<p>I was pretty happy with myself–finally got our family finances in order & decided to go to our stockbroker & figure out how to invest our money. He took the information & said that he’ll process it & then give me a ten-page printout in a few days. Once we get the printout, we can figure out whether it captures everything about our finances & what we should be doing.</p>
<p>I HAD been pretty happy about our situation–hubby plans to retire in about 7 years, after the younger child has completed HS & should have finished 4 years of college. We have enough money to help pay for 4 years of several OK public colleges, out-of-state for each child. </p>
<p>Our broker sent his daughter to UPenn, where she graduated with a double-major in German & International Relations & got a job right out of college in International Banking. He’s very proud of his daughter & son-in-law (whom daughter met at UPenn). Both have great jobs & his son-in-law is going to leave one job as VP of a great firm & start a new job in mergers & acquisitions–really BIG TIME.</p>
<p>Anyway, from our broker’s perspective, it doesn’t look like we’re doing all THAT much to help our kids’ education & we don’t have the $$ to send them to the priciest schools & help them with grad school. He’s also underwhelmed about our limited retirement savings & assets, tho we have a fed govt defined benefit pension with guaranteed Cost of Living Adjustments, as well as guaranteed health insurance that employer will pay majority of premiums. Oh well, it was an interesting meeting.</p>
<p>I guess we’ll wait & see how everything plays out.</p>
<p>Yeah I gave up planning for retirement as soon as I started going into debt at age 20. During my boozing days I figured I was just going to die of liver failure in my late 50s and not have to worry about it. But now that I am sober, it will be fun working into my mid 70s. It was a good ride though.</p>
<p>Exactly barrons! I see grayhairs all the time like lemmings going on cruises to Alaska, winter homes in Florida, drinking coffee at McDonalds, etc and they all seem burned out and/or miserable.</p>
HIMom:
I’m sure you recognize that he’s not about to tell you that you are doing a great job by yourselves – why would you then need his services? Unless he’s a fee-only financial planner, he only makes money when you have a transaction. Therefore, his motivation is probably to make you anxious about your financial future so you turn to him for guidance and buy/sell activities.</p>
<p>If you have a defined pension, it’s not that hard to figure out what amount of capital would be required to generate that income. For example, most financial planners will tell you that you can expect to spend 5-6% of your assets in retirement, and that most people should aim for about 70% of their pre-retirement earnings. Therefore, someone needing $100,000 a year to live on should have $2 million in investments. But that income expectation includes an expense for health care, which you seem to have covered.</p>
<p>As far as educational expenses go, only you and your husband can know what’s best for your family. And you may find you qualify for some amount of need based financial aid at a private college or university. In other words, I’m sure it’s not as bad as it looks on paper – at least you have the courage to look at the data!</p>
<p>Thanks, SJ! Actually, I am not convinced folks REALLY need 70% of their pre-retirement earnings to live on in retirement. I sure hope we don’t, or we are truly sunk, since we don’t have anywhere near $2 million nor a pension anywhere comparable to what we are currently earning.<br>
Our broker gets a salary from Morgan Stanley & is a family friend who has known hubby for decades (literally). He doesn’t need our commission & could have comfortably retired a LONG time ago, but wouldn’t know what to do with himself & loves his job as VP.<br>
We know we’re doing an OK job–not great but now awful–with our money.<br>
Sincerely doubt we will qualify for ANY need-based aid, but are hoping for some/much merit as son has great test scores (NMSF) & good grades; also charasmatic, especially with adults.
Yeah, every once in a while, we stare at our finances & then shrug & keep on keeping on. We do have some investments & will probably want to be a bit more aggressive – perhaps some international & some smaller companies rather than just the huge American blue chips we’ve been in for these decades. We’ll see.
The funny thing is, we’re actually in a better situation than many other folks we know. Scary thought!</p>
<p>HIMom, If you won’t qualify for any need-based aid and have some investments, you are in better shape than almost everyone I know, including our own family.</p>
<p>I read in the newspaper a long time ago an article from a “planner”</p>
<p>Essentially he said that planning for college cost is exactly like planning for retirement, but in reverse. You have a shorter time to do accumulate the $, and a shorter time in which to spend $. If you are short $, you can borrow it at reduce rates for a generous length of time and have the interest deductible to boot. </p>
<p>If you got enough $ for a OOS school, 4 years; Then you are talking close to $50,000. Congratulations. </p>
<p>I’d go to other advisers until you get one that says something different. Only then will you have something to compare. So what if you spent $500 to get multiple opinions. This money is literally so small compared to your college fund and retirement money.</p>
<p>We figure we’ll start with our broker & see what he hands us & discusses with us & then go from there to hear a few other perspectives. He was candid about the possible conflicts of interest, etc. We trust him because he knows us well, has an MBA from Wharton, and is pretty financially conservative.
