Just downsized at age 60...input appreciated

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shavenyak
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Just downsized at age 60...input appreciated

Post by shavenyak » Sun Dec 03, 2017 1:15 pm

Retiring came a year earlier than planned. Just found this tremendous site. Question from an unsophisticate: My brother is strongly recommending that my wife (age 54) and I pay 1% annually to a financial adviser to manage our $2 million nest egg of taxable investments and provide addl services (e.g., devise a comprehensive financial/estate plan). I don't see us having any need for those kinds of add-on services. As for investing, am I naive to think that I could just go to, e.g., Vanguard and choose an inexpensive allocation of about 65% U.S. and some intl stocks and 35% bonds that would sufficiently protect our nest egg through downward market swings?

My brother emphasizes that the adviser and his large organization and network could save our nest egg from big down market downturns by the firm's tactics and experience while having us diversified into a pie chart with many pieces composed of all types of U.S./intl developed and emerging stocks, a range of bonds, REITS, and goal tending/protective tactics.

Unless a retiree adviser has a 10-year track record averaging about 10% performance (that comes from 8%? market averages plus an addl factor for fees), no one should consider becoming a client, right?

Specific recommendations would be much appreciated. Motivated to educate myself, but need some leads to consider now. TIA.

Doug

Dottie57
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Re: Just downsized at age 60...input appreciated

Post by Dottie57 » Sun Dec 03, 2017 2:31 pm

You are correct. Use the three / four fund portfolio in percentages you are comfortable with.

No advisor knows the future with precision. DIY.

You would end up paying 20k per year for advisor's AUM fee.

Doom&Gloom
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Re: Just downsized at age 60...input appreciated

Post by Doom&Gloom » Sun Dec 03, 2017 2:58 pm

It sounds like you are on the right track of what to do with your finances. Good luck!

snowox
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Re: Just downsized at age 60...input appreciated

Post by snowox » Sun Dec 03, 2017 3:21 pm

your doing fine! and you could use a Vanguard Advisor for .30% if you wanted to ,to accomplish what you wish. Thats what i did when I retired just to get things lined up.

msj16
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Re: Just downsized at age 60...input appreciated

Post by msj16 » Sun Dec 03, 2017 3:27 pm

I am sure that the advisor won't "guarantee" saving the nest egg from downturns. In reality you do better off over the long term by saving on the advisor's fees.

edge
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Re: Just downsized at age 60...input appreciated

Post by edge » Sun Dec 03, 2017 3:27 pm

You may want to be slightly more conservative.

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FrugalInvestor
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Re: Just downsized at age 60...input appreciated

Post by FrugalInvestor » Sun Dec 03, 2017 3:46 pm

shavenyak wrote:
Sun Dec 03, 2017 1:15 pm
My brother emphasizes that the adviser and his large organization and network could save our nest egg from big down market downturns by the firm's tactics and experience while having us diversified into a pie chart with many pieces composed of all types of U.S./intl developed and emerging stocks, a range of bonds, REITS, and goal tending/protective tactics.
Your brother is correct that the investment firm will likely "divide your portfolio into many pieces," so many, in fact, that you'll likely not understand it. That's the idea, to make what they've done look so complicated that you are convinced you could not possibly handle it yourself. The problem is that any outperformance (very unlikely over time) as you suspect will almost always be eaten up by expenses, trading costs and taxes.

Your idea of a simple portfolio of diversified funds will almost assuredly perform better net of expenses and be less risky, more understandable, easier to manage and much more tax efficient. Search here for 3-fund portfolio and you'll have a good idea of how to get this done.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

mptfan
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Re: Just downsized at age 60...input appreciated

Post by mptfan » Sun Dec 03, 2017 3:49 pm

shavenyak wrote:
Sun Dec 03, 2017 1:15 pm
As for investing, am I naive to think that I could just go to, e.g., Vanguard and choose an inexpensive allocation of about 65% U.S. and some intl stocks and 35% bonds that would sufficiently protect our nest egg through downward market swings?
No, you are not naive, you are doing the right thing. I don't agree with the word "protect" in your sentence, but I think you are doing the right thing by avoiding an advisor.
I eat risk for breakfast. :)

skwak
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Re: Just downsized at age 60...input appreciated

Post by skwak » Sun Dec 03, 2017 4:07 pm

I do not believe that a Financial Advisor is any better suited to "protect" you from a significant market correction then you are suited protecting yourself. When the market corrects, your portfolio will likely correct as well. You obviously have done some solid work to date to get to $2M. Congrats!

