A "planner" who controls your funds is just a salesperson.

We are gathering info for a review from a fee-only planner , member of the Garrett Network. Fee-only. No account with him. He'll look at insurance, mortgage, expenses, all accounts. He recommends our current Schwab and Vanguard accounts, and we'll look at the 401K which has limited options for investments.

Fee-only. No control. No annuity sales.

Will let you know how it goes, but it's worth it to us to spend some money now (should be under $2000) as we prepare for (possible) retirement in 5 years, even tho my husband may continue working.

Here's my view, some share it, some don't.

Unless you work in a situation where making a substantial amount of money is periodically possible (starting and selling a business, building and selling properties, etc), a retirement nest egg will result only from making the effort to consistently put away savings for that purpose over the course of your working lifetime. These would be savings that you don't touch for other purposes (not for buying a house, not for kids' education costs, not for making other investments, etc.). Taking advantage of tax-favored vehicles as part of this plan is useful and can help lead to larger accumulations but isn't essential.

Once you start to build this fund, forget about the quest to pick the right stocks or hire the world's smartest adviser who makes only good suggestions. These won't happen and don't exist.

An adviser will help you determine needs, lay out a plan, and help you assess progress along the way. The best investment strategy is to protect principal, beat inflation, and balance risk and reward by having an portfolio that's age and risk/reward appropriate. Nothing more. What the good ones do isn't rocket science, it's basic financial analysis.

If you're expecting your investment returns to provide for your retirement, you'll be disappointed. What will do so, however, will be the effect of consistent savings and reasonable investment returns from a diversified portfolio over a long period of time. Be alert to fees in the underlying investments, you can pay more for some things and not necessarily get more, it can make a big difference on how much you accumulate. Aim to have lots of bunts and singles and no home runs.

Good luck.

We use a CFP firm for our own, and my MIL's, portfolios. I did all our investing and planning for four decades before getting tired of it and turning it over to the firm.

When you say, "they don't know where the money is", I'm curious as to what you're expecting them to say? Even when I handled our portfolio, since we were limited to the funds offered by the pension fund mgmt, although I researched and changed allocations as I thought best, a couple of months afterwards I couldn't have necessarily told you the exact name of each fund.

OTOH, I could always tell you what sectors we were invested in, in what proportion; and I still can. I go over the quarterly reports from the CFP firm the same way I did our reports from the pension fund's investment manager. But I don't read the 10Ks or 10Qs; never have.

I think you need to decide if you are looking for a financial planner or a financial investment manager. A lot of people think they're the same, but they're not.

If you are looking for someone to examine your financial situation on an individual and holistic level - IOW, from your total insurance needs (life, health, homeowners, auto, LTC, etc.) to your retirement savings, personal goals, and estate/tax planning needs - that's very different than just asking someone what sectors you should be investing in to diversity your portfolio.

Someone like sushipup is quite unusual, thinking 5+ yrs ahead of planned retirement age. That's good financial planning. I can't tell you how many Boomers we know that only want to talk about retirement issues when they're a month away from their targeted date!

Good financial planning ALWAYS involves RE. If you have a mortgage you'll need to take into account the loan repayment and home maintenance as part of your ongoing overhead. If you are mortgage-free, you'll count it as an asset but need to consider liquidity in case of emergency. RE isn't always the quickest to liquidate or obtain a loan against, for example.

Financial planning is intended to give you a plan, on paper, of how to get from point A (where you are) to points D, E, F (medium- and long-term goals). You can pay separately for a financial plan and execute all the steps yourself. A lot of people do. OTOH, a lot of people procrastinate (I do, too) so having an actual relationship with someone who will bug you about Getting Things Done can be very helpful!

A solid financial plan involves asking the "What if?" questions. What if you no longer have two incomes as a couple? What if you lose your job and can't find one for a year to 18 months? What if one of you is disabled? What if one or both of your parents needs financial help or actual physical assistance? There are so many things we don't like to think about, but they are risks, genuine risks that can adversely affect our chances of successfully reaching our goals.

>>What is your financial plan for your future income without a paycheck.>>

Well, everybody's got a paycheck of some sorts - Social Security, welfare, or whatever. The question I assume you're asking is "How do I replace my regular paycheck?"

You always need to know what your baseline is for monthly living expenses. Some people are meticulous about this; most aren't. But you have to start with being honest (or your retirement #s will never work). What does it take for you to cover the basic necessities of your current lifestyle?

It's different #s for everyone. I consider insurance to be a basic necessity but most people don't. So our baseline for monthly expenses is a specific #. Beyond that, it's discretionary spending. When you're trying to save extra $$$, that's the "pool" it comes from.

