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The Retirement Planning/ Investment/ Savings Thread (3 Viewers)

Does anyone use a financial advisor from personal capital? I've had a few meetings with them but am hesitant on pulling the trigger.
 
inca911 said:
Sharing an opportunity with those of you looking for a fantastic short-term inflation hedge. As of 02May, the current variable interest rate for Federal Series I savings bonds is 9.62% for bonds purchased from May-Oct2022. The interest on these bonds is compounded semi-annually. Inflation this year is estimated to be nearly 9%, which is why the Series I bond has such a high variable rate (i.e., the variable bond yield is based on the Consumer Price Index). You cannot access the money during the first year from purchase, so your money will be tied up if you go this route. If you redeem the bond during the first five years (i.e., after the locked 12 month period), you forfeit the most recent three months of interest to do so. That said, this was a no-brainer for me rather than have additional cash in my bank account. I forego being able to access it, but I have enough buffer to not need it for at least 15 months.

My current plan is to hold at least 15 months to gain the high interest rate advantage, rather than have excess in a low interest savings account. Reminder that this is not a liquid asset. While I do expect the variable rate on this bond to come down fairly quickly (i.e., anticipating really only earning ~4.8% for the first six months period before it adjusts), using this federally-backed option certainly merits a look.
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Is there a limit on these Forrest?
 
CraigT78 said:
Does anyone use a financial advisor from personal capital? I've had a few meetings with them but am hesitant on pulling the trigger.
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Are they fiduciaries? Do they practice parallel investing (do they buy what they promote)?

If the answer to either question is “no” then run, don’t walk, from them.
 
inca911 said:
Sharing an opportunity with those of you looking for a fantastic short-term inflation hedge. As of 02May, the current variable interest rate for Federal Series I savings bonds is 9.62% for bonds purchased from May-Oct2022. The interest on these bonds is compounded semi-annually. Inflation this year is estimated to be nearly 9%, which is why the Series I bond has such a high variable rate (i.e., the variable bond yield is based on the Consumer Price Index). You cannot access the money during the first year from purchase, so your money will be tied up if you go this route. If you redeem the bond during the first five years (i.e., after the locked 12 month period), you forfeit the most recent three months of interest to do so. That said, this was a no-brainer for me rather than have additional cash in my bank account. I forego being able to access it, but I have enough buffer to not need it for at least 15 months.

My current plan is to hold at least 15 months to gain the high interest rate advantage, rather than have excess in a low interest savings account. Reminder that this is not a liquid asset. While I do expect the variable rate on this bond to come down fairly quickly (i.e., anticipating really only earning ~4.8% for the first six months period before it adjusts), using this federally-backed option certainly merits a look.
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Fair option for shorter-term holding of assets that you don’t need immediately yet want to lock in a return and limit risk.

If you check all those boxes this is a solid place to put $10k.

That said, you can probably get a substantially higher return in equities in that time frame if you can tolerate a slightly higher risk level. Lots of beat up names right now that will be higher in 12-18 months.

I think. ;)
 
CraigT78 said:
Does anyone use a financial advisor from personal capital? I've had a few meetings with them but am hesitant on pulling the trigger.
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I paid a flat fee to an experienced local finance guy for a confirmatory review of my financial strategies. Took some time to find someone who appeared qualified and amenable to an agreement that didn’t take a cut of my entire portfolio. I couldn’t convince myself that it was too complex to figure out on my own, and after a bunch of time invested educating myself, I believe I’m +EV doing things on my own. I’ve probably missed some opportunities, but don’t think they’d have paid for the external costs.

My Series I investment was funded by cash that was literally doing nothing sitting in a safe.

Looks like with the new job I missed about a month of posts in this thread, will catch up on those shortly….
 
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BNM said:
Are they fiduciaries? Do they practice parallel investing (do they buy what they promote)?

If the answer to either question is “no” then run, don’t walk, from them.
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They are a fiduciary and they do not sell product (that I'm aware of) they just manage my portfolio. The upside is they manage my 401k, my IRA, my brokerage account, and my wife's IRA.

Our review was that we were heavy in several sectors. We already have a mismash, my 401k is managed by fidelity, I self manage my IRA and brokerage, and my wife has a family financial advisor managing her IRA.

I'd like to consolidate and ensure I'm taking advantage of all opportunities to retire at our goal of 54 and 55.

Their fee starts at .8% and scales down the more I'm worth.
 
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See if you can find a fee based advisor rather than a percentage. 80bps is a little high IMO if you have $250k or more. I would rather pay $ thank a % for advice.
Good luck, thanks for the tip Forrest
 
BiGGyT said:
See if you can find a fee based advisor rather than a percentage. 80bps is a little high IMO if you have $250k or more. I would rather pay $ thank a % for advice.
Good luck, thanks for the tip Forrest
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If my portfolio is being managed and is making me more than I can make myself, is .6-.8% not ultimately worth it?
 
