Should I still get a Fin Advisor if I only want a lazy portfolio?

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tyro
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Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

Thank you Bogleheads on question by extreme newbie:

What about getting a Financial Advisor for 1-2 years even though I only want a lazy portfolio? Will a FA even let you just buy just Vanguard lazy portfolio? Maybe if you pay them hourly?

DH and I are clueless and neither of us has ever had a financial planner as I was always paying back private medical school/private college loans and he was "not a stock market guy" and thought he could make more in private investments from "smart" friends (didn't work). Now that my loans are paid and we are bringing in 400k, paying our mortgage and able to save about 100k a year I just want to start a lazy portfolio and think in the future I can learn about re-balancing and some of the stuff of total bond market in tax-deferred vs total stock market in taxed accounts, etc.

HOWEVER, I could use some real guidance on the SEP-IRA, solo-401k, 403b, tIRA, backdoor to Roth IRA, conversions, etc. This is the complicated stuff and dh does have an accountant but we need real guidance. For example, DH had 401k, then rolled into Fidelity IRA, we need to backdoor tIRA for both of us to Roth, I think he should do solo 401k next year instead of SEP-IRA since he is now self-employed, I may be able to get 403b if I increase hours at one job, his accounts at Fidelity I would like to move to Vanguard, mine at Vangaurd, etc....

Pros:
I could learn what is the most efficient allocation within these retirement account options. It seems at this point that on the internet and the books there is just not enough information to figure this out for 2016.

Cons:
It will cost more but that will only be for a year or two.
I will feel uncomfortable acting like we want a FA when I really don't want any investment theory advice.
I really don't trust anyone else with my money but me.
kenner
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by kenner »

You may be perfect candidates for Vanguard Personal Advisor Service. Their Certified Financial Planners (the top of the heap) will work with you in order to help you set up an investment plan suited to your unique situation and long term goals. The initial cost will be 0.30% per year of assets under management. After a year or two you can terminate their services and manage your portfolio on your own if you wish to do so.
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EngCapt1
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by EngCapt1 »

Maybe check into this?

https://investor.vanguard.com/financial ... ial-advice

*EDIT

+1 to what kenner posted while I was looking for the link....
mhalley
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by mhalley »

Sounds like what you need is a fee only financial planner. You pay them for their advice at an hourly rate, and then you implement their advice on your own. Check out these web sites to search for one:
https://www.napfa.org/
or
https://www.garrettplanningnetwork.com/
Another option would be to use Vanguard PAS for a year and then cancel it once you get everything setup and are on cruise control.
Note that to do a backdoor Roth, you should not have any money in a traditional IRA or SEP IRA(makes taxes more complicated), so hubby might want to roll those iras back into a 401k, or if it is not too much money go ahead and convert it too.
MittensMoney
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by MittensMoney »

First and foremost, ensure whoever you work with is a Fiduciary. Second, someone who can implement a smart Tax-Loss Harvesting plan on your behalf will be worthwhile, at your income level with the amount you'll be investing in taxable accounts a well implemented TLH strategy can have a large impact.
Topic Author
tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

EngCapt1 wrote:Maybe check into this?

https://investor.vanguard.com/financial ... ial-advice

*EDIT

+1 to what kenner posted while I was looking for the link....
Wow, thank you kenner and EngCapt1! I was actually looking at these at .3% but I read someone recommended this for a guy with 7.5 million at ML. Also, I had the feeling this is a person you have a relationship with and can't break it that easily. However, much easier to break from person from Vanguard that doesn't try to be friends.

1) How do you get assigned?
2) I assume most can help me through this mostly legal/accounting/clerical stuff since I am an economics major and believed in a lazy portfolio before I even read about it (just had no money) so not up to anything else.

