My father thought it was safer not to have all his eggs in one basket. It took us years to find and consolidate everything. There may be things we missed.
I don’t see anything wrong with having a large account separate from your other things, if it’s doing well and your family knows it is there. If it ain’t broke, why fix it? Plus, does your planner think she can really do a far better job than has been done, or does she just want you to transfer the account so she can get a commission on a big account? Is she looking out for her interests, or yours? I see the point of having things centralized, and not a bunch of little accounts all over the place, but nothing wrong with two different places.
Yeah, we have a spreadsheet that lists all of our accounts on one page with plenty of white space left over. It’s in the folder with the will and trust paperwork. Easy peasy.
Your planner wants the extra money to earn extra fees. No problem with that, it’s her job to ask and her boss tracks the growth in her Assets Under Management number, and her career depends on growing that number. You have your job, she has hers.
Check and see whether your assets she has managed over the last 7 years have done better than your age based account over the same time period. If they have, look into why. What is she doing that caused that extra growth?
^^To add, and is it worth the extra fee you will be paying her to manage it? You don’t want to do something just to keep her happy, that could cost you big time over the years.
Our planner owns her company so no boss to answer to. If we switch to her she drops our 1% management fee down to .8% with us changing the large account over. It just comes out of our profits I keep asking H to figure out what we pay for the other acount but he can’t seem to figure it. sigh… 
@NorthMinnesota The other question you need to ask yourself is what kind of fees do the investments have that the planner is putting you into? So, she is skimming 1% of assets off the top annually. Is she also putting you into investment vehicles whereby she gets a commission or kickback in some way? There are many ways this can be done such as a front-end sales load charged on a mutual fund, a surrender charge on an annuity or commissions may be paid directly to the advisor from the investment company like 12b-1 fees which many have never heard of.
https://www.sageoakfinancial.com/are-you-paying-these-hidden-investment-fees-part-1/
http://www.cnbc.com/2016/06/01/uncovering-the-investment-fees-you-dont-know-you-are-paying.html
Aside from the current direction: How do you all feel about the wave of baby boomers withdrawing funds from the market for living expenses as they age? We keep asking our financial planner if that wave will affect the market over time. They keep telling us no – but my gut says otherwise. Just curious what others think.
@kjofkw, someone I know was convinced the market was going to take a terrible nose dive forever when the baby boomers started retiring. That clearly hasn’t happened. As I admitted recently, I’m holding a fair amount in cash, which I know is NOT recommended.
@NorthMinnesota, doschicos has a point. What is she doing for you? Is she trading things that already have a commission attached to them, and adding her 1% onto it? What kind of things is she buying?
We have an advisor that we pay 0.75% annually to, and he only trades stocks with the money. He does have to pay fees from the account to trade the stocks, of course. He has gotten us an annualized return rate of 16.7% over 20 years, so we have absolutely nothing to complain about. Turned less than 20K into 424K. But if he was trading funds with large commissions and fees, plus adding his fees…it’s unlikely we would stick with him. What are the specifics of what your advisor does for you, if you don’t mind sharing.
It currently is a lot about the fees.
Our financial guy has 1% fee; he does earn some on front end like when we got into some annuities - which were good decisions. One last year earned 12% and less risk than bonds.
Financial guy also has found ways to lessen fees for whole group. It helps him earn money too.
We are in our early mid 40s. Don’t picture stopping completely, but would like to have an option to get off the fast train onto a slower one in a few years. First I want to see our nest egg grow to $1M+ from about $650k. Home is already paid off. Need to make sure make sure college costs for both teens are fully funded. Fortunate right now to have a very stable inflow that exceeds outflow by at least $100k after tax annually. By 50 I want to be ready to start slowing down gradually, but not stop completely until SS age.
Wow, @LOUKYDAD you are dong wonderfully with the cash flow, but totally understand how you want some quality of life and less work pressures/stress/time challenges. You have the time value of money working for you too.
Investment wise I plan to keep things very simple. I am an indexer. Investment grade bonds don’t offer an acceptable return right now. Dividend stocks do. I own VYM. A diversified income stream that will grow every year, no matter what the market is doing. I don’t pay currently and don’t plan to pay anyone anything for investment advice.
My returns won’t ever be worth bragging about at parties. But I feel 100% confident that over the long term they will be equal to the sum of inflation, plus dividends (currently 3%), plus some additional positive amount I can’t predict. I can live with that just fine.
Putting money into an age-based retirement fund product AND having someone manage it doesn’t really make sense. The age-based product is already managed (and you pay for that via expense ratio). I think I may have misunderstood though.
^^Agree with LBowie. But I have also misunderstood.
Hi. The interest rate on my HELOC will be going up in August because of a change in the prime lending rate. This has again pushed to the front of my brain the question whether I should pay off in full the amount due on the HELOC (now approximately $4,500), which I could do from a savings account that is earning less interest than the HELOC is charging. I would still have a reasonable amount in the savings account if I withdrew this amount. Are there any tax reasons to not pay off the HELOC?
I would imagine your HELOC is around 3.75 or 4%. On a $4500 balance that will cost you about $180/year or so in interest. Assuming you can itemize your deductions, your net cost is about $125 or so. If not, your net cost is $180 or so.
I assume your savings account is paying virtually nothing in interest (my savings pays 0.05%, a money market account is about 0.6%) so best case, $20/year or so. And then pay taxes on that pitiful amount…
So you would save about $110/year by paying it off. Not a huge savings, but there’s no reason not to. The great thing with a credit lines is it will still be there to use even if you pay the balance down to 0.
“One last year earned 12% and less risk than bonds.” - That sounds great. Almost too good to be true. Hopefully you’ve done your research to confirm low risk, not just trust the FA. (I know you are a thorough researcher, so probably you have. Just want to make sure.) Not that risk is wrong… investors should just know the real scoop.
Evidently you don’t understand the concept. What people brag about at parties bears little if any relationship to what they have actually done in their accounts. It’s all about what they read that they should have done because it would have paid off big time, so they claim they actually did it. If you are trying to brag about your actual results you are not playing the game right.
Stupid people brag at parties. And, usually, they brag about their one “win” but never mention all their losses.