Re: What do you tell people who ask for retirement/investment advice?

Post by whodidntante » Wed Mar 06, 2019 7:24 am

For those starting in their 60s, you could suggest that they try all the flavors of alpo while they are still employed and can afford to donate the flavors they didn't like. Or save. A lot. And work longer.

Rus In Urbe
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Re: What do you tell people who ask for retirement/investment advice?

Post by Rus In Urbe » Wed Mar 06, 2019 7:58 am

Yes, it's comforting to realize, late in life, the payoff for being the ANT rather than the GRASSHOPPER.
And at the same time, it's very painful to see friends who will pay the price for not planning ahead.
Since your friend can't turn back the clock, as noted upthread, the options are limited now.
frugalecon
I have a friend in the situation you described. He has basically mismanaged his personal finances for > 30 years, and he has pretty much ignored any advice. He lost his job more than 5 years ago, and he is now ekeing out a meager existence, relying on Social Security, public assistance programs, and handouts from friends.The best advice to give someone is to work as long as possible and save what they can. People with this history will not suddenly make sensible investment decisions, but if they can defer taxes and defer claiming Social Security, they will be in better shape. If they have a break in employment, it may be very difficult to find another job. My friend has certainly discovered that.
+1 This was right to the point.

Unless they were hit by a catastrophe (health, weather or otherwise), it was always possible for someone to save and plan for the future. We had a lot of friends who used to take very exotic vacations for years, while we were squirreling away our little salaries and taking staycations (and hey, enjoying life too!). I feel compassion for those who did not plan ahead, and at a certain point those who did not save begin to compare themselves to others who did, and that disparity can raise negative feelings of regret, anger, self-blame, rage----and, most insidious of all, envy.

To avoid this, in certain circles we never speak about our travels, our philanthropy, and the other things we have begun to enjoy after decades of frugality. In such situations, we practice Stealth Wealth, and give advice in a limited way.
I'd like to live as a poor man with lots of money. ~Pablo Picasso

B. Wellington
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Re: What do you tell people who ask for retirement/investment advice?

Post by B. Wellington » Wed Mar 06, 2019 8:32 am

frugalecon wrote:
Wed Mar 06, 2019 5:24 am
I have a friend in the situation you described. He has basically mismanaged his personal finances for > 30 years, and he has pretty much ignored any advice. He lost his job more than 5 years ago, and he is now ekeing out a meager existence, relying on Social Security, public assistance programs, and handouts from friends. The best advice to give someone is to work as long as possible and save what they can. People with this history will not suddenly make sensible investment decisions, but if they can defer taxes and defer claiming Social Security, they will be in better shape. If they have a break in employment, it may be very difficult to find another job. My friend has certainly discovered that.
Sadly, I have a couple of family members in this situation as well. For whatever reason, they never asked me for advice either :confused

When it comes to money issues many people either get embarrassed, envious, jealous, maybe even angry, or they just completely shutdown and ignore the issues they are facing.

Over the years, I have learned to walk a very fine line in giving any advice even if that person knows about what I do (investing) or not. We keep our "stealth wealth" to ourselves, not out of selfishness but rather to just keep healthy relationships with family and friends.

As much as I enjoy talking about saving, frugal living, investing, and early retirement, when it comes to family and friends we usually don't discuss much on those topics.

FrankLUSMC
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Re: What do you tell people who ask for retirement/investment advice?

Post by FrankLUSMC » Wed Mar 06, 2019 9:20 am

I'm sure there are many of us who have friends and family who don't care to save, live beyond their means, and don't plan to leave any inheritance.
In fact I have talked to some who plan on going out in big debt. I don't ask further questions and I don't want to make them feel guilty.
I don't know if they feel guilty already or not.

In regards to saving and retirement planning, Yoda says "there are those that do and those that do not". Or I guess going out in debt is a plan.

I also have family that "games" the disability system. Sometimes they even try to get me to try for it. I tell them I don't tell lies for benefits and that usually shuts them up.

So in regards to the original question of the post, I usually observe, will make a suggestion if warranted, but I normally remain quiet for the sake of family and friends.

carolinaman
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Re: What do you tell people who ask for retirement/investment advice?

Post by carolinaman » Wed Mar 06, 2019 9:21 am

Giving financial advice depends upon an understanding of the person's financial situation. We often do not have enough information to give proper advice. The advice we give may or may not fit the individual's situation. So tread carefully.

dbr
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Re: What do you tell people who ask for retirement/investment advice?

