You definitely "need" trust planning. Don't fool yourself. Do you have wills and a trust?

sushipup1 -- We have recently updated wills, powers of atty for financial and health, and trusts. Everything of substance is IN our trusts, including mortgage-free home and condo. We don't want LTC (or life insurance, even as a tax dodge). Up to this point -- and *probably* beyond -- we meet our expenses with Soc. Sec., a pension, and portfolio income.

The 'planning' we are looking for is to assess our cash and mutual funds. We could probably balance nothing and be fine by slowly withdrawing from this portfolio -- if we eventually sold this RE and lived 'smaller'. Maybe the status quo is what's best. I'd just like a 'lookover'. Who knows if we'll live another 20 years? I'd like to do a little better than keep up with inflation. (We can't guess how long either of us will live and be competent anyway.)

We went to a person associated with Garrett Planing Network, and got a very good overview for $1500. We do not use a broker for our funds. And there is info on Morningside's website to help you learn to read the reports.

Sorry to assume your trust info was not in order. Knowing you, I should have known that you'd have that covered!

I spoke with a broker who charges 1 1/2 % annually to manage investment accounts. You may have to dig through your statements to find this info, or simply call him and ask. MONEY magazine has good advice and a list of 50 funds and ETFs. You can check Money out at a library.

Not sure if you want a financial plan or just direction to other mutual funds.

Fund sponsors like Franklin Templeton (it's one company) have different classes of shares in their funds - Class A, Class C, etc. For some, there's a sales charge (commission for the broker) of 4-5% when the shares are purchased. For others, there's a sales charge when the shares are sold. For all classes, there are annual fees, often ranging from .5 to 1.5% per year, depending on the nature of the fund assets and how much "management" the fund type requires. Other fund sponsors (Vanguard is the best thought of example) charge no sales commission at purchase and charge much lower annual fees. There are other permutations available, like No load funds or exchange traded funds. Call a fund sponsor, Vanguard being a good place to start, and pose your questions. If they decline to comment about Franklin Templeton funds, call them, ask about the accounts your have and what the annual and sales charges are and could be.

1.5% for money management services is WAY too expensive. Better and lower cost providers are available. As an example, I use Vanguard's portfolio management service. They did a retirement income projection for me, manage the diversification of my investments for me, call me quarterly, and the charge is .25% (one quarter of one percent) per year.

Is there a book with a 'Chinese menu' of sectors for different ages? Fifty percent from Column A; twenty percent from column B, etc.? Any kind of "if this, then that"?

There are probably as many books around covering personal financial planning and investing as there are covering dieting and personal health topics. Books of these genres can be useful in providing basic information as an introduction but the advice and specifics can get highly subjective (based on the views of the author) and sometimes questionable and unsupported.

Are you investing for yourself (because you need the income and or security accomplished by emphasizing protection of principal) or are you investing for your heirs (longer term horizon, higher risk profiles)? No need to answer in this public forum, but that's a starting point. Are you accepting of market ups and downs or do you want diversification (debt vs equities, domestic vs foreign) to buffer market movements?

Review books and other resources for background, remembering no one has a magic solution. If you're inclined to stick with mutual funds, which I think is a great idea, when you choose a fund sponsor (aim for the low cost ones, like Vanguard) they will help you pick fund choices that will fit your objectives.

Remember that the sale of the funds you now own will trigger capital gain or loss. That's something to assess before pulling the trigger to sell them. Although advisers don't always give the right advice, "reallocating" balances to different funds managed by the same sponsor also is treated as a sale triggering capital gain or loss recognition.

Sushipup -- No harm, no foul. LOL Thanks for the word on your advisor.

Snidely -- Thanks yet again. Our heirs' nests are as feathered as they are going to be. We're content to try to remain non-burdens and can't guess how long we may live nor what health concerns we may have. We're solvent now, but inflation and unknown 'old people' costs have us feeling guilty. We have money 'not working' and may be holding the wrong funds.

We may not have hit the right buttons when talking with Vanguard -- or maybe we don't have a big enough portfolio to qualify for your management situation. Will call again when we get home.

We employed a financial manager at Mesirow when we took money out of our savings to build our present home (along with sale of prior home). He was 'free' for 12 months, and we continued on at a percentage for another year. After that it was silly to have 'management' when we never bought or sold anything. (I already said we are conservative, but the market was very rocky then, and we'd just poured a lot of money into our home and furnishings.)

I appreciate the warning about gains/losses. At this moment, there's not a lot of 'balance' there! Time to buy my first lottery ticket.

