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Where should I go for advice regarding my 401(k), IRA, brokerage, and cash flow?

I just inherited a lot of money and I'm now trying to understand how to invest it.  Who helps me look at EVERYTHING? Investment companies don't want to think about your 401(k) which is very significant. They want you to hand them over $250K or more and let them manage it for a percentage. The fee based planner I went to didn't sound great and wanted $2,000 for a 'project'. It seems to me like once I sat down and truly looked at what I want my cash flow to be, when I want to retire, if I should continue to max out my IRA and 401(k) and not pay off my house, and my risk aversion, etc., that I've already got a lot of things done. The rest is just actually picking the funds. Can I do this by myself or have I gone mad? Should I just keep meeting with fee based planners until I like one? Some of the financial people I have spoken to are rather disparaging of a fee-based planner.

Investing, Choosing an Advisor
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July 2017


You’re one of many who came to me had the similar experience.  You are open to learning from a pro, but you have the trouble to identify who has the knowledge you need, earns your trust and hard-earned money. 

The very fact you posed the question on this platform tells me that you are comfortable with technology, which opens up the entire world for you (if you decide to retire in a different country, other than the U.S., you may need an international CFP to plan the overseas tax & local arrangement).   You’re not limited to a local planner if you can’t find a good one.  This demands a due diligence or up-front homework from you to find the right planner whom you believe and trust.

Secondly, many people mistakenly think financial planning or financial planner only deals with the investment.  That’s really an understatement  of what a true planner can do, considering investment is only one seventh of one’s financial life; the others include cash management, education, estate plan, risk management, retirement plan, and tax management.   One can’t possibly think the success of investment along will decide one’s security and comfort in the retirement.

I just wrapped up a comprehensive financial plan for a client who has no debt, with $1.6 million in rental properties, and also received $2 million divorce settlement.  Would you think that client’s retirement is settled? Well, if your retirement living expense is only $30-50k per year, may be.  But, with a goal of $150k/yr. annual living expense, plus many other wants and wishes, that client only had a 52% possibility to reach all of the goals.  To show the client investment alone isn’t the solution, I did a scenario that investment every penny of the $2 million divorce settlement to a 100% stock portfolio. Yes, the return was high, but it only improved the probability by 12%, to 64%. 

Would you feel confident of knowing you only have 64% chance to succeed all of your planned dreams and goals for the retirement?  I wouldn’t.  The point is you may think investment is easy—who does not know how to click a button to buy and sell a stock/fund? With 8000 mutual funds/ETFs, which one is the best for your needs? Also, just because the funds rated high today, can it guarantee the future success? Most likely not.  You need to have a professional who’s there monitoring it for you and ready to dump a possible deteriorating fund whether it’s because of an experienced manager retiring with no successor in sight, or the fund is too bloated and caused the returns suffer.

What about tax? You can do it yourself, but when the time comes to call your financial institution for a tax question, the most likely answer you hear is “We don’t give tax advice, and you need to consult with your own local tax advisor.”  So, you call a CPA, who’re great at crunch numbers and you may only meet once or twice a year.  Unless you know what to ask, many don’t volunteer to give you the answer or the most tax deductions you need because they don’t have the time to listen to during the tax season.  The lack of knowledge in tax will cost you, and you don’t even know it until the time comes--you receive the letter from the Social Security Administration informs you that your premiums for the next year go up.

The long-winded answer is everyone needs a financial planner on his/her side, but you decide how much the services you need from the planner and value/compensation that planner deserves.  Besides the fee-based planner, there’re hourly services or retainer-fee compensation models to explore.  Best! 

July 2017
July 2017
July 2017
July 2017