Retirement Planning - Lessons Learned

[Carl_NH]

A

I am smart enough to make money, but not smart enough to understand bitcoin.

I am not smart enough to invest....so leave that to Fisher Investments

We've got accounts with Vanguard and my 401K with my employer, and I've been speaking with Fisher and they want me to roll both these accounts over to them - I am 65 and plan to retire in 3 years as I enjoy what I do. Vanguard has returned on average 7.5% over the last 5 years, moderate/conservative with 55/45 stocks/mutual funds, and the 401K is similar 55/45 split returning on average 9-10% - last year was 17% which was the exception.

Bottom line Fisher is claiming with their actively managed approach they can return 10% after fees (1.2%)whereas Vanguard fees are around .4% and the 401K .8%. My wife wants to put everything in Vanguard so we are just investigating options.

What's your history and experience with Fisher? Do they live up to their claims?

 

[rjpotts]

Retire as early as you can, life is short and uncertain. I retired at age 56 and have no regrets, every day is a gift and the years are flying by!

If using a financial advisor ask LOTS of questions and stay away from any advisor who is pushy or makes you uncomfortable.

Also, current stock market valuations are very high, a major correction is imminent. Probably not a good time to be in stocks if you are close to retiring.

 

[Hay Dude]

We've got accounts with Vanguard and my 401K with my employer, and I've been speaking with Fisher and they want me to roll both these accounts over to them - I am 65 and plan to retire in 3 years as I enjoy what I do. Vanguard has returned on average 7.5% over the last 5 years, moderate/conservative with 55/45 stocks/mutual funds, and the 401K is similar 55/45 split returning on average 9-10% - last year was 17% which was the exception.

Bottom line Fisher is claiming with their actively managed approach they can return 10% after fees (1.2%)whereas Vanguard fees are around .4% and the 401K .8%. My wife wants to put everything in Vanguard so we are just investigating options.

What's your history and experience with Fisher? Do they live up to their claims?

Im pretty heavy into Vanguard (just got a statement today) and I think they are excellent. Its about an 75/25 stocks/bonds mix. Very satisfied customer

 

[ultrarunner]

Coming from a father and grandparents that lived through the Depression it was made very real to me at a young age when Grandma would point out all the neighbors by name and profession that lost their homes in the 1930's...

She was a cash and carry person... each market day started at the bank and everything was paid for in cash... thought credit was the path to ruin to her last breath.

That said she did have a modest mortgage and paid it off ahead of schedule... her outlook was you need a place to live so a mortgage done right would set you up at the end of the day compared to paying rent...

Guess I was one of those exceptions... being around a lot of older people the common theme was Real Estate... my horizon often was the time frame of owning free and clear...

That why I bought my first fixer at 22 and still have it today... condemnation hearing already scheduled but was able to make the deal and in 10 days the place was safe... amazing how a 30 yard dumpster, cutting back the overgrowth, some new window glass and paint can change things...

 

[Jstpssng]

The now is most in their 30s are just trying to find stable employment. The now also means those without jobs just raided their 401ks just to get by.

I think you are trying to apply your strategy and tactics to a world that does not conform to those anymore.

IMHO, those over 60 have rosier outlook
on how they approached investing and are taking that approach to a market that is vastly different.

We can say the same about jobs. 40 years ago one local shop was hiring people with no experience and training them to be welders. Now the same work is out sourced or/and done by robots. How many companies have been bout out, downsized, with pensions "raided" in the last 30 years, leaving people who had worked only one job all of their lives out of work with no skills or retirement plans. My BIL had a potato chip route with a national company for years. He's one who is always talking about how hard he worked to get ahead, yet doesn't understand that those opportunities are a lot harder to come by now.
He also overlooks that they were able to offer him early retirement because his replacement won't be making the money or receive the same benefits which he does.

 

[JethroB]

We've got accounts with Vanguard and my 401K with my employer, and I've been speaking with Fisher and they want me to roll both these accounts over to them - I am 65 and plan to retire in 3 years as I enjoy what I do. Vanguard has returned on average 7.5% over the last 5 years, moderate/conservative with 55/45 stocks/mutual funds, and the 401K is similar 55/45 split returning on average 9-10% - last year was 17% which was the exception.

Bottom line Fisher is claiming with their actively managed approach they can return 10% after fees (1.2%)whereas Vanguard fees are around .4% and the 401K .8%. My wife wants to put everything in Vanguard so we are just investigating options.

What's your history and experience with Fisher? Do they live up to their claims?

I have no knowledge of Fisher but I highly recommend Vanguards strategy (long term, diversification, & low cost funds) and advisory service. I went through this decision about 5 years ago. One active management boutique firm wanted 3% of portfolio annually. No way! If you can move or rollover the 401k into an IRA at Vanguard your total account balance could qualify for a lower % fee. I have had the same Vanguard advisor for 5 years. We talk quarterly for about half an hour or more often if needed. I rely on them to minimize the tax bite and generally protect me from myself.