This would be great! Thank you!
ChesaPeAke27
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by ChesaPeAke27 »

If your CPA is worth their salt then he/she should be able to provide a bit of help sorting all of this out as well. They are likely quite familiar with your situation. Look to see if the firm has a CPA who has their PFS license or a CFP cert. These folks typically specialize in the personal planning sector of the business.
ChesaPeAke27
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tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

ChesaPeAke27 wrote:If your CPA is worth their salt then he/she should be able to provide a bit of help sorting all of this out as well. They are likely quite familiar with your situation. Look to see if the firm has a CPA who has their PFS license or a CFP cert. These folks typically specialize in the personal planning sector of the business.
Thank you ChesaPeAke27. I have no idea if this CPA is great or not since I thought my only job was to work on paying med school debt and then kid stuff and this was dh accountant from pre-marital. He is a pretty naive guy (fell for me) but seriously he is from a farm and this accountant might be fine but might not. She does seemed to be pushing a financial advisor that works with her and also a defined benefit plan but I will give her a break as she may have been trying to reign in my stubborn dh who is "not a stock market guy" without losing a client. I will check these PFS lis and CFP cert. Thank you!!!
Alan S.
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by Alan S. »

Be aware of using a financial advisor without any restrictions, particularly if it involves any referrals with your tax preparer. You will invariably end up with many more issues in your portfolio than you want or is necessary, probably including a limited partnership that will kick out K1 forms and other exotic holdings. You may well end up not being able to file your own returns anymore and have to hire a CPA or other tax pro. I have a friend in this situation and for an otherwise simple return he is now paying a CPA $700 a year to file his return and understands very little about several of his investments.

Another caveat with this setup is that once you have a complex portfolio and several trades with a complex tax return, it can be difficult and costly to return it to a simple, tax efficient portfolio.

Sort of like the tax code itself, new provisions are added every year and simplification never happens because phasing out of provisions is much more complex and difficult than adding them in the first place.
Topic Author
tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

Alan S. wrote:Be aware of using a financial advisor without any restrictions, particularly if it involves any referrals with your tax preparer. You will invariably end up with many more issues in your portfolio than you want or is necessary, probably including a limited partnership that will kick out K1 forms and other exotic holdings. You may well end up not being able to file your own returns anymore and have to hire a CPA or other tax pro. I have a friend in this situation and for an otherwise simple return he is now paying a CPA $700 a year to file his return and understands very little about several of his investments.

Another caveat with this setup is that once you have a complex portfolio and several trades with a complex tax return, it can be difficult and costly to return it to a simple, tax efficient portfolio.

Sort of like the tax code itself, new provisions are added every year and simplification never happens because phasing out of provisions is much more complex and difficult than adding them in the first place.
Thank you Alan S. Interesting you say that as I am not sure of my tax preparer who has been dh's accountant for years but not mine and we have never met. I asked for an appointment to meet her and listed some dates and she answered some email questions but did not agree to meet. Isn't it normal to meet your accountant? He has K-1s and does not seem to know anything but seems so confident in her. Says I can go back to my own accountant and file separately if I don't like her. He is very emphatic that she is the only one that can understand his tax situation. How can a bunch of K-1s be so hard? That seems odd to me and she cost a few thousand dollars a year. No interesting stock trades but just the k-1s. I need to check credentials.
bluebolt
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by bluebolt »

tyro wrote:
Alan S. wrote:Be aware of using a financial advisor without any restrictions, particularly if it involves any referrals with your tax preparer. You will invariably end up with many more issues in your portfolio than you want or is necessary, probably including a limited partnership that will kick out K1 forms and other exotic holdings. You may well end up not being able to file your own returns anymore and have to hire a CPA or other tax pro. I have a friend in this situation and for an otherwise simple return he is now paying a CPA $700 a year to file his return and understands very little about several of his investments.

Another caveat with this setup is that once you have a complex portfolio and several trades with a complex tax return, it can be difficult and costly to return it to a simple, tax efficient portfolio.

Sort of like the tax code itself, new provisions are added every year and simplification never happens because phasing out of provisions is much more complex and difficult than adding them in the first place.
Thank you Alan S. Interesting you say that as I am not sure of my tax preparer who has been dh's accountant for years but not mine and we have never met. I asked for an appointment to meet her and listed some dates and she answered some email questions but did not agree to meet. Isn't it normal to meet your accountant? He has K-1s and does not seem to know anything but seems so confident in her. Says I can go back to my own accountant and file separately if I don't like her. He is very emphatic that she is the only one that can understand his tax situation. How can a bunch of K-1s be so hard? That seems odd to me and she cost a few thousand dollars a year. No interesting stock trades but just the k-1s. I need to check credentials.
I find it hard to believe that his tax situation should cost thousands of dollars a year. If he's not running a business, has regular & investment income (including K-1s), it should cost hundreds of dollars, maybe cracking $1000 if there are pretty unique circumstances.

