TylerLearning wrote: ↑
Sun Aug 19, 2018 3:00 pm
Hello, I am adding this to my OP (below).
Following advice from this forum, I've asked my independent FA to help me end our relationship (and my son's with him, too). He had opened a Schwab account, where my money is now. I talked to Vanguard today, having read here that I could just call Vanguard and they'd take care of moving my money and the whole thing. This is far from the truth. Along with much other news--for example that they charge $7 for what Schwab charges $4.95 for--they've sent me back to the FA to handle all this, and to contact a tax accountant. Here, where readers knew a little more about my situation, I was told the tax aspect of my moving to VG isn't really a consideration.
I asked the FA to review my options and this is what he said. I will appreciate anyone's sense of what he wrote, and also what I should do next. See his A, B, and C. I especially don't know how to evaluate the paragraph about the LT gains. Thank you in advance:
A. Closing the Account
Closing the account requires selling all stocks and funds. Schwab will charge about $12.95 for each stock/etf and $25 for each fund. Note that you can lower the cost of selling stocks/etfs to $4.95/trade by signing up for e-signature and e-statements. I estimate commissions would total around $675, but would be reduced to $400 if you were signed up for reduced commissions.
You would also owe taxes on the gains. As of yesterday (subject to market fluctuation), you had LT gains of $2,417, which are subject to a lower tax rate. You also had short-term gains of $9,404, subject to a less favorable ordinary income tax rate. You also have a Treasury that Matures on 9/15/2018. If you sell everything except that Treasury and the short-term securities with gains that go long-term on 9/17/2018, it will reduce your short-term gains to $307 and increase your LT gains to $11,514. Keep in mind these numbers could change with the market ups and downs over the next two weeks.
Charles Schwab may charge a $50 exit fee for closing the account or transferring the account.
B. Transferring the Account
Transferring the account to another broker would incur an $50 exit fee and the assets would remain fully invested. You would need to find another broker/custodian besides Charles Schwab. Most other brokers will charge comparable fees and expenses.
Another option would be for us to “de-link” the account. That would keep the assets invested exactly as they are today and you would interact with Schwab for all investment advice/decisions. There would be no exit fee to de-link the account.
Hello, I’ve been reading here extensively for several months. Of course touched and impressed by everyone.
I recently inherited 1M (final distribution about an hour ago). 62 (longevity in my family). Nearly retired (means working freelance less). No family except son, 23 (lives abroad). No debt, car, cellphone, or TV. Paid off my house. Savings: high. Live in California.
I need to move forward from an essentially cash-and-savings life. In a chaotic period of grief for my parent, a family friend set me up with a “financial advisor.” Since last year, my $700,000 has earned just under $9000 and, AUM-ing me at .75%, I’ve paid him nearly the same. I so much want to extricate myself from him, but… how? It sounds tricky. And what to do next? I can barely make heads or tails of my statement (Schwab).
I’ve gotten increasingly concerned about making my own decisions, reading here about loads, exit and hidden fees, bonuses, tax implications, ERs, ladders, AAs, target dates and endless considerations that I won’t know to consider.
In my life I've handled complex financial situations (two low- and no-overhead businesses; changing countries) but know nothing about caring for this new sum or what's next: investing—but also trust, will, taxes, life and death insurance, and so on. Other information:
What I have
1. In the high 200,000s/low 300,000s: Chase account, earning pennies (hiding from advisor)
2. $1800: Bank of America checking for bills, with credit card, earning pennies.
3. The Schwab-advisor account (see above).
4. I qualify for Medi-Cal health insurance, and free tax preparation.
Now I’m living from freelance earnings + savings—about $25,00/year
What I expect
No retirement accounts or pensions.
Freelance income as long as I’m able: $6-10,000
Will qualify for Medicare.
About $1060 at 66-1/2 from Social Security.
Hopes, wild and other
1. To live off interest and dividends from investment.
2. To be a little freer with money than I’ve been for a long time.
3. To have an occasional housecleaner and a monthly gardener.
4. To repair and upgrade the house: $20-30,000?
5. To be able to do something(s) a bit big: take a trip where I’m not squirreling leftovers in the hotel mini-fridge? Buy a good painting? Buy a little room (pied à terre) in another country?
6. To leave my principal (most?) and house to my son.
Note 1. If I lose the money, there’s no more where that came from.
Note 2. I saw how the “home care” people sucked six figures from my parent (98 years old) in the last year or less—> don’t-want-to-be-a-burden-to-my-son.
Thank you in advance to anyone with advice about how to maximize what I have. A three-fund portfolio? Vanguard advisor? Schwab advisor?No advisor? CDs? FIDC everything? Hourly financial planner? All new and daunting to me.