Go for the vacation condo!! Both of you!
āHey, as long as you will have enough money, and can sleep at night, it really doesnāt matter that much if Don is being supported by investments he makes for you and his other clients, I figureā
I donāt know about that. Sleeping at night is pretty important, and so is having enough money. But if someone is directing you into certain investments because it gives HIM a bigger commission, I have a problem with that. I donāt mind paying a small percentage of my account to an advisor, because it behooves him greatly to increase the amount in our account, not to sell us particular investments, or churn our money.
Does anyone here use a fee-only financial planner? Fees are high but they do not benefit from any of clientsā investment decisions. We have been using one that does financial planning as well as investment advising (usually no-fee or low fee mutual funds). We are in general happy with them but I sometimes think about if they are worth the high fees they charge. We are too busy (or too lazy) to take care of our investment so this is better than doing nothing. I am interested in everyoneās opinion on fee-only advisors.
I didnāt want to state specifically what my returns are with the Annuity products because I donāt want to go into the computer access and search around when I know it was good at the time H and I made the decisions, we are going to see Don soon, and H was supposed to be accessing the investment link. I know the recent one purchased in Dec (The Nationwide Annuity Contract) was favorable for us on eliminating the risk and getting the return we want from that portion of our investments. In Aug, the client access info changed because Don changed investment advisory services companies which reduced fees. We should be able to get all our things streamed into the one computer access, but until then, when we meet with Don, we input our 401k info and see how our overall portfolio is, how our risk is, how our returns are, what is adventurous for us tax wise, etc. We were happy to be able to move money from 401k (since H turned 59.5) and lower our risk while keeping our return good.
The Allianz annuity name is Allianz 360sm Annuity. We get an annual statement (H Birthday and my Birthday) - it gives a fair amount of information, and provides rates and values for the new contract year. We also choose allocations - annual point to point (using s & p 500 index, Nasdaq 100 index, blended index, russell 2000 index, Barclays US dynamic balanced index), monthly average (blended index), monthly sum (s & P 500 index, nasdaq 100 index, or russell 2000 index) or fixed interest. We started with S & P 500, and in 2015 changed to 50% S & P 500 and 50% Barclays US Dynamic Balance Index - Donās input was we would hedge things, and Barclays was a good index.
We did receive from Nationwide a detailed Annuity Contract, which included a page āBalanced allocation strategy and strategy optionsā with the initial strategy option JPMorgan Mozaic Strategy A, with initial index value 232.63. Then it details āinitial crediting factors for the balanced allocation strategy options (strategy options)ā. There is a page āGuaranteed annuity tablesā monthly benefits per $1000 applied, male chart and female chart detailing age 50 to 100.
And in our upcoming meeting, we will go over these investments, their returns, etc so H and I do understand everything better.
Yes Donās company operates on the fiduciary standard, is National Ethics Association Certified, and is one of two Master Elise Ed Slott tax planners in AL, and he relies upon strategic CPAs to help enhance portfolio building strategies.
I do rely on the bi-annual market analysis reviews and other programs presented by Donās firm. We get email updates. Don and the two other professionals in his group devote their time to doing what some on this thread do for āfunā or as a professional. In H and my view, Don is doing a good service for us. But the questions raised here also will be forcing me to document a little better and ask a few more questions in our upcoming meeting with Don.
I have two graduate business degrees and am pretty intuitive on people, honesty, and I do understand the information as it is presented. As time goes on, I am getting better in organizing my notes and our financial binders - which has been an ongoing thing - I have been most focused on the 401k where we had so much of our assets until we could shift some over time into other investments as recommended by Don. Shifting over through our financial planner Don, we also have time to see how the returns have done on both major areas of our retirement assets. Partially due to chemo, and partially due to not being interested in the details of investing, I am usually happy with the overall picture. If this were engineering, H would be interested in all the details. I make sure H and I both go to all our meetings with Don, and H says Don explains things to where he can understand.
Yes, using a financial person has a ācostā. Don is very good at what he does and makes a good income, runs a good office, and in our view provides us with a great service. We are in a mid-sized city with a lot of retirees from fairly high income professional jobs. I personally know someone that has had their financial planning with Don a long time - pretty much from his own office start up 10/15 years ago when it was Don and his admin assāt (who is still working in the firm).
