This!
Our financial advisor keeps telling us to spend more money, and give gifts now, and donate to our favorite charities. So…that’s what we are doing.
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Several posts up - at Fidelity you can have your settlement account (for when stocks and funds are sold) be a money market type fund (like SPAXX, FDRXX, FDZXX) that pays at a higher rate than a cash fund. We have used Fidelity for decades, and like their platform and personnel.
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I think we have less money than many but it’s plenty for us.
Our kids are doing well, we made a generous contribution to our one grandchild and probably will if we are blessed with more.
Right now I’m hoping to do some home renovations this year
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Yes, I quoted the SPAXX rate in that comment.
I just noticed that the settlement account for my taxable is SPAXX but FDRXX for the IRA. FDRXX is yielding slightly higher so I don’t know why I have SPAXX for taxable.
H and I had the same FA as my parents, but I truly never liked the guy. Several years ago we transferred our accounts to a different FA, who I like a lot better. When my parents died and I inherited, first FA suspected ( correctly) that I would move the money to someone else. Before I had a chance to do so he dumped my account into a “ house account “ with a major investment firm. Just told me he did it and no contact information. It took me 3 months of phone calls, in person visits to the local office and finally getting my lawyer involved to even find out where the money was and how to transfer it to the an account with my new guy.
Yep, this really happened. All he had to do was email me and ask what I wanted to do.
So I guess I was right about him…
My new guy has been very helpful especially after my husband’s death last year. I have enough money to last even if I live for a long time and very likely my kids will inherit. I don’t curb my spending though. I plan to enjoy the time I have left.
I do gift my kids as it’s nice to have that money when they are younger and getting settled. I also fund accounts for my grandchildren’s education. As for taxes, I agree that it’s free money for them , so they can handle that if they need to.
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That’s why my accountant told us not to convert to Roth since we have to pay the taxes. We plan to leave any remaining 401K and IRA to our grandchildren (eldest is 10) so when they inherit it, their tax brackets may be lower than ours.
My kids’ tax brackets already are higher than ours.
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So are ours, that’s why we are not leaving too much to our kids in our will, it will only enlarge their estate when they get old. We have Delaware trusts for future generations.
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don’t forget about the Kiddie tax which which means any income over $2700 is taxed at their parent’s rate.
I hope to be still alive (likely will be) until they are exempt. 
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Yes I just mentioned that because as we have added Fidelity accounts Fidelity has made the settlement account a lower paying cash account and we have had to go in and change it to a higher paying fund like these.
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All of these have a high expense ratio for a simple money market. For example, SPAXX has an expense ratio of 0.42%. This relates to why it only pays 3.33%. The high federal funds rate is 3.75%. 3.75% - 0.42% ER = 3.33%. As such Vanguard’s lower ER cash sweep account will always have a significantly higher yield than Fidelity, as will short term treasury ETFs like USFR or SGOV. The latter is also state/local tax exempt.
Regarding which brokerage to choose, the ones that were mentioned (Fidelity, Vanguard, and Schwab) are all good choices that will do fine for basic functions like buying and selling funds in your IRA. They have differences in additional functions like cash sweep rate, bill pay / banking functionality, quality of support, user interface, etc. It’s a matter of personal preference. I personally often choose smaller brokerages due to superior bonuses (1-2% of balance, with 1 year hold). However, the superior bonuses often relates to being lower quality than the big brokerages and needing to offer the generous bonuses to get new customers. There are advantages and disadvantages.
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We’ve started to think about two problems and I realized I might be able to combine them. One is what we do with ShawWife’s unsold paintings. ShawWife is both very talented and very fortunate. The combination means that she sells a majority of the art that she creates. But, over 40 years, that still means a lot that has not sold. We don’t want to leave the problem of dealing with the unsold pieces for our kids as no one would have room in their house for more than a few of her paintings/prints (and both kids already have some as do ShawWife’s siblings). Some are smaller (14”x11”) but many are larger (69” x 75”) or huge (56’ by 30”). We are thinking that we have to form a relationship with a museum that would like to be a repository for her work. Maintaining a collection costs money (warehouse space, possibly shows)
The second issue is philanthropy related to our activities. I have been increasing the amount of time related to my pro bono activities. We do have a donor advised fund (DAF) that has grown pretty well over time. We have said that we wanted to use it to support valuable work in which we are involved. My own pro bono work has not needed it and my current project is turning from non-profit to for-profit because the only way to get capital to move in scale and speed is to have a profit motive. But, we might be able to use the DAF to donate to the museum to enable them to be able to house the collection that we would donate separately (some museums have purchased a piece or two already). That would align our giving with what we want to accomplish in the world, though it is different than the kind of alignment I was anticipating.