He should get quotes from some other preparers. Even if he doesn't want to switch, will at least open his eyes to what's out there and maybe allow him to negotiate with the current person.
dvdman
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by dvdman »

I am in that situation now. I went to my CPA yesterday to have them roll and set up a solo 401K. I only have $67K and they want to charge a $600 annual fee and $325 a quarter. I am looking into Vanguard or Fidelity currently.
NotWhoYouThink
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by NotWhoYouThink »

You may need to think about 2 separate tasks - financial planning and investment management.

A financial planner should maybe get paid by the hour to advise you on what kinds of accounts you should have, and how contributions to those accounts would affect your current and future tax situation. This is the kind of person that is probably expensive and hard to find, although you can crowdsource some pretty good solutions on this board.

An investment advisor would recommend what kinds of investments to put in those accounts, and charge you an annual fee for Assets Under Management, usually. These advisors can be found on every street corner (I'm looking at you, E. Jones) and brokerage house, and are almost always sales people pretending to know much more about finances than they do. They rely on their back office boffins to tell them where to put your money, and you pay for the privilege. They can give no useful information whatever about what kinds of accounts you should have, or how that will affect your current of future taxes. Their professional skill is sales. You don't need these people.

Once you decide on the financial planning part, you can use Vanguard PAS to keep the asset allocation you decide on, or you can DIY.
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tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

bluebolt wrote:I find it hard to believe that his tax situation should cost thousands of dollars a year. If he's not running a business, has regular & investment income (including K-1s), it should cost hundreds of dollars, maybe cracking $1000 if there are pretty unique circumstances.

He should get quotes from some other preparers. Even if he doesn't want to switch, will at least open his eyes to what's out there and maybe allow him to negotiate with the current person.
Thank you bluebolt. The owner of this tax firm did some work for his friends setting up these LLC RE mortgage deals and he gets 4-5 K-1s from that totaling about 40-50k/year and the accountant is a woman that works for the owner of the firm. I guess it is more expensive since it is like 2 sets of taxes. One set is the K-1s from the mortgage deals in a premarital trust that maybe is set up like a business and the other set is our regular personal taxes. He seems to think that these are the only people that can understand his unique tax situation. He is really bad with money so he may think this is more complicated than it is. I don't know how this accountant could let him hardly put any money in retirement accounts all these years even when he was making 300-800k a year and losing almost all of it in bad deals so not so sure about things. They are on Long Island and she seems eager to set me up with a financial advisor they work with. No thanks. I will get one from Vanguard. I don't trust anyone with my money anymore.
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tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

NotWhoYouThink wrote:You may need to think about 2 separate tasks - financial planning and investment management.

A financial planner should maybe get paid by the hour to advise you on what kinds of accounts you should have, and how contributions to those accounts would affect your current and future tax situation. This is the kind of person that is probably expensive and hard to find, although you can crowdsource some pretty good solutions on this board.

An investment advisor would recommend what kinds of investments to put in those accounts, and charge you an annual fee for Assets Under Management, usually. These advisors can be found on every street corner (I'm looking at you, E. Jones) and brokerage house, and are almost always sales people pretending to know much more about finances than they do. They rely on their back office boffins to tell them where to put your money, and you pay for the privilege. They can give no useful information whatever about what kinds of accounts you should have, or how that will affect your current of future taxes. Their professional skill is sales. You don't need these people.