 

[JethroB]

Retire as early as you can, life is short and uncertain. I retired at age 56 and have no regrets, every day is a gift and the years are flying by!

If using a financial advisor ask LOTS of questions and stay away from any advisor who is pushy or makes you uncomfortable.

Also, current stock market valuations are very high, a major correction is imminent. Probably not a good time to be in stocks if you are close to retiring.

Also any advisor should be a fiduciary. They're legally required to act in their clients' best interests when offering investment advice and managing portfolios. A broker is not necessarily a fiduciary.

 

[goeduck]

I have no knowledge of Fisher but I highly recommend Vanguards strategy (long term, diversification, & low cost funds) and advisory service. I went through this decision about 5 years ago. One active management boutique firm wanted 3% of portfolio annually. No way! If you can move or rollover the 401k into an IRA at Vanguard your total account balance could qualify for a lower % fee. I have had the same Vanguard advisor for 5 years. We talk quarterly for about half an hour or more often if needed. I rely on them to minimize the tax bite and generally protect me from myself.

I do not know anyone that would sign up for 3% unless the advisor was Warren Buffet. 3% of net would be one thing but 3% of assets is $30,000 per million per year. That is a lot. I have my money mostly in Vanguard, Fidelity and T Rowe Price and will consolidate it at some point. How has Vanguard been in ease of distributions, speed, etc.?

 

[goeduck]

Bottom line Fisher is claiming with their actively managed approach they can return 10% after fees (1.2%)whereas Vanguard fees are around .4% and the 401K .8%. My wife wants to put everything in Vanguard so we are just investigating options.

I thought Fishers percentage fee went down as assets went up.

 

[Carl_NH]

I have no knowledge of Fisher but I highly recommend Vanguards strategy (long term, diversification, & low cost funds) and advisory service. I went through this decision about 5 years ago. One active management boutique firm wanted 3% of portfolio annually. No way! If you can move or rollover the 401k into an IRA at Vanguard your total account balance could qualify for a lower % fee. I have had the same Vanguard advisor for 5 years. We talk quarterly for about half an hour or more often if needed. I rely on them to minimize the tax bite and generally protect me from myself.

Jethrob - Thanks yes with Vanguard we do the same quarterly meeting reviewing goals and plans and adjustments, and we are getting good service and advice. We had two accounts - one Vanguard and one Ameriprise, invested the same in each for 5 years, and over that time the fee difference and management netted 25K more in the Vanguard portfolio in same period so we consolidated all into Vanguard.

Maybe when Shooterdon gets back around he can share his experience with Fisher. My first impression of Fisher was a "hard sell" on their approach of "active investing" generating 10% returns with higher fees, vs the blend stock and mutual funds and low fees of Vanguard.

 

[Carl_NH]

I thought Fishers percentage fee went down as assets went up.

Yes, it does, I haven't gotten deep into the details yet - just looking, but Fisher estimated @ $1M investment would be $12K per year or 1.2%, and their starting investment is $500K.

Their pitch is theoretically a $1M investment can provide income of $80-90K annually including fees and not touch the principal.

 

[KennyG]

Relative to investment advisers and actively managed funds:

This has been studied in detail. In any given year, only 10 to 20% of actively managed portfolios will outperform the comparable index funds. This seems to be mostly a matter of luck, because when you look at the 5 to 10 year performance, the number of successful managed funds goes even lower.

I have followed the advice of investment professionals three times in my life, for a limited portion of assets. Each time it's worked out poorly in comparison to my own index investing. As a result, I don't even consider using an advisor. If you know nothing about investing, it may be worthwhile, but make sure you go with an advisor who will put you into low overhead cost investments.

 

[RickB]

I self manage a widely diverse portfolio that is 60/40 equities/fixed income. A couple years ago I spent a lot of time with an Edward R Jones rep to see if I should let an advisor handle the investing. He could not convince me that he could do better after fees than I do myself. Schwab is my brokerage but the funds I own are by no means all Schwab funds.

 

[JethroB]

I would say, for me, Vanguard is more of a manager than actively advising. They basically plug you into their computer model that fits your profile based on your age, goals, risk comfort level, etc. My cost is 0.30%. A little painful but worthwhile to me. Tweaks are done with my approval or request. The advisor will tactfully try to keep me on track.

Withdrawals are online and done via direct deposit to my local bank account. That takes a couple of days. Same day wires are available in an emergency. My advisor keeps the money market spending fund topped up to a balance I chose. If I have a large expense coming up I give the advisor a call.