Post by dbr » Wed Mar 06, 2019 9:23 am

I have helped people get medical support and public assistance. Investing has not been involved as assets are zero though there is income from SS and/or pensions. Situations can be personal and very complicated.

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gmaynardkrebs
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Re: What do you tell people who ask for retirement/investment advice?

Post by gmaynardkrebs » Wed Mar 06, 2019 11:05 am

CurlyDave wrote:
Wed Mar 06, 2019 1:48 am
DW and I are retired and it is obvious to people who know us that we are doing reasonably well. ..What do you people say to a person on the verge of retirement with no savings?
Suggestion: When in their company, try to make it less obvious how well you are doing.
Last edited by gmaynardkrebs on Wed Mar 06, 2019 11:26 am, edited 1 time in total.

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Re: What do you tell people who ask for retirement/investment advice?

Post by Jack FFR1846 » Wed Mar 06, 2019 11:14 am

If the person has lost their job years ago, recommend that they look at all those jobs that were beneath them that they didn't take or didn't consider. After all this time, they are not beneath them. It's time they go and beg for one of those jobs.
Bogle: Smart Beta is stupid

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gmaynardkrebs
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Re: What do you tell people who ask for retirement/investment advice?

Post by gmaynardkrebs » Wed Mar 06, 2019 11:25 am

Jack FFR1846 wrote:
Wed Mar 06, 2019 11:14 am
If the person has lost their job years ago, recommend that they look at all those jobs that were beneath them that they didn't take or didn't consider. After all this time, they are not beneath them. It's time they go and beg for one of those jobs.
In the same compassionate spirit, be sure also to tell them about all the tasty new recipes based on Laddie-Boy dog food.

Hockey10
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Re: What do you tell people who ask for retirement/investment advice?

Post by Hockey10 » Wed Mar 06, 2019 11:28 am

I tell them about a really great website called Bogleheads.org

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Re: What do you tell people who ask for retirement/investment advice?

Post by jharkin » Wed Mar 06, 2019 11:50 am

Not much you can do but advise them to work as long as they are physically able and cut expenses as much as possible.

I have multiple older relatives in that situation..... I *tried* to advise them to delay SS as long as possible but of course they all drew it at 62, claiming they "absolutely needed the income" even while still working full time :oops:

You know the saying, "You can lead a horse to water...."

flyingaway
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Re: What do you tell people who ask for retirement/investment advice?

Post by flyingaway » Wed Mar 06, 2019 12:08 pm

Agree that you gave good advice.
But most people just want to know what stock to buy at what time.

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CurlyDave
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Re: What do you tell people who ask for retirement/investment advice?

Post by CurlyDave » Wed Mar 06, 2019 12:12 pm

gmaynardkrebs wrote:
Wed Mar 06, 2019 11:05 am
CurlyDave wrote:
Wed Mar 06, 2019 1:48 am
DW and I are retired and it is obvious to people who know us that we are doing reasonably well. ..What do you people say to a person on the verge of retirement with no savings?
Suggestion: When in their company, try to make it less obvious how well you are doing.
We try not to be ostentatious, and only discuss our income with our tax preparer, but in our little community some things are going to be noticed.

When we walk out to the church parking lot with friends and our cars are relatively new, while theirs has the hood held closed with a bungie cord, the disparity is visible. I am not going to pretend that we have to hold the car door closed with a rope...

DrGoogle2017
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Re: What do you tell people who ask for retirement/investment advice?

Post by DrGoogle2017 » Wed Mar 06, 2019 12:16 pm

Nobody asked me, well maybe my ex-secretary. But she doesn’t want to retire, just wants to complain, so I stopped advising.

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gmaynardkrebs
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Re: What do you tell people who ask for retirement/investment advice?

Post by gmaynardkrebs » Wed Mar 06, 2019 12:18 pm

B. Wellington wrote:
Wed Mar 06, 2019 8:32 am

Over the years, I have learned to walk a very fine line in giving any advice even if that person knows about what I do (investing) or not. We keep our "stealth wealth" to ourselves, not out of selfishness but rather to just keep healthy relationships with family and friends. As much as I enjoy talking about saving, frugal living, investing, and early retirement, when it comes to family and friends we usually don't discuss much on those topics.
Yeah, and as far as giving even good advice, "no good deed goes unpunished" is my experience.