I use an advisor for a portion (not all) of my retirement portfolio. There are some advantages. I ask detailed financial questions and get some pretty sound perspective back in great detail. I find this helpful and I hope to use this service greatly in 6+ years when we semi-retire and start to unravel our portfolio into annual income.

One solution that might give you the best of both worlds would be to take a portion of your portfolio and have it managed through a trusted advisor. That way you can leverage his knowledge and yet do so with only a portion of your money under management ($$). The challenge is finding someone you trust who is knowledgeable.

Jack FFR1846
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Re: Just downsized at age 60...input appreciated

Post by Jack FFR1846 » Sun Dec 03, 2017 4:16 pm

Your brother is wrong. All an adviser will do is take $20k for his fee, put you into high priced funds, costing you another $30k and make sure you can't get out of your portfolio easily with non-tradeable REITs and the like. My portfolio is about $2M as well and I'm 60. I'm in a 3 fund at 50/50 and my total cost including all fees and ERs is under $800 per year. Investing isn't hard.
Bogle: Smart Beta is stupid

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whodidntante
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Re: Just downsized at age 60...input appreciated

Post by whodidntante » Sun Dec 03, 2017 4:17 pm

Anyone who can successfully market time does not need to earn 1% on your money.

Gill
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Re: Just downsized at age 60...input appreciated

Post by Gill » Sun Dec 03, 2017 4:18 pm

skwak wrote:
Sun Dec 03, 2017 4:07 pm
One solution that might give you the best of both worlds would be to take a portion of your portfolio and have it managed through a trusted advisor. That way you can leverage his knowledge and yet do so with only a portion of your money under management ($$). The challenge is finding someone you trust who is knowledgeable.
Most would consider it rather unethical to give an advisor part of your portfolio and then mirror it on your own. Also, unless the advisor knows your total picture the advice he gives would be somewhat lacking.
Gill

remomnyc
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Re: Just downsized at age 60...input appreciated

Post by remomnyc » Sun Dec 03, 2017 4:36 pm

I don't think you need you pay anyone 1% to manage your account, but you may find value in a fee only financial planner to go over investment allocation, taxes, insurance, social security, withdrawal strategy, etc. It should be a fixed fee one-time only charge. If you are willing and able, you can just start reading the wiki here and educate yourself.

capgain22
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Re: Just downsized at age 60...input appreciated

Post by capgain22 » Sun Dec 03, 2017 4:40 pm

My most Humble response.
I'm 65 and have been reading investment literature and studying since age 30. Have made most of the common Stupid mistakes.

Awhile back I looked to find and "investment adviser" as I believe in paying for expert advice. However (again in all Humility) most everyone I interviewed has less total accumulated knowledge than I do. ALMOST ALL have something to sell.

I ultimately decided that paying even 1/2 point on my total portfolio was simply not worth it.
Stick to Bogleheads simplicity plan. And read, read, read,................
It's fun. And can be rewarding.

Just don't take too much risk at your stage of the game.

I might not give the same input to someone aged 30 though, as far as getting professional advice.......

delamer
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Re: Just downsized at age 60...input appreciated

Post by delamer » Sun Dec 03, 2017 4:55 pm

In addition to the 1% fee, an advisor is likely to put you in mutual funds that have high expense ratios themselves. So instead of an index fund with an ER of 0.05%, you'll end up in a similar fund that costs 1.2% (on top of the advisor's fee).

You can tell your brother that in the 2007 crash, my retired in-laws' account managed by an advisor lost 50% of its value. My spouse and my retirement savings, which I manage, lost 35% of their value. And our account was more stock heavy than my in-laws'.