In retirement, your tax brackets may change. No one knows what will happen in the future, so we just assumed we would be paying the same or a little bit less taxes. As it turned out, we are paying quite a bit less, as we don't pay SocSec or Medicare taxes any longer. We're still not Medicare age so we have that planned for under future overhead, not current.

On the asset side, we have:
- DH pension with annual COLA, 100% assignable to me when he dies
- IRA portfolio (currently not taking distributions)
- US Savings bonds (now need to be cashed in as they've matured)
- My pension/annuities (from 3 companies where I was fully vested), no COLAs and not assignable
- Low-cost comprehensive healthcare coverage
- Future SocSec at age 66 for both of us
- Home is paid for, in good shape
- Autos are paid for, in good shape with low mileage

On the debit side, we have:
- Basic overhead costs plus inflation
- Any large purchases, such as solar (which we did in 2014), new car, home remodeling or emergency, etc.
- Any classwide-increases in LTC insurance costs (we each have a policy, and increases will probably continue to occur periodically)--but if benefits are activated, premium payment is automatically suspended
- Danger of earthquake (although we have insurance, the deductible is huge on these policies, close to six figures)
- Medicare premiums when we need to sign up
- WEP deduction on DH's SocSec amt with the full 60% penalty
- Modest equity line outstanding on home

Your list will be different. It's hard to assign absolute figures to many of these, which is why our figures really didn't "firm up" until a few years before actual retirement. But we started planning in our mid-40's, and both of us credit that comprehensive financial planning with enabling us to weather several unexpected "bumps" (including the 2008 Great Recession, my unexpected early retirement, and a massive 100% phased-in increase in LTC premiums) without difficulty.

It's possible to do your own financial planning. Nothing's that difficult, except for the area of risk assessment. But risk is such a critical factor, it's why I usually urge people to consult a professional. Most people are very poor at assessing how much risk they actually have in their lives at any given time. And if you've never had much experience with assessing personal health mortality vs morbidity, that also requires some work.

Just off the top of my head these are all the things I wish someone could have told me when I was 46! Sorry for the length, but HTH a little.

Go to your public library--read a good variety of basic books on investing and financial planning. Not just one person's "plan". Commit to regular contributions to whatever plan your employer offers. Choose index funds with low expense ratios (Vanguard). Be sure to have an emergency fund. 25 years ago I realized that I would have to take care of this for myself, and this is how I did it.
Good luck, and don't give up!

The very best investment advisers work on Wall Street (I mean that figuratively, not literally). They run funds and manage the investment portfolios of the wealthiest individuals and companies/institutions. They have the best tools, the best information, extensive research resources and the best handle on trends and consequences. The majority of them don't produce results that are better than overall market indicators and many do worse. Some do better than others at times in investments open to the general public. For that information, check Morningstar ratings.

Financial planners that handle small fish individuals produce investment "advice" because people who pay them expect them to do so. They do nothing more than guess or follow advice they're read. And the funny thing about advice they've read - if there's an article tomorrow in the Journal saying that the timber industry is on the verge of record profits, there will be surge of investment in the timber industry, driving up investor prices and reducing investor returns. Which is to say, public information is usually speculation and anyway is of limited value.

FYI, jkom, on a balance sheet, an "asset" and a "debit" are the same thing. If you want to talk about liabilities or things that are negatives to your wealth, those are "credits". In everyday speech, I understand that the term has the opposite meaning than when used in a financial sense.

My question is really how many of you do your own investing. My DH invests about 50% of our money in stocks and the other 50% in real estate investments. He is financially wise, has a high interest in business and personal finance. I do wonder what I'd do if he died tomorrow. I might buy a triplex to hold for rental income, but no more than that. Right now he is building two spec homes, I'd never do that. I'd probably put my cash into some preferred stocks and index funds until I got my grounding. After that, who knows. I should do more planning.

I'm in the "future" I planned for my whole working life (retired at 55) and after. Best thing ever to kick start my financial plans was investing to the max when the 401k and 403(B) were widely offered back in the early 80's. The employer match was a real bonus. My company already did have a non-contributory pension benefit - which I am getting now as well as the employer sponsored group health coverage along with Medicare A & B.

All along the way, I cobbled together funds to buy Treasuries whenever I could. At one time, they did pay a really decent interest rate. As the interest rates dropped, I let the Treasuries redeem themselves at maturity and used the funds to buy municipal bonds. I didn't have a financial planner (although have always had a broker) since my parents and siblings were financially astute and successful and only too happy to give advice. I also looked things up and did a lot of reading. Real estate, as in owning multiple properties never caught my interest.