 

[JethroB]

I do not know anyone that would sign up for 3% unless the advisor was Warren Buffet. 3% of net would be one thing but 3% of assets is $30,000 per million per year. That is a lot. I have my money mostly in Vanguard, Fidelity and T Rowe Price and will consolidate it at some point. How has Vanguard been in ease of distributions, speed, etc.?
View attachment 684840

Yeah, this 3% firm is really catering to multi million dollar clients with complex needs. Or trust fund babies who don't know the value of a dollar. :laughing:

 

[goeduck]

I would say, for me, Vanguard is more of a manager than actively advising. They basically plug you into their computer model that fits your profile based on your age, goals, risk comfort level, etc. My cost is 0.30%. A little painful but worthwhile to me. Tweaks are done with my approval or request. The advisor will tactfully try to keep me on track.

Withdrawals are online and done via direct deposit to my local bank account. That takes a couple of days. Same day wires are available in an emergency. My advisor keeps the money market spending fund topped up to a balance I chose. If I have a large expense coming up I give the advisor a call.

0.3% is not bad, I could live with that.

 

[goeduck]

. We had two accounts - one Vanguard and one Ameriprise, invested the same in each for 5 years, and over that time the fee difference and management netted 25K more in the Vanguard portfolio in same period so we consolidated all into Vanguard.

Besides my T Rowe, Vanguard and Fidelity accounts my wife has an Ameriprise account. I am the least impressed with Ameriprise.

Another factor that I have to think through is a modest pension from my current employer. It was closed in 2014 and can only be cashed out when you leave the company. So I have to decide to take distributions or cash. I am thinking cash but it would depend on a few things. What have others done with private company pensions?

 

[3Ts]

What have others done with private company pensions?

Be careful here. What applies to others may not apply to you, everyone's situation is different, but I'm sure you know that.

My pension had many options. I took a fixed amount for life. No increases for inflation and income stops when I die (wife gets nothing from it). Wife also does not have a pension from her job. So, why this route? First, I retired early (57) and we needed a few extra dollars beyond our savings until I could withdraw from my 401k. This maximized the amount I'd get early on with a reasonable risk. Second, my 401k will provide enough funds for her to continue to live comfortably after I die and she won't need the defined benefit pension funds. So far the 401k has been meeting our goals.

 

[tallyho8]

Coming from a father and grandparents that lived through the Depression it was made very real to me at a young age when Grandma would point out all the neighbors by name and profession that lost their homes in the 1930's...

She was a cash and carry person... each market day started at the bank and everything was paid for in cash... thought credit was the path to ruin to her last breath.

That said she did have a modest mortgage and paid it off ahead of schedule... her outlook was you need a place to live so a mortgage done right would set you up at the end of the day compared to paying rent...

Guess I was one of those exceptions... being around a lot of older people the common theme was Real Estate... my horizon often was the time frame of owning free and clear...

That why I bought my first fixer at 22 and still have it today... condemnation hearing already scheduled but was able to make the deal and in 10 days the place was safe... amazing how a 30 yard dumpster, cutting back the overgrowth, some new window glass and paint can change things...

Your story is very similar to mine. My father taught me that real estate was the way to go as he saw so many people who lost everything in the depression except those who wisely owned real estate. He was very thrifty and told me never to spend money on boats, swimming pools, drugs or fast women. Though real estate is not for everyone. You must have some sense of real estate repairs and buying in areas of growth, not decline.

I bought my first fixer at 28 in 1973 for $15,000 and spent $5000 on repairs doing the work in my spare time. I still have it today though I have sold 3 other properties in recent years as they became headaches after I retired. I paid the first one off in 5 years spending only about $2000 on interest and realty costs. I lived there 3 years and have now rented it out for 45 years. I averaged $8000 a year profit on it (in 2021 dollars) after paying the taxes, insurance and maintenance costs and will probably be selling it in the next few years for at least $199,000. Figuring that $22,000 in 1973 is equivalent to $129,000 today, that's a profit of $70,000 on the sale and $360,000 in rent, total $430,000. The other 3 properties were comparable though I owned them for fewer years.

After interest rates on CDs fell to next to nothing I started doing a little investing in the stock market but only on my own hunches such as my last purchase was Carnival cruise stocks in April @ just under $8 and I sold them in December at almost $24, tripling my investment. I have a few other stocks that have increased in value pretty well but good hunches are few and far between.

I would recommend a young person with skills buying a Duplex fixer-upper in an area of growth and stable politics, for their first home.

 

[Hay Dude]

I do not know anyone that would sign up for 3% unless the advisor was Warren Buffet. 3% of net would be one thing but 3% of assets is $30,000 per million per year. That is a lot. I have my money mostly in Vanguard, Fidelity and T Rowe Price and will consolidate it at some point. How has Vanguard been in ease of distributions, speed, etc.?
View attachment 684840

I have never felt like I waited long for a response by mail. One account has an RMD and the check arrives in 2 days.