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It seems your current FA gave you a lot of information in a short time. Also, you set up the meeting (why was the FA not keeping up with you as a client?) - and then gave recommendations w/o really ‘knowing you’. Somehow your FA didn’t understand that your periodic distributions was going to reduce or maybe end (the financial help to your children was ending). Do you understand your investment fees and is the yield on the investments good considering the high fees? Can you get online and pull up things or do you need to get FA to provide this information? It seems the American Funds that were in your mom’s IRA (and that needs to be spent down) - to me that is the place to start on investing elsewhere, since your current FA didn’t make a good recommendation on these funds IMHO.
You have a lot of questions still probably after reviewing goals for 2026 based on the information you received from FA - and IMHO FA should have done some work with you and then given you enough information for a follow-up meeting. FA to me did a poor job with your meeting. IDK if FA actually worked as a fiduciary with you (worked in your best interests). Did the FA review at all your past returns with the investments and how the plan she/FA suggested would ‘work’ for your ST and LT goals? To me, the HELOC was a big red flag.
Our FA has our Roth IRA accounts now with Fidelity (they received favorable trade activity matching what TD Ameritrade had for them - when Schwab acquired TD Ameritrade, Schwab did not give them the same favorable trade lower fees), our personal account is also with Fidelity. My DD2’s company Roth 401k is also with Fidelity (and I help her manage those investments). When I worked my sunset career, my 401k was also with Fidelity – and I had studied the investment choices during those years - when I retired four years ago, I cashed my 401k out because we were in a low tax year and our liquid funds needed a boost - and the funds were from only a 5-year work history (4 years of participation and matching in 401k).
As you, I have been building up our personal investment account, especially last year - instead of ‘spending down’ 401k by moving some into Roth IRA I felt it was better for us to build up after-tax funds (for a number of reasons). We are 69, and in lower tax years prior to RMD. Over other past years, we transferred some 401k money into Roth IRA. But our needs are such that we have to have more accessible funds - maybe 2027 will be an out-of-state move for us, which requires us to have more liquid funds.
We have kept DH’s 401k with employer group (allowed as retiree) - they pay overall admin fees. We have some good investment choices there (which we manage) and have done well with them. Since we have no pensions, we have spun off funds from 401k to purchase annuities through our FA since 2013 - we currently hold 5 which mature in 6 to 12 years from purchase (our first two matured and we purchased 2 other ones. After 1 year, each annuity we have withdrawals to maximum allowed w/o penalty. The concept is for the annuity to retain its value with the gains specified by the contract. This gave us cash flow (in addition to our SS). DH’s 401k is our ‘cash cow’ so to speak - since it is in various diversified stock accounts, it has nice gains (small downturn in 2018 and significant downturn in 2022 which was recovered in 2023). Our FA is a fiduciary and studied and knew the annuity market well - and that was key for us. Since we worked with FA for a number of years (built up confidence and trust), DH grew in his understanding of overall financial picture. FA group gives ‘state of the market’ meetings twice a year and we schedule our individual meeting shortly thereafter. Our FA was the President of the company, and we now are with a more junior FA with the group - but anything major we will get the FA President involved (for example, our next annuity maturation is Dec 2027).
I would recommend opening an account with the group you feel comfortable with - be it Vanguard or Fidelity (or maybe both, if you can’t decide right now). Once you open an account, gather more information, analyze things, decide what direction you want to go with transferring your ‘big accounts’, it is easier when you have laid out the groundwork.
You might assess if it is better to transfer the ‘product’ from FA, and then changing investment later, or if you sell and transfer the cash.