Once you decide on the financial planning part, you can use Vanguard PAS to keep the asset allocation you decide on, or you can DIY.
Thank you for that information. So I really need 3 people? The 1) Financial Planner, 2) The investment advisor and 3) an accountant? The asset allocation part I am fine with since I want a lazy portfolio and I have decided to use Vanguard PAS but now you are saying I actually need the financial planner too? I guess I was thinking the PAS would do that. Confusing. Do you have a recommendation for one? I am in NYC. Thank you!
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Sandtrap
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by Sandtrap »

EngCapt1 wrote:Maybe check into this?

https://investor.vanguard.com/financial ... ial-advice

*EDIT

+1 to what kenner posted while I was looking for the link....
+1
Vanguard Personal Advisor Service. At .3% a great deal.
Consider it "training wheels". Take them off when you are ready.
Wiki Bogleheads Wiki: Everything You Need to Know
bluebolt
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by bluebolt »

tyro wrote:
bluebolt wrote:I find it hard to believe that his tax situation should cost thousands of dollars a year. If he's not running a business, has regular & investment income (including K-1s), it should cost hundreds of dollars, maybe cracking $1000 if there are pretty unique circumstances.

He should get quotes from some other preparers. Even if he doesn't want to switch, will at least open his eyes to what's out there and maybe allow him to negotiate with the current person.
Thank you bluebolt. The owner of this tax firm did some work for his friends setting up these LLC RE mortgage deals and he gets 4-5 K-1s from that totaling about 40-50k/year and the accountant is a woman that works for the owner of the firm. I guess it is more expensive since it is like 2 sets of taxes. One set is the K-1s from the mortgage deals in a premarital trust that maybe is set up like a business and the other set is our regular personal taxes. He seems to think that these are the only people that can understand his unique tax situation. He is really bad with money so he may think this is more complicated than it is. I don't know how this accountant could let him hardly put any money in retirement accounts all these years even when he was making 300-800k a year and losing almost all of it in bad deals so not so sure about things. They are on Long Island and she seems eager to set me up with a financial advisor they work with. No thanks. I will get one from Vanguard. I don't trust anyone with my money anymore.
Easy enough to get a quote from a preparer with the last 2-3 years of returns. Pretty low commitment and worth it just to gauge the market. If someone else tells you a figure that's in the same ballpark at least you know your DH is not getting played.
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tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

bluebolt wrote:
tyro wrote:
bluebolt wrote:I find it hard to believe that his tax situation should cost thousands of dollars a year. If he's not running a business, has regular & investment income (including K-1s), it should cost hundreds of dollars, maybe cracking $1000 if there are pretty unique circumstances.

He should get quotes from some other preparers. Even if he doesn't want to switch, will at least open his eyes to what's out there and maybe allow him to negotiate with the current person.
Thank you bluebolt. The owner of this tax firm did some work for his friends setting up these LLC RE mortgage deals and he gets 4-5 K-1s from that totaling about 40-50k/year and the accountant is a woman that works for the owner of the firm. I guess it is more expensive since it is like 2 sets of taxes. One set is the K-1s from the mortgage deals in a premarital trust that maybe is set up like a business and the other set is our regular personal taxes. He seems to think that these are the only people that can understand his unique tax situation. He is really bad with money so he may think this is more complicated than it is. I don't know how this accountant could let him hardly put any money in retirement accounts all these years even when he was making 300-800k a year and losing almost all of it in bad deals so not so sure about things. They are on Long Island and she seems eager to set me up with a financial advisor they work with. No thanks. I will get one from Vanguard. I don't trust anyone with my money anymore.
Easy enough to get a quote from a preparer with the last 2-3 years of returns. Pretty low commitment and worth it just to gauge the market. If someone else tells you a figure that's in the same ballpark at least you know your DH is not getting played.
Great. Thank you! He seems to think that the person has to have expertise in RE mortgage deals or something. Do you happen to know if that is true or how I would find one?
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tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

Sandtrap wrote:
EngCapt1 wrote:Maybe check into this?
https://investor.vanguard.com/financial ... ial-advice
*EDIT
+1 to what kenner posted while I was looking for the link....
+1
Vanguard Personal Advisor Service. At .3% a great deal.
Consider it "training wheels". Take them off when you are ready.
Thank you. I 100% will do that and really appreciate that advice. Do you know where I get an hourly financial planner also? I am really confused about if it is the PAS or the financial planner figures out the solo 401k, SEP-IRA, 403b, rollover IRA, Roth part. Does the accountant do any of this?
kenner
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by kenner »

Tyro,

Just noticed you have two posts going simultaneously. Since you've already indicated that you intend to contact VPAS, I recommend that you slow down, arrange a joint telephone conference to include you, your DH and a VPAS representative to discuss your entire financial picture in order to obtain their guidance as to the best way for you and DH to proceed in order to maximize your future financial success.

