<p>OK, we’re about 7 years or so (when our HS sophomore SHOULD graduate from college) from hubby’s retirement (he’s the main breadwinner in the family). He’s been with the federal government & will have a decent defined benefit pension, plus whatever we can save while helping our kids through college. I’m probably going to continue working part-time & bringing in some money too; hubby isn’t sure whether he will want to work part-time or not. Just wondering whether any of you have had experiences with (or are) financial planners & the pros & cons of using one.</p>
<p>Our bias is that most planners seem to be “selling” something–insurance, annuities, stocks, or something that gives them some commission. I do know that some charge by the hour or some % of your assets, but would love to read about folks experiences & expertise. Thanks!
HImom</p>
<p>My folks have had two or three financial planners. They meet with them first (sort of an “interview”) and always use one that charges by the hour. It is more expensive, but you have no need to question motives as you would with a planner who has something to sell or earns a commission. So far, it has worked out well for them.</p>
<p>you’re lucky today. Computer lockup and lost 10 pages of my favorite topic. </p>
<p>Basically, never believe everything you read, hear, or taught. Use a little common sense. Get an opposing view so that you understand Why you chose your path. </p>
<p>Have you ever noticed that the wealthy pay people a lot of money for services and advice vs the poor people pay nothing for service and advice. </p>
<p>Do your own research. It is easier than you think. Too many resources to site, nothing is always correct because money and YOU are in constant change. What is correct today may be wrong tomorrow and what is wrong today may be correct later. </p>
<p>I’ve tried them all, commissioned, salaried, salaried plus spiffs, “free.” I can say this, some ARE better than others, how and how much they get paid is immaterial.</p>
<p>We used a fee-based Certified Financial Planner about 10 years ago, when my husband rolled over a 401k to an IRA. I like the fact that he charged a percentage of the assets under management, since I felt that that would make him less likely to just sell us whatever he got a commission on. He looked at our life insurance at the time, and evaluated how much we would need, which was also helpful. The primary benefit, though, was in the area of asset allocation for the rollover IRA. He tweaked it over the years, but many times, there was really no need for change and we still would pay the agreed upon fee. So, a few years ago, we took this on ourselves. I had some background in financial planning and was able to do research on line and through several popular magazines. There’s no way to know if we would be doing better with his help, but I felt that the primary issue for us was asset allocation.</p>
<p>For retirement, you’ll have a variety of issues – annuities, health insurance, long-term care insurance etc – that may be better addressed by a professional. I think it would be wise to get some advice at this point – 7 years is really not a long term time horizon for retirement planning – but I would choose to either pay by the hour or pay a percentage. In most things, I believe that you get what you pay for. Free advice, if not suitable to your situation, could have a seriously negative impact on your retirement plans.</p>
<p>Yea for Federal civil service retirement. Not only defined but it goes up every year, and you get to keep your medical. When my wife gets around to retiring we’ll have two Federal pensions, and maybe an additional non-contributory one from the State of Wisconsin if I stay four more years.</p>
<p>we use a financial planner who we pay on an hourly basis and meet with him once a year. We go the hourly pay route to avoid the conflict of interest of the planners/brokers who also work for commissions. Our planner has helped with our portfolio … mostly tweaks. The big benefit has been on other topics like life insurance, changes in the inheritence laws, long-term disability insurance, college savings/retirement savings, etc … he has helped us inderstand these issues much better … and has contacts so we’re not making calls out of the yellow pages. Money well spent for us.</p>
<p>Okay, upfront I’ll point out that I’m a cynic.</p>
<p>When we made a lot of money in the dot.com runup, I wanted to keep it. I didn’t want to shell out 1 or 2 % to a planner; I didn’t want to pay management fees. John Bogle, founder of Vanguard, has always pointed out that those management fees really add up. The difference between a mutual fund that charges 1% and one that charges 2% can be hundreds of thousands of dollars over the longterm. A higher-cost advisor better be damn sure they can beat the market year after year!</p>
<p>So I read a lot of information–spent six months reading everything I could get my hands on–and found that the information on how to get rich and stay rich boiled down to this: pay cash, not interest; don’t buy stuff you don’t need; “wear it out, use it up, make it do, do without,” save 15-20% of what you make, always; don’t expect to beat the market long-term. </p>
<p>Most of our money is in what are called exchange-traded funds, stock funds that reflect the stock market. SPDR has a piece of all 500 top S&P stocks; QQQQ has a piece of all the top 100 NASDAQ stocks; DIA has a piece of all 30 Dow stocks. We also own the vast majority of our house (tiny mortgage), have Roth IRAs (the biggest tax giveaway I know of, longterm, put your kids in while it lasts!), and have a few other stocks.</p>
<p>We do have a really really good accountant. She has saved us a fortune over the years.</p>
<p>Thanks for everyone’s ideas. I am reading up & learning all I can, but still appreciate everyone’s perspectives & will continue to read whatever folks wish to share.</p>