H and I are very glad we found Don and his company. I do understand there are the Bernie Madoffs out there - years ago there was an accountant in our town here that bilked over $1M out of his investors, including his church pastor! He went to jail for a long time.
Did anyone hear the financial segment interview by Raymond Arroyo with George Schwartz (ave maria investments) on World Over this past week (I had recorded it when it aired 1/21). Interesting information - George commented that a bear market lasts on average 10 months unless there is a recession and then the avg is 20 months. He seemed to think we will not have a recession. Also commented that our economy will be strong if a republican is elected - makes sense with pro-economy and not the socialism and taxes and culture of death. I am pro-life (and pro-women!) and understand the evil of abortion. Ave Maria Investments eliminates about 150 investment choices from their consideration.
Raymond had some good questions. Nice to hear a fund manager opinion.
I do my financial planning myself. One way to get more info even if you have a financial planner is to go to free seminars from different financial planning companies. We go to the free seminars which include dinner (the main reason to go). Usually they offer a free consultation. One of them included free consultations with accountants and estate lawyers. These are useful because they give different perspectives. They donāt like dealing with me after about 15 minutes.
" They donāt like dealing with me after about 15 minutes."
Sounds like Mr. B and you have some things in commonā¦ 
They can tell by the questions and answers that I will never be a customer. One guy actually said after a few minutes that it was clear we were all wasting our time.
@4beardolls, a fee-only planner is better than nothing, but even they are sometimes borderline (eg, ālet me introduce you to someone who has great results with munisā).
I enjoy the financial forum at Bogleheads, so it might seem that Iām very active in managing our accounts, but I donāt think that I spend more than an hour or two per year on my accounts, and they total in the middle/high seven digits. Most of the time is spent deciding which of my kidsā accounts to withdraw from for tuition. DW and I are still accumulating, so the only thinking involved is seeing which part of my asset allocation is lagging (which Quicken tells me the instant I log in) and adding new funds as appropriate. All new money goes into 3 or 4 funds, depending on AA and whether the account is tax advantaged or not. If I were any lazier (and Iām setting a low bar here), Iād probably pick a tax-managed balanced fund for taxable, and a Target Retirement based on age for tax advantaged.
I personally do not think itās worth even 25 bps, much less 1%, to have an advisor, but thatās what makes horse races. My neighbor is a FA/wealth manager; I wouldnāt hire him to run the concession stand at a Little League game. Nice guy who keeps his lawn neat, but heās always leasing exotic cars ā but not with my money he isnāt!
Just my 2 cents.
ETA: I also update my ESPlanner license every year. I donāt know why, but I find it reassuring that we could live higher on the hog than we have any desire to do.
The Alliance product should give you what you want. Downside protection with the cost of lowering your upside potential.
This is a simple questionā¦ What were the future returns Don said you could achieve with this annuity?
Why are fixed income returns in this annuity? If the fees are 7.5 percent when purchasing this annuity (plus there are additional fees in the future) and you are getting 1 percent a year return on fixed assets, you arent going to be making money on this.
If you want fixed income assets, buy fixed income assets.
Dividends are not included in the charts Alliance uses. So Alliance is understating stock market returns when making comparisons between products.
Because there are caps to the upside while no caps to the downside in these monthly choices, when doing the calculations, you end up with lower returns.
For example, the stock market drops 6 percent one month. If the cap rate is 1.5 percent a month, you need 4 months of increases of at least 1.5 percent to start making anything (excluding costs).
So, if the market drops 6 percent in one month and then rises 10 percent over the next three months, you are still not making money even though the market is up close to 4 percent.
The correlation between stock market returns and the Alliance annuity is low enough, other products can be used as indexes.
Alliance could use Tom Bradyās stats. If he throws over 300 yards, the higher the yardage, the more you make. If he throws for under 300 yards, you break even.
Actually, I would use Stephen Curry. I think he is the most exciting athlete to watch over the last 20 years. If he makes a half court shot, the owner of the annuity would get a bonus!
@busdriver11 and post # 7881, quoting me, I guess I was having a weird, individual reaction.