One correct step at a time is the best way to proceed.

I routinely recommend VPAS to my legal clients and results are consistently successful. The goal is always to establish a solid overall investment/financial long-term plan based on all available information and goals.
Topic Author
tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

kenner wrote:Tyro,

Just noticed you have two posts going simultaneously. Since you've already indicated that you intend to contact VPAS, I recommend that you slow down, arrange a joint telephone conference to include you, your DH and a VPAS representative to discuss your entire financial picture in order to obtain their guidance as to the best way for you and DH to proceed in order to maximize your future financial success.Thank you so much kenner. After reading about investment strategy it didn't seem like I wanted an advisor to tell me anything but a lazy portfolio but my head was starting to explode over the whole 401k. SEP-IRA, solo 401k, Roth stuff with mixed accounts so I asked this FA question and just last night decided on this VPAS. What a relief!

One correct step at a time is the best way to proceed.

I routinely recommend VPAS to my legal clients and results are consistently successful. The goal is always to establish a solid overall investment/financial long-term plan based on all available information and goals.
Great to hear that they have been happy with VPAS. Someone just said that in addition to VPAS I need a financial planner. Do you agree and if you do you have any suggestions? Do you know how VPAS are assigned? Wonder if I should call now before I waste more brain energy on trying to figure everything out. Thanks again!
kenner
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by kenner »

Tyro,

My suggestion is that you and DH kick back and relax over the weekend, maybe have a couple glasses of wine.

This is not a race, it is a path to develop the best long-term plan for your family's future wealth in the most efficient, cost-effective way possible. That includes utilizing all relevant forms of tax-advantaged accounts. And it is dependent on carefully examining all relevant information, including your current financial picture and goals.

However, just so you are aware, in my experience VPAS probably will not second-guess or undertake to manage prior investments such as real estate LLCs or the like that may or may not be successful.

My experience with VPAS convinces me that they will definitely have your best interests at heart while they evaluate the best ways to enhance your family's future wealth.

They won't put you in get-rich-quick schemes. They will adhere to a globally diversified total markets approach that is tax- and cost-efficient, taking into account the entire universe of available types of accounts and appropriate investments that belong in those accounts.

Someone just said that in addition to VPAS I need a financial planner. Do you agree and if you do you have any suggestions?

I recommend that you talk at length with a CFP at VPAS before you consider this suggestion. I doubt that employing an additional financial planner is necessary.

Do you know how VPAS are assigned?

My most recent understanding is that all VPAS advisors are CFPs. The website will hopefully confirm this is still the case. Make sure a CFP is in charge of your account (they have the broadest knowledge of the intricacies of the investment and financial worlds).

Wonder if I should call now before I waste more brain energy on trying to figure everything out. Thanks again!

Again, take the weekend off and enjoy yourselves.

Please feel free to send me a private message if I can be of any help.
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tyro
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

kenner wrote:Tyro,

My suggestion is that you and DH kick back and relax over the weekend, maybe have a couple glasses of wine. Agree. Thank you. I just went online to get the VPAS and they don't have a convient phone time until March. I am feeling so much better that everyone seems to think the VPAS is a good idea. I just can't do this myself with zero knowledge.

This is not a race, it is a path to develop the best long-term plan for your family's future wealth in the most efficient, cost-effective way possible. That includes utilizing all relevant forms of tax-advantaged accounts. And it is dependent on carefully examining all relevant information, including your current financial picture and goals.Yes. I am just really getting into this because I thought dh was saving consistantly and I left finances entirely up to him. Also, we need to figure out how much to put in his SEP-IRA for 2016 and start a solo 401k for 2017 and I need to handle this. I need to understand everything before things get more screwed up.

However, just so you are aware, in my experience VPAS probably will not second-guess or undertake to manage prior investments such as real estate LLCs or the like that may or may not be successful.Not expecting any management with that. It is a premarital trust and not part of what is "ours."

My experience with VPAS convinces me that they will definitely have your best interests at heart while they evaluate the best ways to enhance your family's future wealth.