I like Vanguard. I like T Rowe Price. I like Fidelity. All three can help you either online or on the phone, assess your risk tolerance, your goals, and make recommendations.

All 3 have funds with very low expense ratios, and a lot of well regarded fund managers. 4 and 5 star funds, etc.

Not sure what the exact qualifications are, but you may qualify for no cost concierge-type service if the amount you have to invest is over $200k or so. Which can include some advisor type services.

Good luck!

Chisue, you're getting good suggestions here. Take some time and do some reading, to make sure you understand the basics. The low-cost investment firms offer some great explanations of the basics on line. T. Rowe Price and Fidelity seem to have better basics than Vanguard, IMO.

Asset allocation boils down to what percent of your money is in: 1. cash or cash equivalents 2. bonds 3. stocks. The asset allocation that's right for you probably will be different from someone else who can tolerate more risk. There are a lot of asset allocation self tests out there to help you determine what level of risk you are comfortable with.

If you look at these models, for example, you'll see it's just a matter of percentage differences among the 3 classes:

http://www.schwab.com/public/schwab/investing/retirement_and_planning/retirement_income/portfolio_allocation

https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations

Because we are living longer, most of us want a little money in stocks to generate better returns and offset inflation. How much in stocks depends on your risk tolerance:

http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2013/11/22/dont-stop-investing-after-retirement

Mutual funds or ETFs do the selecting of specific investments for you. The websites mentioned above will help you evaluate how well they are doing their job.

Generally you want to rebalance your portfolio at least once a year. That means getting back to the original percentages you were planning on. Good time to make sure the investments are doing OK. If your investments are in IRAs or 401Ks or something tax deferred, you don't pay capital gains on those changes. You pay the taxes when you pull the money out.

Hope this wasn't too basic for you. Good luck!!

I mostly agree with you, golfer girl, but I don't think it's necessary to revisit sector allocations yearly. It's not like there's anything sacred about percentage allocations in an absolute sense. The likelihood of timing a reallocation optimally is the same as the likelihood of the reallocation being a mistake.

T Rowe Price and Fidelity are good sponsors but like everything else, comparative performance is always a bell curve. The Morningstar rating tells where on the bell curve any given fund is, it's a useful reference.

Snidely, perhaps I wasn't clear. I was talking about rebalancing the portfolio; i.e., buying or selling funds so the planned percentage allocation stays roughly the same. I wasn't talking about reallocation, or changing the percentage of assets invested in different asset classes every year, which is more of a change of strategy. Most sources I know value rebalancing. A few percentage drift is no big deal; a 10% change in allocation would make me want to rebalance. And it's definitely not trying to time the market.

I think I understood what you said, you maybe didn't understand what I said. It's very unlikely that changes in just one allocation would amount to more than a 10 percentage point change in that allocation's share of the total balance.

Let's say someone has decided on an allocation approach. The likely result could easily be a minimum of 6 different funds, or even more. If equally distributed in 6, that would be 17 percentage points of the total for each. Or if you prefer, let's have one large pot, 30 percentage points of the total in one fund and the remaining 70 percent in 5 other funds. For any one fund to change so much to gain (or lose) 10 percentage points of the total is very unlikely, as in, the 30 percent pot would have to gain (or lose) by more than one-third while the other 5 remain unchanged. Or, one of the 17 percent pots would have to go up more than 50% while the others remained unchanged. Or if you want everything to change, one would have to go way up, while the others go way down, or vice versa.

Unless there are massive and different directional movements as between the different pots, annual changes of just a few percentage points of the total is what should be expected. If each pot changes by 10 percent (of itself) or more in different directions, in most years that would only amount to a few percentage point change of the total. I suggest that's not enough to need to act on.

Good article on how many of the firms handle rebalancing.

http://www.nytimes.com/2012/03/24/your-money/its-time-to-rebalance-the-investment-portfolio-your-money.html?_r=0

I am in the minority on this one. I am not a huge fan of annual rebalancing, we know and accept that rebalancing overemphasizes underperforming investments and really only adds peace of mind. The reason some funds grow larger is that they are performing well when compared to other investments, so why take money from the investments that are performing well to make up for lack of performance in other investments?

I prefer instead to shift investing as my risk appetite changes. Landmarks such as 30th, 40th, 45th, 50th birthdays etc. There are other non time related things that make me look at my investing but not to rebalance. I understand the reasons why we do it, I just don't agree with them.