So much for downside protection.

Here's a link to some books that are recommended to get an understanding of the Boglehead way: https://www.bogleheads.org/RecommendedReading.php

There is also a wiki on the site that gives recommendations for portfolios.

Someone already mentioned the Vanguard Personal Advisor Services. They can provide assistance at a much cheaper price (0.3%) and will take care of moving your assets to Vanguard too. And you'll be in very inexpensive Vanguard index funds.

chw
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Re: Just downsized at age 60...input appreciated

Post by chw » Sun Dec 03, 2017 5:14 pm

Dottie57 wrote:
Sun Dec 03, 2017 2:31 pm
You are correct. Use the three / four fund portfolio in percentages you are comfortable with.

No advisor knows the future with precision. DIY.

You would end up paying 20k per year for advisor's AUM fee.
This... With due respect to your brother, unless you feel overwhelmed trying to DIY, all of the resources you need are here on the wiki. No advisor knows the future. If you feel overwhelmed DIY, Vanguard offers a discounted advisory service, which you could perhaps utilize for 1 year to get your financial life in order with some guidance, and then go DIY.

I went thru the last market cycle with an Advisor peddling "tacticle" investments to lessen market downturn risk- guess what- his performance with our portfolio was more or less the same as the market. What will help to determine your future returns in relation to the market is the overall stock/bond allocation you choose.

Read some of the books mentioned on the wiki to educated yourself. One recent book I read recently- How to Make Your Money Last (Jane Bryant Quinn), is very good, and covers most topics needed by the pre-retiree/retiree.

Best wishes

PS- As you make updates to your portfolio, pay attention to possible tax consequences of selling in your taxable account due to appreciated assets you may own.

Audiophile
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Re: Just downsized at age 60...input appreciated

Post by Audiophile » Sun Dec 03, 2017 5:58 pm

My wife and I were in your similar position approximately 7-years ago. I had managed our portfolios throughout our working careers. However, because it was so close to our pending retirements, the 2008 downturn caused an emotional reaction in me that I had never experienced before then.

Thus, I started questioning my decisions thinking that a Planner may help. After doing research and finding the Bogleheads site, low fee Index Funds became a far too logical decision to overlook and ultimately became my chosen course of action!

The rule-of-thumb 4% yearly withdrawal amount in retirement is one that is very debatable. What’s not debatable is that a 1% Planner’s fee is considerable when compared to what you may withdraw on a yearly basis. Additionally, the Planner will probably put you into managed funds that will skim another amount close to 1% (or more) in loads and management fees. I questioned why I would want to be 1-2% in the hole when starting each and every year with a Financial Planner? This coupled with the fact that only: “Roughly 1 in 20 actively managed domestic funds beat index funds”; (https://www.marketwatch.com/story/why-w ... 2017-04-24), I then wondered if ONLY 1 in 20 of the big-boy Wall Street active fund managers beat the market index (& IF that 1 manager does so this year, he may not next year), what are the odds that Joe-The-Local-Financial Planner will do better than the big-boy’s!?! Yeah, I don’t know the answer, nor do I know how to find it, but the odds must be incredibly low and that’s exactly the problem! As another poster said: “Anyone who can successfully market time does not need to earn 1% on your money”!

bsteiner
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Re: Just downsized at age 60...input appreciated

Post by bsteiner » Sun Dec 03, 2017 6:12 pm

... My brother is strongly recommending that my wife (age 54) and I pay 1% annually to a financial adviser to manage our $2 million nest egg of taxable investments and provide addl services (e.g., devise a comprehensive financial/estate plan).
...
[/quote]

You and others have already solved the investments.

The lawyer who handles your estate planning will help you develop your estate plan and draft the necessary documents for far less than 1% of $2 million, payable only once (until your situation or the tax law changes in such a way that you need to review it and possibly update it), not every year.