They won't put you in get-rich-quick schemes. They will adhere to a globally diversified total markets approach that is tax- and cost-efficient, taking into account the entire universe of available types of accounts and appropriate investments that belong in those accounts.Excellent. Exactly what I need. I don't believe in get-rich-schemes. Just want to put my hard earned dollars into growing with the market.

Someone just said that in addition to VPAS I need a financial planner. Do you agree and if you do you have any suggestions?

I recommend that you talk at length with a CFP at VPAS before you consider this suggestion. I doubt that employing an additional financial planner is necessary.Got it.

Do you know how VPAS are assigned?

My most recent understanding is that all VPAS advisors are CFPs. The website will hopefully confirm this is still the case. Make sure a CFP is in charge of your account (they have the broadest knowledge of the intricacies of the investment and financial worlds).

Wonder if I should call now before I waste more brain energy on trying to figure everything out. Thanks again!

Again, take the weekend off and enjoy yourselves.

Please feel free to send me a private message if I can be of any help.
Thank you so much kenner! You have been such great help. I completed the VPAS questionnaire but will get dh to go over before submitting because I think it will really help him start thinking about things. He doesnt get that you plan retirement before you retire. Whew. Thank you as I am feeling so much better now that I can get the VPAS!
kenner
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by kenner »

tyro wrote: He doesnt get that you plan retirement before you retire. Whew. Thank you as I am feeling so much better now that I can get the VPAS!
The judgment of the ages is that the most successful retirements were carefully and meticulously planned decades ahead of time.

I hope that you and DH become one of the all-too-few American retirement success stories.
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Meg77
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Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by Meg77 »

Hi there. I think it is great that you are diving into all this! But it sounds like you and your husband are on very different pages financially. Your efforts may backfire or even cause a relationship rift if he isn't on board with the direction you are trying to go. I think the first step before looking for a new CPA or hiring a financial advisor is to connect with your spouse and establish some mutual values and - from there - joint financial goals. You hiring a planner and trying to save on one hand is pointless if he's rolling his eyes and spending whatever he wants on the other hand. Not sure that's happening; I'm just giving an example.

If he loves his CPA and insists on keeping her since she does the business books as well, that may be a fine concession to make. Coming in and second-guessing his judgement on this may not be worth the hassle. Taxes aren't that hard at the end of the day, and unless she's incompetent I'm sure she's doing a fine job plugging in the boring figures to a software program. But not many CPAs are very good at giving advice or advising on strategy. And while it's not necessarily normal to meet them regularly, I would insist on a meeting with you AND your husband so you can be introduced now that his circumstances have changed (i.e. he got married!).

There are many different types of financial planner. You can pay by the hour for specific advice on opening accounts and basic strategy. You can pay a flat fee for a comprehensive financial plan (insurance, estate planning, investment advice, tax efficiency). Those can run $2500-$10000 but those planners won't try to manage your money for you or sell you anything. A full service investment manager/advisor can be helpful especially when it comes to behavioral coaching and convincing you not to make impulsive decisions with the portfolio. Those charge a percentage of assets under management, usually around 1%.

For now though, honestly you probably just need to max out retirement accounts and accumulate cash after that while you and your hubby get on the same page and establish some goals. Once that's done, you can try to go it alone or hire a fee based or flat rate planner to do some coaching. This could be helpful if for no other reason than so you aren't the one shaking everything up on your own.

Good luck!
"An investment in knowledge pays the best interest." - Benjamin Franklin
psychoslowmatic
Posts: 219
Joined: Fri Jul 19, 2013 2:34 pm

Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by psychoslowmatic »

You mention medical school debt and a high income. You should really go here: http://whitecoatinvestor.com/new-to-the ... tart-here/

Second, don't think you have to have your finances for the next 30 years squared away by Monday. It's not going to make much of a difference to your retirement if you take even 6 months to educate yourself and come up with a plan.

I'm not really qualified to deal with your situation, but my thought is that you probably don't need a financial advisor to help you determine what to invest in. The point of lazy portfolios is that they're easy to maintain so why pay someone else a percentage for a couple hours a year of work? I think you may need a CPA or financial advisor to help you pick out and administer retirement vehicles for your situation. I'm positive a lot of the info you'll need to make good choices is on White Coat Investor's site, so I'd read over there to get a knowledge base you can bring with you to any meetings.