Having said that, it is not something that I tell people to avoid either. I just don't.

bry911 cites probably the best reason - it doesn't make sense to take money out of a better performing fund to move to a lesser performing one. That's dumb.

But otherwise, it's just not necessary. People should buy funds as long-term investments and to benefit from expert management. Make changes (as bry suggests) at age milestones (as a reminder) because one's risk/reward horizons change as the years pass.

bry, we agree on this.

I agree also. Sometimes I have thought that annual rebalancing was just another form of "churning" although not so blatant.

Chisue, brokers make money from your portfolio through sales commissions (when you buy or sell), account fees, and/or management fees paid directly by you to them; and also get some money from the mutual funds themselves for holding your shares -- paid indirectly by you through the fees that the mutual funds deduct from the funds' earnings.

I have not been impressed with paying a percentage management fee either. That adds up to quite a lot of $ over time, and generally what you get is a computer generated "plan" and computer-triggered rebalancing ( sometimes to your tax detriment, if not in a tax sheltered account) -- not a real live person looking at your account and maybe noticing that your funds are performing worse than the average and need to be changed.

There are "fee for service" financial advisors out there, you pay a set price one time for a certain amount of planning and/or advice. The idea is, they will not be influenced by needs to meet sales goals, generate continuing income, commissions etc. I have no experience with one.

It is pretty easy, with a bit of reading and perusing Morningstar and the companies' websites (like TRowePrice), to figure out which funds have been consistently better performers with low expense and management fees. Index funds make it even simpler.

Morningstar has easy to use search tools and you can compare funds.

I would check out a book from the library to get a basic understanding of all this. Get one that explains what different investments are, different kinds of stocks, what brokers do etc -- not one that is out to tell you a path to riches. Read Money or Kiplinger's Personal Finance magazines. And also call your broker and ask him to explain it to you. He should be willing to give a quick assessment of your portfolio and recommend any other purchases, if you are going to buy through him. Tell him you have x$ to invest and ask for a recommendation based on your current holdings. The danger is, some firms have in the past made a practice of "pushing" certain funds and investments to meet sales targets without regard to the needs of the client. It all depends on the firm and broker.

I prefer to have accounts directly with Vanguard and TRowePrice (Fidelity, wellsfargo, and CharlesSchwab are among others I would consider) and just choose and buy myself. I use an on-line tool to decide how much should be invested in bond, or stocks, or cash. Their yearly fees are not very much, some companies are less than others, and if you have enough invested they waive the yearly fee.

PS "nearly cash equivalent" funds might be losing your money through inflation. They should not be a majority part of your portfolio unless you don't expect to live that long.

bry911 cites probably the best reason - it doesn't make sense to take money out of a better performing fund to move to a lesser performing one. That's dumb.

Thank you. That was suggested to me, and it didn't make much sense. Why would I take money out of a fund, ETF or stock that is performing well, just to put it into something performing less well? Should I take money out of my healthcare stocks to put into energy stocks right now? I think not.

However, I have no problem using cash to buy up something that is underperforming.

Hi chisue,

I like Money magazine, and the Kiplinger people have good, non-biased advice, though I haven't had much experience with them for some time.

You might be able to find Value Line in your library, for a lot of specific, detailed advice, including relating to various corporations' stocks.

I have subscribed to a Canadian money advisory magazine, "Canadian MoneySaver" for years, and while much of their information relates to Canadian matters, there's a good amount of general advice, as well ... and they take rather a dim view of mutual funds, more interested in Exchange-Traded Funds (ETFs) and individual stocks.

For a few years I've subscribed to both their paper and their digital material, with the second being charged at half price, and giving access to about 15 years of their 9 issues per year. My subscription has run out, so I'm about to renew. As I feel that I've known you for some time, I might be persuaded to let you check their archived copies for a time.

I bought stock in one of Canada's major banks 49 years ago for about $4.17, paying about 10 - 12 - 14 cents per year dividend, paid commission then. Haven't paid a nickel for management, oversight, advice, or anything else related to that stock over the years.

Price was up over $100. per, paying $3.08 a year, later $3.48 ... then, involved with the US. financial fiasco in 2008 ... slid to $40.00, dividend stayed at same level 4 years, stock has since recovered to around $100.00. I said a while ago that if I could manage to stay alive for a little longer ... it'd pay annual dividend equal to my original price ... and it now pays $4.84.

But ... I have fewer shares, as I've transferred some to a charity, for transmission to a number of them, which allows me to avoid paying income tax on the capital gain.

Good wishes as you make your plans.

ole joyful