For what’s it worth, I have been a banker for 35 years, have numerous brokerage licenses, and at one point had 200+ financial advisors working for the much larger organization I was running.
I use a financial advisor for both my blind trust (which I am obligated to have given my corporate role) and the investment portfolio I manage and report.
I always find listening to others with experience to be useful and valuable. Often it’s not what you don’t know that bites you, it’s not knowing that (or acknowledging) that you don’t know something that comes back to haunt you. In my experience the smartest person in the room is typically not the loudest or most self assured. I approach investing with humility.
There is also something to be said for having a FA to use as a knowledgable sounding board… reduce stress between spouses regarding investment decisions. Depending on situation, that may or may not be worth the extra costs.
I find the sweet spot for CDs is usually in the 9-13 month range. Many times the “special rate” CD is in that range. Good rate without having to think about it for a nice chunk of time. Again, always non-callable.
I prefer not to think about my investments regularly. I want to be able to go months without having to make a decision. I can do this with my current portfolio. Only decide when a CD matures.
When we were younger and had managed laddered munis and stock funds, I was happy to pay the fee and again have somebody else thinking about it on a regular basis.
Now I just want to be no-risk, no thinking, and enjoy my retirement.
Please don’t think me condescending for asking but I assume you invest in CDs at amounts under the FDIC cap of $250k per investor? Just making sure you aren’t unexpectedly taking a risk that might not have been on your radar screen.
A little bit of information can be dangerous - and it is fine to detail out information on this thread.
Like some on this thread, we have various experiences with our investments, and we are happy with our FA and the investments we also do on our own.
Right now, DD1 has just had their 5th child - and both SIL and her FT income are needed in their household. They moved away July 2023 (they had been 100 miles from us) so now more of my life needs to be near them. DH is a bit more reluctant for ‘the big move’ but we have to focus on downsizing ‘stuff’ in our home. As soon as SIL makes a job transition somewhere around April 2026, we will know they are in that city for long-term. Until then, I have been making trips (I just returned from one month, while DH was there with me for the last week, after #5 was born and was there for the baptism).
So lots of things important on my mind and DH’s mind. He has some hobby involvement (he has two HS student teams he has been involved with/coaching that will go to the national event, which he has always gone to in retirement), he has a canoeing/camping/fishing trip with his brothers. I have a OLLI (Osher Life-long Learning Institute) arranged short trip over Memorial Day time frame (I have to purchase my airline tickets on my return home after Easter with DD2).
Our primary residence is going to change - so lots of changes there. Considering the funds and tax-wise the best way to handle that all. I expect to pay more for less house in the new city. For us, it is wise to have our home sold first - and we will store things in local place to have our home be ‘show ready’ when we list. Then once our house is sold, go from there.
‘How much do you think you need to retire?’ - our home has appreciated since we built it, and it is too much house for 2 retirees with family all out-of-state. However, not wanting to ‘downsize’ in our community because sell and buy and not getting the quality of home with any kind of real saving. Our home will continue to appreciate until we no longer desire to live in this area (which is relatively soon).
What you describe is a whole lot more than I want to do in these areas. We do monitor our overall portfolio once a month, and I do monitor monthly detail off of that, but sometimes not in real time. Every so often I will study returns in greater detail and look if I need to ‘rebalance’ our 401k investments, and anything else that needs tweaking. We look at updates from FA, we go to semi-annual presentation and then go to individual appointment with FA semi-annually. We communicate with our FA - for example one of the annuity insurance companies decided that our monthly non-penalty withdrawals (monthly) needs to have new paperwork, so I emailed our FA and that was news to them as well. We got a letter about one annuity (and not the other) so he is checking on that – both are with DH, so he will sign paperwork when we return and will make sure we don’t miss a monthly deposit into our checking account.
We look at big picture, some detail, and important detail like having our cash flow not interrupted.
Bond funds I would never buy. Then the bond prices matter because they are trading in and out of them, trying to time based on trends. I would never pay someone a fee to manage bonds. Especially people that pay a 1% fee - you are giving a quarter of your return away for no reason.
My last bond I paid 94. When it calls or matures I’ll get 100. I don’t care about inflation or tariffs or commodity prices. A fund manager does.