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CyclingDuo
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Re: Just downsized at age 60...input appreciated

Post by CyclingDuo » Sun Dec 03, 2017 6:25 pm

shavenyak wrote:
Sun Dec 03, 2017 1:15 pm
Retiring came a year earlier than planned. Just found this tremendous site. Question from an unsophisticate: My brother is strongly recommending that my wife (age 54) and I pay 1% annually to a financial adviser to manage our $2 million nest egg of taxable investments and provide addl services (e.g., devise a comprehensive financial/estate plan). I don't see us having any need for those kinds of add-on services. As for investing, am I naive to think that I could just go to, e.g., Vanguard and choose an inexpensive allocation of about 65% U.S. and some intl stocks and 35% bonds that would sufficiently protect our nest egg through downward market swings?

My brother emphasizes that the adviser and his large organization and network could save our nest egg from big down market downturns by the firm's tactics and experience while having us diversified into a pie chart with many pieces composed of all types of U.S./intl developed and emerging stocks, a range of bonds, REITS, and goal tending/protective tactics.

Unless a retiree adviser has a 10-year track record averaging about 10% performance (that comes from 8%? market averages plus an addl factor for fees), no one should consider becoming a client, right?

Specific recommendations would be much appreciated. Motivated to educate myself, but need some leads to consider now. TIA.

Doug
Doug,

Think of it this way. You can park your own car, or you can pay somebody to park it for you. Either way, the car gets parked.

The estate planning is probably rather straight forward at this point. Simple choose beneficiaries for all of your accounts.

It wouldn't hurt to go through a consult with a Financial Advisor or two or three just so you can see what they would all do with your portfolio. During the first meeting - which is free of charge - they will meet with you and ask about your goals, ask about your risk tolerance, ask for copies of your portfolio, your bank account statement, your SS statements, etc... as they act really attentive and concerned with meeting your needs. They will plant seeds of why they are so crucial to their clients on this first meeting. They will make an appointment for you to come back in a 2 to a few weeks later time frame where they will have prepared a "well thought out plan" for you.

On the second appointment - which is also free of charge - they will have printed out some fancy booklet for you with all of the pie charts, scenarios including having run some Monte Carlo simulations, suggestions on where they will be moving your money, show you the list of funds and what the ER fees are for the funds. They might even use media with a projector on a screen or wall to highlight what they can do for you. The sales pitch will be dripping with sweet beckoning honey as to why this individual plan they have developed for you will lead you to the promised land, and into the sunset through your retirement. Blah, blah, blah, blah, and on and on. At which point, you take your prepared booklet home with you, get all of your financial statements back in your possession, and inform them you need some time to think about it all and that you have another firm or two that you want to have an initial consultation with. Shake hands, thank them for the detailed attention - and go find your car. You know, the one you parked yourself. :mrgreen:

You really should - in our opinion - experience this from two or three Financial Advisors. It will let you know what is out there, and how they are making their money through the ER fees, and AUM fee. In reality, you can pretty much do the same exercise yourself online to compare. My wife and I asked a very similar question as you nearly a year ago. We went through the meetings with Fidelity, TIAA, a local AUM firm that specializes in DFA Funds, and the presentation from Personal Capital. It's eerily similar how they all stick to a very similar asset allocation format and recommend the same mix of diversification (domestic, international, emerging markets, value, small cap, large cap, fixed income this, fixed income that - all using funds/investments that they recommend of which all of them are north of 1% in ER fees. The exercise of going through their presentations, in and of itself, is well worth it in our opinion to come to the conclusion that there is very little difference and the reality that you would be losing at least 1% in AUM fees (that's $20K a year) alone. Add in the expense ratio fees of the funds on top of that, no matter if it all goes up or down, and you could be in for handing over $40K a year to this firm. Year in and year out. 5 years X $40K = $200K in just 5 years. :annoyed

What this means is that this Financial Advisor and their pie charts, and suggested mutual funds would have to outperform the market so much, every year, just to equal the return of what the market already provides if you were in index funds. History shows that few, very few can do that. So why not save the money, and just get the return of the market?