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Abe
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Re: What do you tell people who ask for retirement/investment advice?

Post by Abe » Wed Mar 06, 2019 12:35 pm

It's hard to help people. Many times they are older and don't have enough time to reap the benefits of long term investing. Also it's hard, almost impossible, to instill the values needed to save and invest unless they already have the temperament for it. Many people have bad habits ingrained in their lifestyle and don't want to change. It's not an easy thing to do.
Slow and steady wins the race.

retire2022
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Re: What do you tell people who ask for retirement/investment advice?

Post by retire2022 » Wed Mar 06, 2019 12:46 pm

All I think the larger issue in our society is we should mandate forced savings and make teens save ten years of IRAs, edit see link:

https://www.daveramsey.com/blog/how-tee ... llionaires

50% of Americans don’t know how to manage a rainy day and don’t have retirement savings it is sad, edit see link:

https://www.aarp.org/retirement/plannin ... tfall.html

I think people should be informed like the bogleheads, by not telling them they are their own worse enemy or peril.
Last edited by retire2022 on Wed Mar 06, 2019 6:36 pm, edited 1 time in total.

NotWhoYouThink
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Re: What do you tell people who ask for retirement/investment advice?

Post by NotWhoYouThink » Wed Mar 06, 2019 12:47 pm

I refer people to this site, and also to retirement planning tools like cFIRESim and ESPP. No one I ever talk IRL seems interested in talking about investments or costs. BIL/SIL need Dave Ramsey, they spend so much that investing isn't an option. But they haven't asked.

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sergeant
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Re: What do you tell people who ask for retirement/investment advice?

Post by sergeant » Wed Mar 06, 2019 12:54 pm

Nothing good will come from giving people financial advice. If/when their invested funds go down you will be to blame. They will only remember the loses and not the gains.
I did educate my children and they follow Boglehead principles.
Lincoln 3 EOW! AA 40/60.

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gmaynardkrebs
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Re: What do you tell people who ask for retirement/investment advice?

Post by gmaynardkrebs » Wed Mar 06, 2019 12:55 pm

CurlyDave wrote:
Wed Mar 06, 2019 12:12 pm
We try not to be ostentatious, and only discuss our income with our tax preparer, but in our little community some things are going to be noticed. When we walk out to the church parking lot with friends and our cars are relatively new, while theirs has the hood held closed with a bungie cord, the disparity is visible. I am not going to pretend that we have to hold the car door closed with a rope...
Great response. Thanks! :)

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Peter Foley
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Re: What do you tell people who ask for retirement/investment advice?

Post by Peter Foley » Wed Mar 06, 2019 1:36 pm

Odd coincidence - I raised this question at a recent local Bogleheads meeting on March 2nd. There were about 15 people present at this east Twin Cities (St. Paul suburb) session. I documented 23 separate items ranging from broad advice to very specific advice.

My takeaway was that you have to first assess where people are at (current financial situation, purpose of question, age, perceived financial well being, perceived financial wisdom, health expectations, goals, risk tolerance, etc.) and then move to appropriate advice (low cost, manage expectations, budgeting, asset allocation, tracking of investments, recommended information sources e.g, books, web sites, whole portfolio analysis, simplicity, etc.).

In short, there is not a single answer. An interesting take on the question was raised by Bh participant Jim. He stated that a better basis for discussion might be "What wisdom would you impart to your children?"

But that is another thread. . . .

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Abe
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Re: What do you tell people who ask for retirement/investment advice?

Post by Abe » Wed Mar 06, 2019 1:58 pm

sergeant wrote:
Wed Mar 06, 2019 12:54 pm
Nothing good will come from giving people financial advice. If/when their invested funds go down you will be to blame. They will only remember the loses and not the gains.
I had a relative who had a little money and asked me for advise on where to invest it. I suggested one of the Vanguard Life Strategy funds. She did in fact invest in one of the more aggressive life strategy funds; and as it turned out, the market did well during the time she was invested. One day I asked her how her investment was doing. She said it had not done very well. When I pressed her for details, she said that every time she had an emergency, she would take money out of the fund to pay for it. So she assumed the fund had not done very well because it didn't have much more money in it than her original investment. Go figure.