I laugh - people learn about all sorts of things - which dishwasher has this feature or tv has that. But they have hundreds of thousands or millions and they don’t want to know about an equity or debt security. . To each their own but that always blows my mind. Securities at their base level are simple but the full service folks are good at making you think they’re not. That was the entire rise of Vanguard though which is the behemoth - stop wasting your money and buy simple. Buffet says that too.
Most brokerages have an individual bond search. Schwab has a great one. It has corporate, government and CDs too so for the cd buyer, you see so many banks in one place.
The competitive marketplace has really made great strides in offering individuals so many products.
Btw your last comment - is all I’m doing actually - checking on the first or 15th or whatever day the bond pays (JFK airport is on the 30th) - my cash flow, just like you. Occasionally the brokerages post a day or two late - usually due to a weekend or holiday but I always get paid. But I check bcuz if I don’t get paid, I’d need to know. I never check to monitor the bonds tho. When I have excess funds is when I buy so I’ll check rates then. I don’t know if the money managers are checking expected payments so closely. I’d hope so. I’m a trustee for someone who uses one and they have a large staff (lots of Lafayette grads) and I assume they keep tabs. The owner has squandered so much in fees paying for below market returns (9/11 money for a young child who is now 24 or 25) but I’m told - less volatility. Hmmmmm. And the owner pays .8% for this. But not my money. I just review the statements each month as that’s all the owner wants.
For some investors there are clear benefits to investing in fixed income via bond funds. The description below provides a framework.
Bond funds can be actively managed to cushion interest rate moves and credit events, offer better and more consistent liquidity, provide diversification vs individual bond purchases , use leverage in some cases to increase performance, and have more customized payment options.
For some this make sense, while for some single name portfolios are more sensible if they understand credit and are close enough to the market to recognize value at time of purchase.
Historically funds do tend to out perform when considered on a total return basis.
In the spirit of your question, we’ve been reviewing our saving & investing plans recently and have decided that due to increased volatility and uncertainty we need to be saving more.
We are now targeting saving enough to replace current income completely, rather than just a multiple of yearly expenses.
This probably belongs equally in the retirement travel thread, but we have a lot of travel scheduled already (some domestic, some international) through next January. We are also looking into planning yet another international trip this fall to Portugal. Even separate from the economic climate and the falling dollar, I just can’t seem to get excited about it. This is separate from the fact that we aren’t quite sure we want to plan the same trip as the friends we are supposed to travel with. So its not really all about how much we need. Its about how much fun we will have with what we spend. DH will most likely be retiring this year. He feels like even with the market downturns and losses we are fine. Its just hard to feel excited about booking yet more travel this year. Anyone else having this same feeling? Is it related to the market and declining dollar value? Honestly I am not sure.
I have already used my flight upgrade certificates for 2025, so won’t be able to use the next ones we will (likely) get until 2026. If someone has a way to boost the doldrums I am feeling towards yet more travel planning, I am all ears.
Many on this thread (like us) are retired. We are now turning 68 (DH retired at age 64 1/2 and I retired right at 65).
“How much do you think you need to retire? what age…” DH put in his two week notice when he thought we had enough money in our retirement nest egg. The stress of his boss and workplace - we did have enough for him to retire and I agreed it was fine for him to retire.
I have given a number in the past on this thread on our portfolio. It differs for different people - where they live and how they spend, what their needs and wants are in retirement.
We have no pensions, and we have cash flow via annuities we had purchased over time, mostly out of DH’s 401k. We got a FA after finding one we liked, and since finding that group (in 2013) and with a series of meetings, we consolidated our straggling investments (a lot of loose ends - SAR/SEP, IRAs, a former employment 401k, etc.) and developed a plan. We continue to manage our well-performing 401k (currently in 3 different stock groups which are investment choices we have with DH former company’s “umbrella”, which pays the overall fees charged by EMPOWER). We now own 5 annuities and we receive non-penalty cash withdrawals every month. This supplements our SS payments. DH took SS at about 65 1/2, while I took mine right at 65. I had enough time with SS that I have my own check/payments. In late 2021, when DH retired, we had built up our checking account, but during 2022 we didn’t really spend down much. So later 2022, when I retired and started drawing SS, we were able to wait until Feb 2023 to start drawing DH’s SS - and also turned on the auto payments from annuities. Holding off DH’s larger SS to be closer to his ‘full retirement’ with SS (for us it was 66 and 4 months) it was not much of a difference in the money – plus the time value of money and not taking more out of other funds we have.