The simple three fund portfolio of Vanguard's Total Stock Market, Total Int. Market, and Total US Bond will beat 80% of money managers (mutual funds), and the cost is low - as in around .07%. The Wiki page shows you can mimic this at Fidelity, Schwab, TIAA, etc... using similar funds/ETF's. https://www.bogleheads.org/wiki/Three-fund_portfolio

This website is filled with people who came here asking for advice with their $2M portfolios under management from a Financial Advisor who was charging them 1%, plus the additional fees for the underlying funds. Some of the more unfriendly AUM's that get chastised by all include Ameriprise and Edward Jones.

Your brother was suggesting what he felt perhaps worked well for him, but if you can park your own car - why pay for somebody else to do it? :moneybag :moneybag

BH is filled with lots of us who have $2M+ portfolios that do not use FA's or use AUM fees. Plenty of things for you to read, and get up to speed so you can DIY. And there is plenty of time for you to get things set up as you age to account for the estate, or if you are no longer capable of making financial decisions.

All the best, and kudos on your recent retirement (albeit a year earlier than you thought).

skwak
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Re: Just downsized at age 60...input appreciated

Post by skwak » Wed Dec 06, 2017 9:27 pm

Gill wrote:
Sun Dec 03, 2017 4:18 pm
skwak wrote:
Sun Dec 03, 2017 4:07 pm
One solution that might give you the best of both worlds would be to take a portion of your portfolio and have it managed through a trusted advisor. That way you can leverage his knowledge and yet do so with only a portion of your money under management ($$). The challenge is finding someone you trust who is knowledgeable.
Most would consider it rather unethical to give an advisor part of your portfolio and then mirror it on your own. Also, unless the advisor knows your total picture the advice he gives would be somewhat lacking.
Gill
Gill, just to be clear, that is not what I was saying at all. I was not suggesting anything unethical. I have an advisor who manages a portion of my portfolio. They know it is a portion of my portfolio and not the entire portfolio so we have full transparency. This portion of my portfolio is actively managed. The balance of my portfolio is a mix of index funds, actively managed mutual funds and some individual stocks. These all balance each other in a complimentary way.

What I do get by having an advisor is someone that I can speak with regarding asset allocation, eventual draw down strategies, etc. This might not completely minimize my costs but it does provide some balance which I find adds value.

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Sandtrap
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Re: Just downsized at age 60...input appreciated

Post by Sandtrap » Wed Dec 06, 2017 9:44 pm

Welcome :D
1
Peruse, read, study the links below. Get the Book List and go to "school".
2
Work on your IPS with the new knowledge and understanding.
3
Post your portfolio and get an expert review(s) and help with reaching your goals.
4
Repeat, rinse, repeat. . .
5
If you can do the above you will know precisely how to pick a financial advisor that is right for you. . . and whether you really need one.
You will know if Vanguard VPAS services is right for you or whether you want to do it yourself. VPAS can also be an excellent "training wheel" that you can discontinue at any time. No contracts. Very small fee.
You will also be able to fully discern everything your brother is telling you and whether it is right for "you".
6
I suggest you "do nothing" for now. Take as break, congratulate yourself on your accomplishments.
Then proceed to #1.

j :D

Some helpful links:

Asking Portfolio Questions

https://www.bogleheads.org/forum/viewt ... =1&t=6212
Bogle Philosophy
https://www.bogleheads.org/wiki/Bogleh ... hilosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
Define General Investment Goals and Objectives
https://www.bogleheads.org/wiki/Invest ... statement
Outline of Investing
https://www.bogleheads.org/wiki/Outline_of_investing
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
What the experts say about investing
https://www.bogleheads.org/wiki/What_ ... investing

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tennisplyr
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Re: Just downsized at age 60...input appreciated

Post by tennisplyr » Thu Dec 07, 2017 8:33 am

Unless the thought of doing it on your own causes you to have sleepless nights, IMHO, do it on your own. Absorbing advice from this site is all you need.
Those who move forward with a happy spirit will find that things always work out.