Every time DH’s employer changed their 401k investor group, I have needed to learn how to analyze their information (and get familiar with the reporting options in addition to how to take distributions). DH’s company went from Dreyfus, to Prudential, and now Empower. Most recently, I needed to set up an IRA account with Fidelity for DH so we could transfer 401k money from Empower to Fidelity and then transfer the funds from DH’s IRA Fidelity account to our joint Fidelity account. I did all this in November. Now that those processes are in place, I know how to do it for repeat later in 2026.
You can call Fidelity and ask for details on setting up a fund to transfer IRA - and options for you (transfer cash or transfer the actual fund). I don’t work with Vanguard to know about working with Vanguard - but you can look on their website to see details.
I am looking into Vanguard ETFs with my personal investments.
Another option perhaps, would be to donate paintings to auctions for causes you support…?
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Home improvements and a little travel are important and reasonable expenses.
Average life expectancy is lower than living into 90’s.
To me, once your parents are still alive, that needs to be considered. Once that chapter is closed, can perhaps focus more clearly on retirement goals. But it spending a bit on the house now makes your QOL much better, so be it.
I have been having reasonable travel. DH doesn’t want to travel (unless going to family-related events) because of all his work travel nationally and internationally – he wants to be a home body.
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Wow on the annuity advice for your mom (age 88) which clearly was not in her best financial interests! Good for you on your strong intervention!
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This is a very real conundrum for artists. I have a friend who is a well respected artist who commands a lot of money for her work. She told me a story about how she threw some paintings in a dumpster early in her career, and she later saw them for sale for quite a bit of money … the person who “rescued” them knew what they were doing. It was legal, of course, but it really upset her. She said she never threw out any of her work after that. She’s 70, and I can only imagine the stash she has in her studio!
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I have an older friend who is not a great artist but a lover of painting. She made paintings that are nice but not anything someone would collect as an artist.
So many paintings. She sold some, she gave some away. It was a lot!
Now she’s in her 90’s, doesn’t paint anymore. In a memory care facility.
But for all of us who have one of her paintings, it’s a reminder of our friend and her passion for her craft.
Like those who knit or quilt, those works are cherished.
I’m sure not the same as shawwife but the post made me think of my friend. Fondly
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@blueberriesforsal, an understandable suggestion – and ShawWife gets maybe 10 such requests a year to donate her work for charity. A quick and slightly tangential (not related to retirement) rant on donating paintings to charity. First, having a piece auctioned at a charity event tends to devalue the pieces. Except in the right kind of setting, people seem to be bargain hunting and if there aren’t many art buyers, a painting can sell for less than she would sell it for (I have been to some auctions where the folks bid up the auctioned item to benefit the charity but more where people are trying to get whatever is on offer for the lowest price possible). Second, she feels that the request devalues her time and effort. Why ask artists and not lawyers and accountants? How about asking lawyers to donate several days of their time? Or asking an accountant to donate his/her time to do the winning bidder’s tax return? I wonder how many takers we could get for that. Over time, she has come to feel insulted by that continuing request. Third, she gets no tax benefit from donating a painting. I tell her to sell the piece at full price and then donate to the charity if she wants to or to donate to a museum if she finds one that wants her work but has a very limited acquisition budget. Either one can enhance her career. But this is not really related to the end of the career problem. Returning from rant, …
More pertinent to the retirement focus, donating a collection to a museum, especially a university museum, is good for her artistic legacy as people may continue to see her body of work and can be good for students when university art classes use them. If instead paintings are randomly distributed to people who don’t have collections, there is no continuing benefit to either students or her artistic legacy. If we can’t find a home for her work, then donating the pieces at auction is not inconceivable. I guess one question is what happens to the pieces if they don’t sell at auction. Do they give them back to her? Or are they responsible for finding a home?
The NY gallery that represented her (until it went out of business) used to handle estates of artists and had been prepping her to save at least one piece from every series so that they could sell the estate.
@deb922, a good point. ShawWife has given paintings to our kids, her sibs, some nieces/nephews as wedding gifts, her godchildren and some friends. Given that these pieces sell for a lot more than one would pay if one were buying a wedding present, it is a generous gift. But it makes her happy to know that her pieces have a good home.
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