We continue to ask others about financial advisors they recommend as well & will confer with those advisors until we’re confused enough to make our own decisions. <grin><br>
We know things will work out, it just gets a bit muddled from time to time. Daughter is a sophmore in HS now & will soon be facing college as well. Hubby does want to retire one day too!</grin></p>
<p>I suggest you play around with some online retirement planning calculators and see what they indicate compared to what your broker says. You can do a search on them and try several. The more detailed and precise the input the more valid the results are likely to be. </p>
<p>You can input your desired retirement age, amount of pension benefits, other investments, current income, percent replacement income you want, etc. Some calculators will factor in your exact investments; others will ask for the amounts in investment accounts and then apply an assumed return.
Some will factor in the equity in your home but others do not. </p>
<p>With a good defined benefit govt. guaranteed pension and guaranteed medical care you have a nice solid base. </p>
<p>It’s great that your broker has more money than he knows what to do with and that his D and her H are on their way to the same position. But “enough” is enough, IMO and your goals and dreams may be different – and even more satisfying. </p>
<p>If you have funds set aside for the kids’ colleges and they are sufficient for out of state publics you can keep that money out of the calculations. The kids can take care of grad school on their own if they want that, IMO.</p>
<p>In any event, playing around with some numbers on your own may help you feel more comfortable and better able to discuss your broker’s recommendations. </p>
<p>my oldest is a senior in college and will finish up with less than 5000 in loans. my youngest is a senior in high school and i thought we had a couple of years tuition set aside, so i was feeling pretty good about things. now that he is planning on attending a private school; i find it hard to sleep with all the numbers running through my head. tuition, housing, travel to and from school, retirement, mortgage! yikes! my husband finally told me to live in the moment for a while. my oldest is extremely happy and ready to graduate–my youngest is in the middle of a state-championship football run–he will be playing football at a wonderful school next year, they’re healthy, they’re happy and i need to just let the worry go away! he’s right. things will work out. it might not be as easy as i thought it was going to be–but the opportunities for my kids far outweigh my anxieties! so, here i go, headfirst into just enjoying the moments! (who wants to retire anyway?)</p>
<p>It’s too late for us, but if I had the option now, I’d have both kids in college at the same time. As it is, we’ll only overlap for one year. The nice thing is that the EFC is essentially divided in 2 (ballpark). If you do any online EFC calculators, you’ll see what I mean. </p>
<p>Also, as others have said on CC, you may be surprised at the actual cost of attending private vs public university. Depending on what other F/A offers a student has, there is the possiblity of negotiating aid. Our EFC from the FAFSA suggested that we had the proverbial snowball’s chance – yet, when one school offered a small need-based grant (back to the way colleges mix Merit with Need), the other top schools my son was considering met that amount. While not huge, with other scholarships/gifts for graduation, it covers some portion of room and board.</p>
<p>Thanks JY! The calculator was helpful & will let me sleep at night, showing that our financial situation is actually quite a bit better than I felt after seeing the broker. It’s always good to have some concrete affirmation!</p>
<p>Speaking as one of a pair of “grayhairs” (charming set of stereotypes up there!) about to retire while our son attends college on scholarship and without having worried ourselves to death over savings, try to relax a little. It sounds as if you have an awful lot more than we do (including someone to pay for your health insurance!), and we’re happy. If you find you don’t have quite what you thought you needed, reduce your needs, and you’ll have plenty. It really works, honest! </p>
<p>Brokers are there to make you worry yourself into buying their services. Ours never did a thing for us except lose our money, so we stopped giving it to him!</p>
<p>Actually, hubby’s employer will pay part of his health premiums but the good thing is they can’t cancel us for any reason. Actually, I believe our needs are pretty simple.
Not sure what I think of brokers or consultants–they seem a mixed blessing/curse. We actually pay very little attention to finances in our home, but it seemed like something we need to pay attention to at this point (something we do look at from time to time).
I know things will work out, but since we will have to be making some choices, it is good to have the info we have as well organized as possible so we can make “informed choices,” whatever that is. <grin></grin></p>
<p>My mom got an invitation to a financial planning dinner that we’re planning to attend & see how it goes (no obligation).</p>
<p>HImom,
Wow, that is interesting. H & I are planning for a young retirement in the next 3-4 yrs. And, both of us have defined benefit plans. With 30+ yrs of svc for each of us, he will receive over 70% of his highest average 12 month salary…mine will be significantly less at 58%. I, too, believe that our expenses will drop significantly with 1 of 3 children out of college…although I would be willing to prolong the career for an addl 2 yrs if D1 decides to attend grad school. Somehow, luck has been on our side…and “something” always happened when we needed it to continue sending them to private school…although we did scrimp and save a lot when they were younger. But, it is our legacy to them. Each of the children are spaced 3 to 4 yrs apart…so, I was pretty agressive with my investments 19 yrs ago (with only 1 child) when the biotech industry took off. I think that really got us off the ground…and peaked my interest in the stock market. I was just commenting to H about what would a reasonable portfolio (for us) should total in 3 yrs. So far, I’ve done this on my own without the help of a professional. Maybe when the time comes, I will check with H on how comfortable he would feel about making an appt with his uncle–a VP with Shearson-Lehman! But, good luck to you and your future plans!</p>
</p>
It’s always good to have some concrete affirmation!</p>