Third, realize now to April 15th is the busiest time of year for any CPA so they may be somewhat slow to respond. Good luck!
afan
Posts: 5282
Joined: Sun Jul 25, 2010 4:01 pm

Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by afan »

Unless you have a far more complicated tax situation than you have described so far, you can definitely do your taxes yourself with standard retail software (TurboTax, HRBlock...). Even the most expensive versions are well under $100. The rest of what you are paying for a paid preparer is the convenience of having someone else do the work. You have to decide whether the time saved is worth the cost. Only people with complicated taxes need the expertise of an accountant.

With your educational background you absolutely have the studying and learning capacity to handle every single bit of this yourself. You just have to decide whether you want to, given the other demands on your time. The people on this board do this as a hobby, and probably spend more time on it than necessary because it is fun.

Before looking at a separate financial advisor, sign up with VPAS and see how far they take you. I do not use them (too cheap to pay anything for financial advice). I have used the free consulation offered for flagship customers, which lets you talk to one of their CFP's about specific questions. Their advice has been OK, but hardly sophisticated. I have tried them several times and never learned anything I did not already know.

I asked them about Roth conversions as part of retirement planning and they said that this was tax advice, which they do not offer. They did imply that they did discuss Roth conversion strategies with VPAS clients, but did not come out and say this explicitly. So I did not bite.

All of the above to say that, depending on what else you need, you might find that VPAS does not provide you with all the financial advice you want. If this turns out to be the case, then you can shop for someone who simply provides advice, for an hourly fee. NOT based on the assets under management since they will not be managing your assets.

An accountant who does taxes should certainly be able to advise you about the tax implications of different retirement planning options. Not all will necessarily figure out the optimal approach and walk you through how to execute the plan.

I would point out that on a $100,000 account your entire annual fee will be $300. That is less than many qualified independent planners might charge for one hour of advice and it will take more than an hour simply to collect the information they would need to begin making suggestions.

So go with VPAS for now. If you need more tax or other planning advice you can shop for the right person, depending on what you need.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
Morgan22
Posts: 60
Joined: Thu Oct 29, 2015 12:30 pm

Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by Morgan22 »

It sounds like you or your husband has a sep-ira. And you want to open up a solo 401k to roll the ira into so you can do back door roth's. I could be wrong, but I believe Vanguard does not allow ira roll overs into their individual 401k's. So you may want to look into fidelity, which does allow roll overs. Something to investigate before opening up a bunch of accounts at vanguard.
retiredjg
Posts: 42264
Joined: Thu Jan 10, 2008 12:56 pm

Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by retiredjg »

tyro, I agree with kenner on several points.

First, you need to kick back and forget all this for a day or two. This is not an emergency. Things may have gone poorly in the past, but there is adequate income to save for retirement even if you are starting from scratch. It all seems overwhelming, but if you sort things out one at a time, it gets much simpler.

I think you are right to be considering a simple and probably lazy portfolio. Since you don't know how to do that yet, starting with Vanguard's PAS is a good choice. That is because you can use them as "training wheels" for a few years and then move on to do it yourself management if you want.

I don't know of any other company that makes it quite this simple. If you use another custodian, your portfolio will probably be more complex, you may not understand it, and you may not be able to keep the funds they have you in if you want to DIY. There could be a tax cost to changing your portfolio. Vanguard's set up is somewhat unique in this at this point.

Be aware, however, that Vanguard is simply overwhelmed with new customers and their customer service has gotten slow and sometimes frustrating. I think it would be worth it in your situation to just be patient if you run into this.

There seems to be a basic difference in how you and your DH approach money and investing. If he is comfortable with this accounting firm, I doubt you will be able to (or should) pry him away from it. Do not get involved with their "advisor" suggestion. It may not be possible to prevent your DH from making that choice though.

Regarding the questions I asked in your other thread, if DH is willing to use Vanguard too, you will need to get all that figured out before you present your financial information to Vanguard's CFP. So go ahead and start working on that (after you get your brain out of panic mode). If for now you plan to use VPAS and he doesn't, get your part figured out.