I was able to carry both of us on my employer health insurance and turned on Medicare and Supplement, Drug Plan all Oct of 2022. Not having to pay COBRA saved us $1,000/month. We did take COBRA on his dental plan, and have since purchased through our dentist a payment for routine services (dental cleanings, X-rays) and a discount for extra things like crowns, fillings. We pay for a monthly vision plan because DH’s glasses are expensive, and after building up maybe 3 full sets of glasses, we may end that vision plan. Once DH did drop his glasses on canoeing/camping/fishing trip and did have a spare pair along. At some point, he won’t need new glasses.
My # is $3 million investable (not a home).. That’s my minimum. That gets me to a # I like if I can make 4% ($120k) without SS and other things (pension) that will be icing on the cake if they pay.
I’m looking to preserve capital so I want to earn more than I spend. And pass to heirs.
Others earlier in the thread said they want to spend down their money, enjoying it.
So everyone truly is different in what they’ll need from a $$ and even investment POV.
I’ve been listening to Ramit Sethi’s podcast “I Will Teach You to Be Rich”. So much better than the title would suggest. Ramit is a wonderful host, patient beyond belief with guests and I’ve enjoyed listening.
One of his main tenets is to cut expenses mercilessly on things you don’t care about so that you can spend generously on the things you do. It’s an idea I find very helpful with making saving and spending decisions.
We don’t value eating out very much and rarely do so (maybe once a month, if that). We also buy very little meat, dairy or alcohol…so our food budget in general isn’t very high, even with my fresh fruit and veggies obsession.
I do like spending money on experiences and without regret spent 4 figures on two concert tickets to a show I am very much looking forward to.
Maybe thinking about what you like most during travel and spending towards those things whilst also cutting down on expenses during travel that you don’t value as much will help you feel better about the overall plans?
I think the word I keep coming up with is uncertainty.
I think it’s hard to plan when everything seems to be uncertain.
I like to be optimistic and I like to be hopeful. But it’s hard when it feels like you can’t be sure what’s going to happen next week, definitely not next year.
I don’t like feeling off kilter and that’s what I’ve been feeling.
We have one trip planned for this year. That’s all I can get my head around and I don’t want to plan any more trips and we’ve procrastinated our home renovations as we are feeling that we can’t look forward too much.
I don’t think everyone feels this way but there are plenty that do. We will see what the near and far term future holds.
So much good convo today. I have lots of thoughts.
I also like Ramit Sethi and agree about the title. I think his demeanor reflects his Stanford master’s in sociology. He tries to get people to understand WHY they spend money (or don’t). If anyone is interested, here’s a fave episode that resonated with me and might speak to some of y’all. This couple has more than $4M but is still white-knuckling it. Why are they still sweating the cost of an entree at a dinner with friends? I don’t want to be that cheap. I don’t have $4M, but I used to have their mindset.
@jym626 Yes, my travel bug has been dampened. No interest in crossing a border. Afraid that I’ll be profiled, because of my appearance and name.
@beebee3 The fluctuations in the market have given me some pause, but I feel like we are on the right track so I definitely SWAN. I had a convo with a bff, and she panicked at the downturn. I mean, crazy talk. I tried to calm her and persuade her not to sell stocks and then put a bunch under her mattress. That convo made me realize how good I felt about our plan. I can see that she doesn’t have enough money in cash, and that’s the source of her stress. We have more than two years of expenses liquid. Truthfully, because we have two pensions I didn’t think that we needed that much in cash, but I am thrilled in this climate that we do.
My heirs know that we would rather give them gifts now, and watch them enjoy these gifts, than to bequest them anything when we die.
We told our financial planner that our goal is for the second of us to die with $10 in our accounts. The kids will still have a house and cars to sell…unless we sell them prior.
We are very generous with our kids now…because we want to be, and we can be.
An inheritance for them will be a bonus…if there is anything left.