I had another relative who was with Edward Jones, but he asked me for advise. I recommended one of the VG Life Strategy funds for him also. I explained the risk/reward concept to him, and he picked the most conservative fund because he said he didn't want to lose any money. After a few years he said the fund was not giving him enough return. I told him he couldn't expect a real high return since he invested in a fund that was I think 80% bonds. I explained all this to him before he invested a penny. So now he thinks I gave him bad advise because his 80% bond fund didn't reutrn as much as some of the riskier funds his Edward Jones guy had him in. As I said in an earlier post, it's hard to help people.
Slow and steady wins the race.

Day9
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Re: What do you tell people who ask for retirement/investment advice?

Post by Day9 » Wed Mar 06, 2019 2:02 pm

In some ways it feels like giving solicited retirement/investment advice is even harder than the standard set of controversial topics (e.g. politics, religion, diet & exercise) for the reasons the above posters have said (no good deed goes unpunished). But they have a lot of similarities. It's probably best to avoid talking about these subjects around coworkers, and it is very important to instill these values to your children.
I'm just a fan of the person I got my user name from

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FelixTheCat
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Re: What do you tell people who ask for retirement/investment advice?

Post by FelixTheCat » Wed Mar 06, 2019 2:07 pm

I tell everyone the same thing. Go to Bogleheads.org. If they care enough about their finances then they will do the research.
Felix is a wonderful, wonderful cat.

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Re: What do you tell people who ask for retirement/investment advice?

Post by Chadnudj » Wed Mar 06, 2019 2:10 pm

CurlyDave wrote:
Wed Mar 06, 2019 1:48 am
The only thing I could tell him was to delay SS as long as possible, even if he has to work longer. And I pointed out that if he experiences a shortfall later in life it will be much more difficult to get a job than if he keeps working now.
One other piece of advice -- he should downsize now, rather than later. And by that I mean downsize everything -- his house, his car, his ongoing expenses, his possessions, etc., so that he has lower overhead and can save more (and, in the case of selling possessions/house, hopefully get top dollar rather than having to sell at an otherwise desperate time). Downsizing to a smaller place/lower cost lifestyle now while he's still working/saving/delaying Social Security will really make making ends meet in an eventual retirement a helluva lot easier.

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munemaker
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Re: What do you tell people who ask for retirement/investment advice?

Post by munemaker » Wed Mar 06, 2019 2:23 pm

Most of my friends don't know I am knowledgeable about investing and our life style would certainly not indicate it. On the few occasions when I am asked, I usually give a few words of very generic advice.

For example, a retired friend (who did not invest his entire life saying the market was too risky) asked me with the market at an all time high, if this was a good time to invest for the first time. I replied..."The market is at an all time high. It can continue to go higher, but if you have not invested throughout your lifetime, I might wait for a pullback." After the 20% pullback in December, I sent him a text saying..."The market may continue to drop, but this would be a better entry point than when you previously asked me." Did not receive anything back and did not follow up. I am guessing either he already bought at the high, contrary to my suggestion, or the drop in the market scare him off.

DonIce
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Re: What do you tell people who ask for retirement/investment advice?

Post by DonIce » Wed Mar 06, 2019 2:26 pm

For all the reasons above, I would never suggest a specific fund, ETF, stock, asset allocation strategy, amount to invest, time to invest, etc. However, that doesn't mean you can't give people useful advice.

Start with explaining some of the basic "bogleheads principles".
https://www.bogleheads.org/wiki/Boglehe ... philosophy

jsprag
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Re: What do you tell people who ask for retirement/investment advice?

Post by jsprag » Wed Mar 06, 2019 3:59 pm

1. Don't be tempted by any scams, get rich quick schemes, hail mary investments, etc... These often prey on desperate people with limited options.

2. Tell them to have an honest conversation with children, and have it early. Having elderly and destitute parents moving in can be tough. It can be even tougher when it's a surprise. Who knows, it might be win-win if there are grandchildren that need care or the elderly parents can do some household tasks.

3. Learn everything they can about public assistance benefits for low-income households.

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Re: What do you tell people who ask for retirement/investment advice?

Post by jsprag » Wed Mar 06, 2019 4:03 pm

Chadnudj wrote:
Wed Mar 06, 2019 2:10 pm
One other piece of advice -- he should downsize now, rather than later. And by that I mean downsize everything -- his house, his car, his ongoing expenses, his possessions, etc., so that he has lower overhead and can save more (and, in the case of selling possessions/house, hopefully get top dollar rather than having to sell at an otherwise desperate time). Downsizing to a smaller place/lower cost lifestyle now while he's still working/saving/delaying Social Security will really make making ends meet in an eventual retirement a helluva lot easier.
If I only had time to pass one piece of advice, this would be it.