At some point, I figured ā as long as SOSConcern will have sufficient funds to last the lifetime of poster and spouse ā I thought, so what if some of those funds went to support their financial adviser? AS LONG as they do get the returns expected and at least as much as is needed, perhaps they are willing to āsplurgeā by placing their money with a guy who earns income from their investments. Yes, it may siphon off some money from their returns, but if they feel the guy is really doing a good job, and will continue to, their comfort level of being with him can be one of the luxuries for which they are willing to splurge. (That of course assumes Don is both knowledgeable and ethical and does put their interests first.) If they are well enough buffered, they can afford to spend some money on fees.
I myself am in the Boglehead camp, and keep my money in low-fee non-commission mutual funds, but if others want to do otherwise, OK by me. Itās what makes horse races interesting.
So while I acknowledge concern re such heavy reliance on āDon,ā it might just work out OK for that poster. Feeling comfortable is worth something, as long as that feeling of comfort is not delusional.
(Just my one-person impetuous reaction when reading this thread.)
JEM, I donāt begrudge people making a living, and a good living at that. However, I am always suspicious when there are deals that the person who sells you something gets a commission based upon what product you buy. If they get a greater commission to sell a product that is less beneficial to you than something else, how can you feel that your interests are best served? I would like to know exactly the commission that someone receives, and what the usual commission is for that sort of product. In fact, it makes me wonder how great a product can be, if someone gets a large commission to sell it.
I like win/win scenarios, but Iām rather suspicious. I would like to read specific reviews and have detailed information, and if a product is too complicated for me to understand easily, perhaps Iāll just stay away from it.
@busdriver11, I fully agree with your points. For myself, I would either use low-fee funds or, if I wanted professional management/input, an hourly fee-based financial planner, whose fee I would pay to eliminate concern about how his input might be skewed.
So I am very conflicted about this issue re āDonā ā except that I realized, as I considered it, that in the end, as long as there is money left over, it will be OK anyway. (In other words, if the investments donāt make the optimal income, I wonāt care as long as I had enough while Iām alive ā and my spouse, as well.)
But that is me. Any inheritance/estate is far secondary to my primary goal ā for both my spouse and I to live well and die without financial challenges in our later years. Not to be a burden for our kids.
Leaving an estate for kids/charities would be a bonus.
So part of my reaction is my own āenough in enoughā philosophy. Peoplesā agendas may vary, and sometimes it is even a game to see how well oneās investments can do.
So help me out then. This inheritance isnāt needed for my day to day. Iām putting as much as I can in retirement and my outside retirement account is really also for retirement. When I hit my magic number I can contemplate retirement.
I already keep probably too much in cash. Is there a vehicle to invest money that isnāt necessarily for 20 years down the road that wonāt clobber me in taxes if I decide in a few years to use it?
Iām spending part of this snow bound weekend, figuring out my pension (not very big) options. It has a fixed and variable annuity associated with it. The main issue is the joint option that has either a 50% or 75% survivorship associated with it. My wife will have a good pension, much better than mine but on the other hand will not get any of my ss when Iām gone. Going through this stuff is time consuming and quite involved. Her pension has an interesting feature which is that it is reduced to provide full survivorship that depends on my age and if I go before her, it goes back up to what it was if she collected without the survivorship benefit.
Iām sure Iām not optimizing my portfolio. However, we just keep it simple. I am very conflicted about the advisor thing. How wonderful if we could find someone we really trust, who does the best job possible for us. However, what if you realize after many years, the guy or gal was a snake, maximizing their profits, not yours. I feel more comfortable with our low cost mutual funds, for the most part.
Thanks, @IxnayBob, for your comments in post 7888 which I agree. I used to manage my own accounts but lost a lot of money during the tech stock bust. Now, I get to blame someone if my return doesnāt meet expectations. And for that luxury, I have pay around .5%. I am envious of you able/willing to manage your own investment.
As a fairly active investor, I wouldnāt be able to find a financial planner that does things the way I do.
There was a financial seminar from another guy that we were going to go to (nice dinner, etc) because it sounded like he had some good credentials, but we had a schedule conflict.
@IxnayBob is AA annualized ___? What is AA?
Some on this thread may be very versed and enjoy actively managing their accounts. I like the additional input and the reduced risk while also keeping returns that we are happy with. However I am reading more to be a better informed investor/consumer.
The tax situation and risk are variables in addition to the investment return, all are considerations.