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Point being, the more you have to invest, the better a fee based advisor is for your bottom line. If you spend 5 hours at $200/hr, that is better than .8% of $250k (which is $2000 vs $1000)
 
Let me add, I rarely see active managers actually beat the s&p500 over 5-10 years . I work on over 500 qualified plans with over $1b in assets, so while I am not an advisor, I see the results.
 
BiGGyT said:
Let me add, I rarely see active managers actually beat the s&p500 over 5-10 years . I work on over 500 qualified plans with over $1b in assets, so while I am not an advisor, I see the results.
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^^^This x1000^^^
 
BiGGyT said:
Let me add, I rarely see active managers actually beat the s&p500 over 5-10 years . I work on over 500 qualified plans with over $1b in assets, so while I am not an advisor, I see the results.
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+1 and time value of money on any % fee will grow over time.

LWT with John Oliver did a good episode on managed find retirement plans.

 
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Here is another visual of the impact of fees on an example investment. “Fee” could refer to a fund’s expense ratio or the added management cost of a certified financial advisor (and elf spotter). Fees are bad. I do believe setting up a good financial infrastructure for your money is likely worth some cost, just not one that takes a percentage of all your assets every year.
B00657DE-91A4-4D8E-84CC-4C8E36B55844.png
 
The "best" professional financial advice is priced by the hour not as a percentage of assets. Maybe you do see your advisor once or twice a year. Rarely more under special situations. Most of us shouldn't be spending big money on this because your situations are not that complicated.

There might be special circumstances for ultra-high net worth families, but in general you aren't getting good value from anyone getting paid a parentage of your assets for advice. The advisor is selling his / her time. They should charge by the hour, maybe with a one time set up fee for a deep dive into your finances. Think of them like a law firm or an accountant. Someone asking for a percentages of your net worth as a fee likely is overcharging you by a lot.

Hold onto your wallet. Some of these firms are pretty slimy. -=- DrStrange
 
For those who may be interested, I put together a basic slide deck for a young guy at my work who overheard advice I was giving a friend. PM me with your email if you would like me to send you a copy!

As a Myers-Briggs INTJ:
"INTJs are passionate when it comes to learning, as well as being able to teach others, since they want to be able to spread information as best they can."

Many of you already know this about me from my meetup OFCP/circus evangelism. ;)
 
I'll be referring back to this thread and likely contacting @inca911 in the spring of 23 when we have open enrollment. Just this year it's been on my mind quite a bit that I need to be investing my money properly for the future. I have a 401k and an HSA. Neither are maxed at the current moment. I also need a little more education on a Roth IRA before setting one up
 
FordPickup92 said:
I'll be referring back to this thread and likely contacting @inca911 in the spring of 23 when we have open enrollment. Just this year it's been on my mind quite a bit that I need to be investing my money properly for the future. I have a 401k and an HSA. Neither are maxed at the current moment. I also need a little more education on a Roth IRA before setting one up
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You might research that Roth IRA thing this calendar year. One of the best deals out there.
 
inca911 said:
For those who may be interested, I put together a basic slide deck for a young guy at my work who overheard advice I was giving a friend. PM me with your email if you would like me to send you a copy!

As a Myers-Briggs INTJ:
"INTJs are passionate when it comes to learning, as well as being able to teach others, since they want to be able to spread information as best they can."

Many of you already know this about me from my meetup OFCP/circus evangelism. ;)
Click to expand...

:hearts: my fellow INTJ brethren. I think you have my email already, shoot me a copy as I'd be curious to see your take on things and see if there is something I can learn from it :D
 
Reminder that folks can buy another round of I bonds for CY2023, currently yielding 6.89%. The benefits may be starting to wane on these, but the return certainly beats a bank’s standard checking/savings account. I grabbed another $10k while funding my CY2023 Roth IRA.
 
inca911 said:
Reminder that folks can buy another round of I bonds for CY2023, currently yielding 6.89%. The benefits may be starting to wane on these, but the return certainly beats a bank’s standard checking/savings account. I grabbed another $10k while funding my CY2023 Roth IRA.
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A potential opportunity for the right folks, indeed. Remember, though, the return is totally tied to not withdrawing the money until various checkpoints.

Also, do I understand that you purchased I bonds in your Roth? Are you post-retirement?
 
BNM said:
A potential opportunity for the right folks, indeed. Remember, though, the return is totally tied to not withdrawing the money until various checkpoints.

Also, do I understand that you purchased I bonds in your Roth? Are you post-retirement?
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Not in the Roth IRA, I made two separate transactions to start the new year. I will leave the i-bonds alone for at least 15 months to max their value. No state taxes on I-bond returns either.
 
You can’t purchase I bonds through a Roth. They must be purchased through Treasury Direct….
 
I also added more ibonds this year, though not as much as the last 2 years as I'm looking to put more into equities this year
 

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