Bacchus01
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Re: Just downsized at age 60...input appreciated

Post by Bacchus01 » Thu Dec 07, 2017 8:34 am

The advice is Herr. It is better than just about any FA you will ever meet.

Read the wiki. Every page. Take your time. Then lay out a plan. Then execute. Any of the recommended two, three, or X fund portfolios will work and are easy to manage with low fees.

What you likely could use, however, is a tax advisor. Minimizing taxes, maximizing ACA benefit, etc is worth almost as much as your returns at that portfolio level

likegarden
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Re: Just downsized at age 60...input appreciated

Post by likegarden » Thu Dec 07, 2017 8:58 am

12 years ago when I simplified our investments from 401k, IRAs and stocks people in my monthly lunch group gave the right advice : index funds, Bogle and Vanguard. Then I started reading. In 1965 Vanguard had free initial financial advice and planning with setting up the first portfolio and helped me to bring financial assets to them. From my experience you are doing well questioning going to a financial adviser as your brother suggests. Perhaps that Vanguard PAS service for 0.3% for the initial part would be useful for you.

JFP_SF
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Re: Just downsized at age 60...input appreciated

Post by JFP_SF » Thu Dec 07, 2017 9:02 am

skwak wrote:
Wed Dec 06, 2017 9:27 pm
Gill wrote:
Sun Dec 03, 2017 4:18 pm
skwak wrote:
Sun Dec 03, 2017 4:07 pm
One solution that might give you the best of both worlds would be to take a portion of your portfolio and have it managed through a trusted advisor. That way you can leverage his knowledge and yet do so with only a portion of your money under management ($$). The challenge is finding someone you trust who is knowledgeable.
Most would consider it rather unethical to give an advisor part of your portfolio and then mirror it on your own. Also, unless the advisor knows your total picture the advice he gives would be somewhat lacking.
Gill
Gill, just to be clear, that is not what I was saying at all. I was not suggesting anything unethical. I have an advisor who manages a portion of my portfolio. They know it is a portion of my portfolio and not the entire portfolio so we have full transparency. This portion of my portfolio is actively managed. The balance of my portfolio is a mix of index funds, actively managed mutual funds and some individual stocks. These all balance each other in a complimentary way.

What I do get by having an advisor is someone that I can speak with regarding asset allocation, eventual draw down strategies, etc. This might not completely minimize my costs but it does provide some balance which I find adds value.
I do exactly the same thing for the same reasons. I see nothing unethical in it at all.

azanon
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Re: Just downsized at age 60...input appreciated

Post by azanon » Thu Dec 07, 2017 9:05 am

If you want to meet your brother "in the middle", show him Vanguard Managed Payout fund and ask him if that's fancy enough for him (with the commodities, absolute return, etc). It's also close to your intended allocation. Then you can pay no adviser fee, probably a whole lot less for the investments themselves, and also have a fairly decent 4% withdrawal rate automatic system built in. Is the fund perfect? No. But it's keeping fairly decent pace with a comparable choice such as Vanguard Moderate Lifestrategy. The total operating cost of the fund is only slightly more expensive than Vanguard Personal Advisory Services, so from that perspective, it'd be like you're getting the funds themselves for free.

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WoodSpinner
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Re: Just downsized at age 60...input appreciated

Post by WoodSpinner » Thu Dec 07, 2017 10:25 am

OP,

I started 2017 without much of a clue on how to setup investments my and plan for retirement. I had a similar nest egg but used newsletters and an FA to guide my me. When I decided to retire this year, I started a learning process. At first, I just wanted to make sure I understood the decisions and trade-offs Later, I became more convinced of the direction I wanted to go and started driving the ship. Eventually, my FA and I parted ways on very good terms.

Personally, I found there to be a great deal more to plan for in retirement than an Asset Allocation in a portfolio. You might find this post of some use.

I am now a few days away from retirement but I understand my plan, the portfolio decisions, and the tools and resources I need to help guide the ship. This is a pretty amazing forum!

Going DIY takes work and discipline and I think you will find this board a great place to ask questions and take advantage of a broad range of experiences and insights.