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Re: What do you tell people who ask for retirement/investment advice?

Post by Dottie57 » Wed Mar 06, 2019 4:39 pm

A friend and her husband asked me for advice. Sent them a link to the wiki with some other links.

Did they try the links? Absolutely not! Didn’t even take a peek. Instead they went to an advisor. Neither of them will take responsibility for their investments. You can’t help them.

Beginning of the year, they asked If I would do their taxes. I sad “No”.

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Re: What do you tell people who ask for retirement/investment advice?

Post by fposte » Wed Mar 06, 2019 6:19 pm

CurlyDave wrote:
Wed Mar 06, 2019 12:12 pm
When we walk out to the church parking lot with friends and our cars are relatively new, while theirs has the hood held closed with a bungie cord, the disparity is visible. I am not going to pretend that we have to hold the car door closed with a rope...
Heh. Sounds like my car. Your fellow parishioners may be doing better than you think.

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Raybo
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Re: What do you tell people who ask for retirement/investment advice?

Post by Raybo » Wed Mar 06, 2019 6:28 pm

I find that people who ask me for advice often are open to what I have to say. I always start by asking what their goals are. This usually focuses the conversation on them and their desires. Most people are open to such discussions. I also ask a lot of specific financial questions.

Mostly, I offer common sense information about how much one can expect to spend in retirement, the effect of high expenses, how easy it is to do yourself, etc.

I never offer unsolicited advice.
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

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Re: What do you tell people who ask for retirement/investment advice?

Post by Jags4186 » Wed Mar 06, 2019 6:43 pm

gmaynardkrebs wrote:
Wed Mar 06, 2019 12:55 pm
CurlyDave wrote:
Wed Mar 06, 2019 12:12 pm
We try not to be ostentatious, and only discuss our income with our tax preparer, but in our little community some things are going to be noticed. When we walk out to the church parking lot with friends and our cars are relatively new, while theirs has the hood held closed with a bungie cord, the disparity is visible. I am not going to pretend that we have to hold the car door closed with a rope...
Great response. Thanks! :)
Perhaps the bungee folks are the real stealth wealth laughing at your new clown cars :twisted:

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Re: What do you tell people who ask for retirement/investment advice?

Post by frugalecon » Wed Mar 06, 2019 6:48 pm

jsprag wrote:
Wed Mar 06, 2019 4:03 pm
Chadnudj wrote:
Wed Mar 06, 2019 2:10 pm
One other piece of advice -- he should downsize now, rather than later. And by that I mean downsize everything -- his house, his car, his ongoing expenses, his possessions, etc., so that he has lower overhead and can save more (and, in the case of selling possessions/house, hopefully get top dollar rather than having to sell at an otherwise desperate time). Downsizing to a smaller place/lower cost lifestyle now while he's still working/saving/delaying Social Security will really make making ends meet in an eventual retirement a helluva lot easier.
If I only had time to pass one piece of advice, this would be it.
The “rather than later” part is particularly important. People in this situation will eventually downsize, but it is more chaotic when it is done involuntarily and abruptly.

delamer
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Re: What do you tell people who ask for retirement/investment advice?

Post by delamer » Wed Mar 06, 2019 6:50 pm

The situation I find myself in with some neighbors is responding to their observations regarding their personal finances, rather than requests for advice.

Usually they comment that they can’t afford to stay in our HCOL area at retirement or that they couldn’t buy a house in our neighborhood today because prices have risen so much in the last 20 years.

And there I sit in silence because neither of those things remotely apply to us.

It is awkward. And sometimes I suspect they might be fishing for our info. But I don’t bite.

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Re: What do you tell people who ask for retirement/investment advice?

Post by Fallible » Wed Mar 06, 2019 6:59 pm

Peter Foley wrote:
Wed Mar 06, 2019 1:36 pm
Odd coincidence - I raised this question at a recent local Bogleheads meeting on March 2nd. There were about 15 people present at this east Twin Cities (St. Paul suburb) session. I documented 23 separate items ranging from broad advice to very specific advice.

My takeaway was that you have to first assess where people are at (current financial situation, purpose of question, age, perceived financial well being, perceived financial wisdom, health expectations, goals, risk tolerance, etc.) and then move to appropriate advice (low cost, manage expectations, budgeting, asset allocation, tracking of investments, recommended information sources e.g, books, web sites, whole portfolio analysis, simplicity, etc.).