I trust my broker and she's done well for me. At one point, I was bond heavy but had a few blocks of dividend paying stocks. We cleared out much of the cash pile up in the money market and diversified by adding dividend paying stocks and some limited partnerships.

Have a house with no mortgage, no car payments, 0 credit card debt. I don't live off my investment portfolio as I do get my pension and Social Security - in a few years I'm going to have to start taking distributions from the rolled out into a traditional IRA 401k.

Have done and am doing what I can do to be financially self sufficient. Just glad I started early.

Our concerns concern starting mandatory withdrawals in 3 years, whether my husband continues to work or not. I (I've done all the investing so far) have treated each account as a whole, two IRAs, a 401K and cash/investment accounts, instead of looking at the entire block as an entity, and making investment decisions on a larger scale. We are using index and exchange-traded stock/bond funds for the most part. Real estate, other than our home, is not part of our investment portfolio, because we learned many years ago that we are not happy acting as landlords.

We have no pensions nor any help with Medicare B and D and supplement coverage, so these are not insignificant expenses to budget for in the future.

We just need to start taking a long view of our assorted assets and accounts. It's in pretty good shape, just needs a good review.

Yes, you can do your own investing. It just helps to have some education and feedback and common sense. I would not be happy with a broker making the decisions for me.

Most so-called "financial planners" are actually salespeople for mutual funds or insurance.

Despite their vaunted depth of financial knowledge ... about 80%+ of the time the funds that they manage don't do as well as the sector of the market in which they operate.

Many fund managers charge 1.5% (or more) paid from the central fund annually for expenses (in Canada it's 2.5% or higher) ... which is a major part of the reason that their results are, to say the least, mediocre.

Exchange-traded funds (ETFs) deal in various sectors of the markets ... and charge much lower management fees, usually about a half of one, to one percent annually.

Study some and you can most likely do better, yourself. I've been subscribing to a money management magazine in Canada that carries no ads, so is totally subscriber-driven, so sponsor seminars with the folks who write the articles (and there's a contact point at the end of most articles, with the writers often replying to non-frivolous messages).

Plus, in about 40 places in Canada, subscribers get together. I've been attending our local group of about 18 - 20, monthly for about 12 - 15 years: learned a lot and made some knowledgeable, loyal friends.

I sold mutual funds, on commission, just over 30 years ago, but supervisor figured I couldn't sell and I was "decommissioned". Haven't bought a mutual fund in over 25 years.

Bought some core stocks almost 50 years ago, 35 years ago, etc., which paid a reasonable dividend ... which usually grew, over the years. While the rate of return on current stock price is important ... so is the rate of return related to the original cost. Major Canadian bank bought 48 years ago $4.17, paying 10 - 12 cents at low tax rate, grew to $107., paying $3.08, at even lower tax rate, then raised to $3.48 (almost 10% of my original share price) then stock price slipped to $40.00 or so, recently recovered to about $100, I gave part of it to charity, (get tax-deductible receipt for full amount, pay no tax on the capital gain). Dividend recently raised to $4.12 ... I figure that if I can stay alive a little longer ... it'll be paying me each year the $4.17 that I invested 48 years ago (when a dollar was "worth" [whatever that means] a lot more than now). Ten/twelve cents annual payout growing to $4.12 is a pretty good rate of growth, I figure. Plus - haven't paid any manager, or whatever, a penny (oh, right - no more pennies in Canada; O.K. - a nickel) in any of those 48 years.

Over the years that magazine has offered several suggested stock-based programs that have produced excellent long-term rates of growth ... at a few hours time invested annually.

Good wishes as you build your investment plan, and get started on its implementation.

The best time to start - the day you were born.

The second best - today (if you haven't before).

Learning how money (and tax) works - an excellent hobby, that pays well.

ole joyfuelled

When I married my husband he had rental, that is what gave us a real boost in savings. I took it over as soon as I was comfortable in my new marriage. I also took care of our money. I was always afraid of losing our life style so I made sure we paid off every sooner than most people do. I also kept us out of debt. We were so saving so much that when he retired our income was about the same as we were living on before retirement.

My husband and I are fully invested in real estate, since that is the industry we are both in and are comfortable with the risks and rewards. We have no interest in trusting our money with a financial planner since we're not familiar with the stock market ourselves.

"What is your financial plan for your future income without a paycheck." Not to out live my money.

bobleilani +1. Exactly the same here except as a sideline, we've been periodically gambling on our ability to buy small run down businesses (well one at a time), ressurecting and selling them at a profit. I say gambling because in early days we used equity in our home to buy businesses; very risky and really hard work and unfortunately relying a lot on luck and my ability to manage finances. So far so good, it could run out one day; would not recommend it.