It’s goung to be an interesting journey!

Good luck!

WoodSpinner :sharebeer

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greg24
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Re: Just downsized at age 60...input appreciated

Post by greg24 » Thu Dec 07, 2017 10:51 am

You can and should do it yourself.

Does your brother have a relationship with this advisor?

Da5id
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Re: Just downsized at age 60...input appreciated

Post by Da5id » Thu Dec 07, 2017 11:09 am

shavenyak wrote:
Sun Dec 03, 2017 1:15 pm
Retiring came a year earlier than planned. Just found this tremendous site. Question from an unsophisticate: My brother is strongly recommending that my wife (age 54) and I pay 1% annually to a financial adviser to manage our $2 million nest egg of taxable investments and provide addl services (e.g., devise a comprehensive financial/estate plan). I don't see us having any need for those kinds of add-on services. As for investing, am I naive to think that I could just go to, e.g., Vanguard and choose an inexpensive allocation of about 65% U.S. and some intl stocks and 35% bonds that would sufficiently protect our nest egg through downward market swings?
I'm not a fan of advisers, but they may be right for you. Hard to say. The expensive adviser with 1% AUM fee is presumably not the right one for you. A few consultations with a good fee only financial planner to work out a plan (emphasis on good and on the fee only)? Sure. Vanguard PAS if you feel the need to have ongoing advice/handholding? Also fine. Some people want somebody to talk things over with, to help them stay the course, to keep them from panicking when the market tanks. If that is you, you should just try and get those services at a reasonable cost. You can also start with PAS and drop it if you feel like it doesn't add value. With 2 million at Vanguard you can also get some types of advice for no charge (Flagship services).

But if you are comfortable going it alone and you (and your wife!) won't feel too stressed out by doing so, sounds good to me. Certainly I go it alone. As to your 65% stocks, hard to say if that is the right balance for your needs and risk tolerance. Certainly it is in the mainstream of where bogleheads would select. It is about what Vanguard would pick for your wife (age based retirement 2025). It is a bit more aggressive than Vanguard would pick for you (age based retirement 2020).

Seems like you need to figure out your expenses and figure out if that allocation is likely to get you there. You have a ways to go to get on medicare, and your wife has longer, so there are some large health care costs coming your way.

Rus In Urbe
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Joined: Sat Dec 09, 2017 2:12 pm

Re: Just downsized at age 60...input appreciated

Post by Rus In Urbe » Sat Dec 09, 2017 3:02 pm

I just joined the Forum after lurking for many years, and this is my first post---so hello, fellow Bogleheads.

Dear Downsized: Your brother is probably trying to protect you and is passing on the Conventional Wisdom that Wall Streeters have made a fine living on. Your gut instinct is right though----$20k a year will neither protect you from market downturns, nor is it likely to get you more productive investments. You would do better to learn about it yourself and go with low-cost indexes, re-balancing at regular intervals.

I've spent a couple of decades reading every investment/economic book I could lay my hands on (because I enjoy it), and most recently I ran across this one that I highly, highly recommend: "Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School by Andrew Hallam." It's funny, accurate, informative and one of the very best introductions to DIY investing on my bookshelf. I was probably attracted to it because I'm an about-to-retire college professor, but it really is for anyone who wants a one-volume introduction to how to think about personal investing.

One of the most memorable chapters is near the end of the book, detailing what arguments "Investment Advisors" will use to try to rope you in as a customer, and the facts you can use to counter these sales tactics. It was absolutely hilarious! I was laughing out loud because he is so accurate. After reading this one book, you will have an excellent grasp on how/why the market works, and how to manage a "couch potato" portfolio (just for instance).

As I waltz toward my own retirement (2 years hence), I am taking some money off the table and created 'ladders' of timed CDs (one comes to maturity every year) that will bridge me five years to my maximum SS date. You might want to look into "laddering CDs" to create guaranteed and stable income during the first few years of retirement, when a market downturn can do you the most long-term damage (and then you can tell your brother, you've got it covered!).

Good luck to you....

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