In short, there is not a single answer. . . .
Your takeaway is a great example of why it's so difficult to provide advice that is right for an individual and can therefore be effective.
John Bogle on his often bumpy road to low-cost indexing: "When a door closes, if you look long enough and hard enough, if you're strong enough, you'll find a window that opens."

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JoeRetire
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Re: What do you tell people who ask for retirement/investment advice?

Post by JoeRetire » Wed Mar 06, 2019 7:00 pm

CurlyDave wrote:
Wed Mar 06, 2019 1:48 am
but what do you people say to a person on the verge of retirement with no savings?
Each case is different. I'd tell them whatever is possible that seems to make the most sense for their case.

Sometimes the answer is "learn to get by on less".
Somehow I just wasn't able to tell him that the time for serious saving was 3 or more decades ago, and that there just aren't any ways now to match the accumulated wealth we have in the time he has.
There seems little value in telling someone "you screwed up in the past". They can't go back and re-do things.
Focus on what they can do going forward, not the mistakes they made in the past.
Don't be a lemming.

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JoeRetire
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Re: What do you tell people who ask for retirement/investment advice?

Post by JoeRetire » Wed Mar 06, 2019 7:05 pm

frugalecon wrote:
Wed Mar 06, 2019 5:24 am
People with this history will not suddenly make sensible investment decisions
You don't know that. People can change - particularly when they educate themselves.

Perhaps you meant to say that sometimes even sensible investments going forward can't make up for years of poor decisions?
but if they can defer taxes and defer claiming Social Security, they will be in better shape.
Yup, maybe.
If they have a break in employment, it may be very difficult to find another job. My friend has certainly discovered that.
True. But there is always work available. It's seldom true that people cannot find any job at all.
Don't be a lemming.

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JoeRetire
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Re: What do you tell people who ask for retirement/investment advice?

Post by JoeRetire » Wed Mar 06, 2019 7:10 pm

sergeant wrote:
Wed Mar 06, 2019 12:54 pm
Nothing good will come from giving people financial advice.

I did educate my children and they follow Boglehead principles.
Seems like some good can indeed come from giving some people financial advice...
Don't be a lemming.

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JoeRetire
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Re: What do you tell people who ask for retirement/investment advice?

Post by JoeRetire » Wed Mar 06, 2019 7:14 pm

Raybo wrote:
Wed Mar 06, 2019 6:28 pm
I find that people who ask me for advice often are open to what I have to say. I always start by asking what their goals are. This usually focuses the conversation on them and their desires. Most people are open to such discussions. I also ask a lot of specific financial questions.

Mostly, I offer common sense information about how much one can expect to spend in retirement, the effect of high expenses, how easy it is to do yourself, etc.

I never offer unsolicited advice.
Good answer. This is what I try to do as well.

Once I retired, I guess I became "smart" in some folks' eyes, since they ask me lots of financial questions.
Don't be a lemming.

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Re: What do you tell people who ask for retirement/investment advice?

Post by quantAndHold » Wed Mar 06, 2019 7:33 pm

When the young guys at work asked questions, which they often did because they were new at having money and I was the resident grey hair, I told them about basic boglehead principles. Some actually listened and acted on what I said, which was gratifying.

When a close friend, who is about to retire with a good pension, asked questions about her situation that implied that she didn't know how to do the math to figure out how much money she could spend, I taught her the basics of SWR math.

When the neighbor who works for a large bank told me that 100% of his 401k was in his employer's company stock, I kept my mouth shut. He wasn't asking a question.

Other than that, people don't ask. I'm just a random 55 year old who lives in a very expensive house in a VHCOL city, but drives a 15 year old car and doesn't work for some unknown reason. Around here, that's actually pretty normal.

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Re: What do you tell people who ask for retirement/investment advice?

Post by 986racer » Wed Mar 06, 2019 7:46 pm

Would it be easier to help them come to the calculations themselves? I.e., suggest the following

1. They should figure out how much money they need monthly. You could offer suggestions on how to track current expenses via Mint, YNAB, or a spreadsheet
2. Subtract social security and any pensions to find the gap. You could then educate on the benefits of delaying SS
3. Explain the 4% rule for figuring out how much they need to save to cover the gap.

Since there isn’t a lot of time for compounding to work its magic, if there is a shortfall, they will need to start downsizing to both save more and to reduce the gap

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