Regarding the "back door"....I would not do any Roth conversions (for you or DH) just yet. When you get your information together, post that and let us help you decide if you can/should go ahead and do the Roth conversions. From what I think I've read, you are probably good to go. Your DH is definitely NOT good to go - both the 401k rollover and the SEP IRA situations have to be figured out and handled first.

Know that most accountants have never heard of the "back door" and will not know how to advise you or do the paperwork involved. So do not be critical of his accountant person if she seems clueless. Also realize if you plan to file married jointly and if he insists on his old accountant, you might do better to just skip the back door all-together. Depending on when the non-deductible contributions to IRA occurred, you might consider just having your contribution "returned" (made as if it never happened).
Topic Author
tyro
Posts: 80
Joined: Wed Feb 01, 2017 2:01 pm
Location: New York

Re: Should I still get a Fin Advisor if I only want a lazy portfolio?

Post by tyro »

retiredjg wrote:tyro, I agree with kenner on several points.

First, you need to kick back and forget all this for a day or two. This is not an emergency. Things may have gone poorly in the past, but there is adequate income to save for retirement even if you are starting from scratch. It all seems overwhelming, but if you sort things out one at a time, it gets much simpler.Yes. My husband got fired in 2015 and 2016 and can't get another job so is consulting now and I am panicking a bit because I don't think a solid income from him is something I should plan on.

I think you are right to be considering a simple and probably lazy portfolio. Since you don't know how to do that yet, starting with Vanguard's PAS is a good choice. That is because you can use them as "training wheels" for a few years and then move on to do it yourself management if you want. Got it.

I don't know of any other company that makes it quite this simple. If you use another custodian, your portfolio will probably be more complex, you may not understand it, and you may not be able to keep the funds they have you in if you want to DIY. There could be a tax cost to changing your portfolio. Vanguard's set up is somewhat unique in this at this point. Yes. I want everything there.

Be aware, however, that Vanguard is simply overwhelmed with new customers and their customer service has gotten slow and sometimes frustrating. I think it would be worth it in your situation to just be patient if you run into this.Thanks. Next convenient PAS appointments are in March. That is ok. Money for me is partly for peace of mine and I trust them to will get more Utiles from that.

There seems to be a basic difference in how you and your DH approach money and investing. If he is comfortable with this accounting firm, I doubt you will be able to (or should) pry him away from it. Do not get involved with their "advisor" suggestion. It may not be possible to prevent your DH from making that choice though.Good advice on accountant. On FA, DH is not interested as he is "not a stock market or retirement fund guy" and I gave him reading material on Jack Bogle and Vanguard and he is on board.

Regarding the questions I asked in your other thread, if DH is willing to use Vanguard too, you will need to get all that figured out before you present your financial information to Vanguard's CFP. So go ahead and start working on that (after you get your brain out of panic mode). If for now you plan to use VPAS and he doesn't, get your part figured out. His will go too and most importantly we will be maxing out 5.5 x 2 tIRA, starting a 403b for me with 18k (increasing hours) and starting a solo 401k for him. I filled the questionnaire from VPAS out and will have appointment with them mid-March. In general it is good for him to think of the future in a more concrete way as he has a real problem with that. Even simple stuff like I am happy to retire in a cheap condo in FL but he really wants to stay here (ny). Also, he assumed we will have plenty enough money to help our son start out and buy an apartment while we can't even afford the same private college dh went to and keeps throwing charity money at (10k/yr.)

Regarding the "back door"....I would not do any Roth conversions (for you or DH) just yet. When you get your information together, post that and let us help you decide if you can/should go ahead and do the Roth conversions. From what I think I've read, you are probably good to go. Your DH is definitely NOT good to go - both the 401k rollover and the SEP IRA situations have to be figured out and handled first.Ok. Going to relax. VPAS can tell me and I will ask in March wen I get farther along.

Know that most accountants have never heard of the "back door" and will not know how to advise you or do the paperwork involved. So do not be critical of his accountant person if she seems clueless. OK.Also realize if you plan to file married jointly and if he insists on his old accountant, you might do better to just skip the back door all-together. OK. Depending on when the non-deductible contributions to IRA occurred, you might consider just having your contribution "returned" (made as if it never happened).
Thank you so much for all of this information jg. I am feeling so much better!
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