Many have said, "No one cares as much about your money as you ...".

After taking the courses that stockbrokers take, in my mid 50's I spent a year selling mutual funds, on commission, with poor results (i.e. "sales"), as I felt that clients would grow to value my advice and invest with me as their confidence grew ... but the second supervisor above me "decommissioned" me.

I continued in that field, as I enjoyed it and figured it to be a useful game, needed by many, and took further training. I was selling no financial systems, offering consultation only, on a fee basis. One fellow who'd done that prior to beginning to sell mutual funds when I did said that it was a good way to starve ... and I somewhat agree.

After some time I added an amendment to the above,""No one cares as much about your money as you ..." ... " ... except someone who'd like to move some of it from your pocket into his/hers".

ole joyfuelled ... who lives frugally mostly on pensions: the investments are "play money" until/if needed for care near the end of life ... and potential residue for kids and charities

Made many financial mistakes in life but isn't that what life is about? Learning from your mistakes. I have invested in mutual funds, ETFs, stocks and bonds. I have become smarter over the years and now have my money in Vanguard Admiral Funds - low expenses ratios. It is the expense fees that will eat up your retirement and brokerage accounts. Most of these fees are hidden and once you find out how high they are than research other brokerage firms. Hopefully, it will lead you to Vanguard funds or low fee funds at other brokerage firm. No, I don't trust any financial advisor to handle my money. I read and research to learn as much as I can about investing and saving for retirement.

I think Snidely's first post above says everything you need to know about this subject. The only thing I will add is that there are many types of financial advisors. I am a Certified Financial Planner (CFP) mostly because I was already a CPA with my series 7. I have never sold services or advertised as a CFP, mostly I talk to students for free about the stuff. A fee only CFP can be a great use of both your time and money. Basically they are just teachers, they get no money from you after you leave, they look at your finances and educate you on money management, insurance, retirement, and investments as it pertains to your specific financial situation. A successful CFP may only see clients 5 times in their entire life, they are only needed when financial questions arise or circumstsnces change. The downside is that most people would rather see a commissioned FP who they don't pay up front. I have a real problem with this arrangement, that upfront savings is too rarely a good investment.

I am very happy finding this thread as in my mind, the contributors here are all financial astute.

I have a few questions need your insights as I feel I am missing something.... May be the problem is that I cannot fully appreciate the thought process and risk aversion/concerns of a retiree as I am not retired yet.

1. How could we tell if we are covered for future? I know many financial sites offer retirement planning tools, I use the one Fidelity Investment offers that has many options and tons of "what if scenarios". Are the results/outcome from these tools valid?

2. A coworker mentioned that Vanguard offers financial plans. Has anyone ever use this type of planning? if you have, I would appreciate your inputs. Or should we use a fee based financial planner?

3. calling bry911,

I have been thinking about the advice you provided in the 'Own or Rent tread'..."Of course, you are also hampered by risk aversion, you should not invest the same way you did when you were 30. But there are several safe options out there that will allow you to grow wealth safely considering the ultra low rates right now."

If one has a paid for home, and living expense (tax, insurance, property maintenance and tax..etc.) would be fully covered by pension and SS, why a 60ish person could not invest as a 30ish? as most of us when in 30s, we save for retirements and kids' college fund..etc, now these type of saving goals are out of the way.

I am interested in the "several safe options" you mentioned.

Being in high tech field, I have been blindly investing in companies/products I personally like ( mistakes such as I like gizmos and hate bonds). Over the years I have built an aggressive equity portfolio, I know I need to dial down to moderate and balanced one, but I am not sure how to change that.

Thank you in advance for anyone who would offer any suggestions and inputs.

>>My (OP cmarlin20) question is really how many of you do your own investing.>>

I think most people do their own. It's generally the higher-income folks who use professional advisors, because they're not cheap to use. Other barriers for the middle-class folks are: most don't have investable portfolios big enough to qualify for that $500K minimum (even if you've got a healthy 401k or 403b, you can't move it away from the employer's fund mgment until you retire or terminate); also, the more successful CFP firms tend to proud of not doing "hard marketing" but get most of their business from referrals.

Plus they also specialize, so you don't waste your time calling CFP firms that handle only accts worth $5+M when you've got a lot less than that to bring to the table, LOL.

That's how we found the CFP firm we use - I knew a CFP and contacted him for advice on how to find one for my MIL, explaining our parameters. He gave me three names and also called them up to make the introduction. We would not have found them otherwise.

I have to admit I did chuckle at bry911's remark about "...A successful CFP may only see clients 5 times in their entire life". We meet with our CFP at least twice a year! I love 'talking shop' with him since most of our friends and family are functionally investor-illiterate.

@ azmom - I am going to answer your questions somewhat out of order, and this is going to be a long post. Sorry.

First we need to establish that everyone knows what a stock price is. Many people think that a stock price is a representation of the value of a company. It is not. A stock price is the present value of expected future cash in-flows. As a hypothetical, if a company were started that said from the beginning they will never pay a dividend nor will they cease operations until bankruptcy, then the stock value, regardless of the company's balance sheet, would be zero.

The second thing to establish is the idea of risk and reward. There is no such thing as an investment that is too risky. There are just investments that are too risky for the return they offer. An investment with a 90% chance of total loss may still be good if the upside is 20 times your original investment. If you could get enough similar investments then ideally you could make great returns.

And finally - the great equalizer - the market can stay irrational a lot longer than you can stay solvent. This happened in the mortgage crisis, everyone knew we were on a real estate bubble and we just stayed there. For years and years and years parts of this country sat on a real estate bubble and a lot of people who bet against it too early lost a lot of money.

Now on to answers and opinions.

I have been blindly investing in companies/products I personally like ( mistakes such as I like gizmos and hate bonds). - I am a big fan of something called efficient market hypothesis, which you can google for a more detailed explanation. I have some peers who swear by it, while others don't like it, but one apparent truth is, investing as if it is true leads to more successful investing. It basically says that you can't beat the market without some type of insider information. Given this I avoid investing in specific companies whenever possible, I personally identify my risk appetite and invest in different segments that meet the criteria. Even though I have a healthy risk appetite I mitigate losses through diversification in sectors and among sectors.

Over the years I have built an aggressive equity portfolio, I know I need to dial down to moderate and balanced one, but I am not sure how to change that. - You simply move your risk appetite down a little. I am personally not a big fan of bonds either, so I avoid them, but there is nothing wrong with moving from emerging markets and small cap to mid and large cap.

If one has a paid for home, and living expense (tax, insurance, property maintenance and tax..etc.) would be fully covered by pension and SS, why a 60ish person could not invest as a 30ish? - A risk appetite is a personal thing, but generally if yours doesn't change you probably were a little too conservative early. As you age your risk appetite generally shifts from generation to protection. Sometimes, because people have more money than needed, they will develop a split strategy, where asset protection is a goal for a portion of their portfolio and significant asset generation is a goal for the portion. But, when investing, there is no substitute for time in the market, the cumulative returns of an additional 3% reward over 40 years is just more powerful than the 3% reward over 10. Sometimes the extra money is just not worth the extra risk to get it.

I am interested in the "several safe options" you mentioned. - So to be honest, I am not the best person to ask about safe options. I can and will find some for you if you would like, but send me a message and I can ask you some particulars about your situation. As a professor the people I usually give financial advice to are 20 years old. And my personal portfolio has so much risk that even my students cringe at my investing. I have a significant amount of money in the ForEx, mostly because I like doing the work that staying on top of the forex requires. I also play around with Profunds - I am specifically in Asian markets right now (not for the faint of heart. Everyday I am surprised when I haven't lost it all.) But, in general I am a huge fan of the Vanguard funds and have been pushing people to them for as long as I can remember.

bry911,

Thank you so much for the posting. No posting is too long that is informative and insightful.

Your statements of 'But, when investing, there is no substitute for time in the market, the cumulative returns of an additional 3% reward over 40 years is just more powerful than the 3% reward over 10. Sometimes the extra money is just not worth the extra risk to get it.' definitely answered my question of 'why 60 ish could not invest like a 30ish if the fund would be left mostly untouched'. It convinced me to dial down my risk appetite.

Bry911, SnidelyWhiplash,

Both of you sounded just like our junior who works on the Wall Street. Guess great minds think alike. Dare devils and oblivious small fishes like me surely support brokerage houses. LOL! Yes, I will re-allocate my portfolio. If nothing else, whatever happened in China stock market two days ago indeed gave me a little sea sick and reality check.

If nothing else, whatever happened in China stock market two days ago indeed gave me a little sea sick and reality check. - I was in the Profunds UltraChina I got in the fund mid March and in two days wiped out everything I had made. I actually laugh about it, sometimes I start thinking I am a better investor than I actually am, thankfully, the market has never failed to set me straight. On the upside Greece came through for me once again on the foreign exchange, which made it a lot easier to laugh.