Thursday, September 06, 2018

I Need To Find Professional Financial Advice

     My visit to the bank was disappointingly unsuccessful.  They're the opposite of helpful.  The IRA specialist pooh-poohed my plans before they'd even been fully explained and had nothing to offer in their place.  ("My" bank is on the third ownership and name since I moved my account there, thirty years ago.  It's too much trouble to move my money elsewhere, but PNC is not much of a bank for small fry like me.)

     A couple of financial things -- income of various sorts -- have me wrapped around the axle, trying to figure out what to do with the money (even, in one case, how to receive it) to reduce or delay being gouged by IRS.  I'll pay 'em what I owe 'em when it comes due, but I am given to understand in the case of retirement income there are ways of arranging it so the money becomes taxable only after one is in a lower tax bracket.

     Are any of my readers in the financial-planning business?  Do any of you know of financial-planning firms who don't mind pipsqueak amounts of money in the hands of someone who is strongly opposed to any form of high-risk investment and who would prefer to pay a fee for good advice instead of handing over the principal and letting them skim any return?  That principal is a pittance -- but it's a pittance that, if I don't squander it, could make the difference between eating tuna and eating cat food after I retire.

     Retire I will.  All of a sudden, I'm old, six years away from full company retirement, eight years from full Social Security (if any).  It'd be nice not to arrive broke.

     P.S.: I have some rule for comments.
     1. Try to not be overly avuncular.  Just the facts.
     2. If there is anything -- anything -- you'd like to share in the way of traditional bank-connected ethnic slurs, and you know what I mean, please consider yourself banned for life in advance.  Seriously.


Will Brown said...

On a "general financial institute" note, it has been my experience that a credit union is always more responsive than any other type of savings/lending business (mine is and has been for a couple decades now Altra FCU - they're home ported in Wisconsin, with a couple branches here in Texas and I think still have one in Arkansas. If you can round up enough local interest, they'll almost certainly consider expanding, and I'm under the impression it's not that big of a number either).

As to the investment matter; back when I was still in the 401K/retirement plan investing market, I consistently had good (as in pleasant) and honest (as far as I could tell) treatment and advice from Fidelity.

I recommend either or both options for your consideration.

"Zack" said...

Credit Unions often are far more user friendly and they often have more advisory resources than banks.

May be worth a look.

Anonymous said...

How much more are you going to take before you divorce your bank? Even in my rural area, where the megabanks pulled out of after the last financial crisis, options are plentiful. Some are helpful and some are as useless as a bag of football bats. For standard banking, start looking at your credit u ion.
For the other situation, look at your boarder. I would guess she knows some people, who know some people...

Roberta X said...

Anon, I'm the person they're thinking about when they say "fiscally conservative." Only once in my life have I made a change in banking, credit card or a loan and had it turn out better than before. Neutral is as much as I can hope for and I have rarely got that. So I don't change things. It only makes them worse.

JayNola said...

In case you can't get a local referral. Dave Ramsey used the have a program called Endorsed Local Provider for financial planners but it looks like they use a service called smart vestor now. Maybe something to look into.

Fuzzy Curmudgeon said...

I do know a guy, fraternity brother. He handles our stuff except for our active 401(k)s, and will advise on them if we ask. We are a tiny account for him, but that doesn’t matter. I’d be happy to refer you.

Roberta X said...


Anonymous said...

I'll throw in a plug for Dave Ramsey. But if you're more DIY, I find that Vanguard or Fidelity are easy to work with, and have more than a few conservative choices that can be run from a Roth or traditional IRA. If, you're inclined to max out this year with a portion of proceeds.

Drang said...

We pay a guy... for a reason. He was using Charles Schwab to manage accounts, but recently found one he (his firm) says gives him greater flexibility with lower costs to us.

I get a knot in my stomach every time I contemplate it.

My only other (probably worthless) input is the observation that a Roth IRA is taxed before the deposit, so any income is tax free.

Rick T said...

+1 for some like Fuzzy Curmudgeon's advisor. I'm no financial wiz so I rely heavily on the advisor who originally managed my roll-over IRA and advises on my current 401(k). She now manages my wife's IRAs, my IRAs and three new accounts from my father's estate.

Tracee has been able to beat the market most years (even with her management fee) and she is quite cold-blooded about not holding any asset for sentimental reasons when it doesn't perform well or starts loosing value.

Her fee is based on asset value and I don't pay trading fees so there is no issue about her churning my accounts with lots of buying and selling to jack up her income.

Anonymous said...

Not really financial advice, but a bit of experience to pass on for what it's worth. Took a couple years off a la Travis McGee and now back in the work phase. Lived quite well off "tax free" Roth disbursements. No problem there but now in a position where proof of past few years income via 1040s is necessary. My actual income was more than sufficient for purposes intended ... but my 1040s indicate that I was broke. Still not sure how that'll work out.

Could be I did something wrong ...


Zendo Deb said...

My only (free) advice is beware of people offering free advice. TANSTAAFL Or free financial planning.

Really. In the financial planning world, if you are getting free advice, it is because they are selling you stuff. The stuff they are often trying to sell you is WAY more expensive than similar (or even better) stuff you could get from the large mutual fund companies.

OR they are going to "manage" your investments - which usually turns out they are going to churn your investments and generate high commissions for themselves. (Sometimes this is combined with the first item above.

American Express Financial Advisors USED TO provide fee-based plans. Several hundred dollars. They would offer to sell you stuff, like mutual funds, but that was separate from the plan. Don't know how they are today. Don't know anyone in Indianapolis.

Unless you are going for gold/silver/bullets/prepping-201 stuff, most go with mutual funds, and it is a good place to start. The big names Fidelity, Vanguard, even some of the discount brokerages like Schwab have decent funds. Things to be aware of funds: Load (cost to buy) Sales load (cost to sell) annual expense rate. (What they charge you on-going.) In today's market there should be no load/sales-load, but some of the companies offering "free" advice will try to sell you stuff with 3% or more load, or extremely high expenses.

JayNola mentioned Dave Ramsey. I don't like everything he says, but yeah, he is a good place to start. (The radio show is annoying after a while, but only after a while.) His number 1 thing. Be debt free. No credit card debt. No car loan. No Mortgage. (Pretty much in that order.) You will have less money in retirement, so it makes sense to get rid of all that to start.

Best of luck. Finances can be upsetting.

Zendo Deb said...

I forgot to say that most people today go with index funds. Funds that exactly track the S&P 500, or the NASDAQ or something as opposed to managed funds. (The yearly expenses are less and the performance is generally better. Sometimes better) is a good place to start learning.

Hollowpoint1938 said...

Roberta: For many years we, as small investors, have used Cassaday and Company as our advisors. I don't know what their minimum requirement is for new clients, but they have been very steady and reliable organization. Only possible problem: they are located in McLean, VA, outside DC. They charge a fee based on a percentage of your invested funds. Website is
Get in touch and see whether they can help. Contact me if you want further info and my name. I have recommended them to several friends over the years and all have been satisfied.

Roberta X said...

Look, all I need to know is what's taxable and when. There are three ways to get the money from a closed-out retirement program at work; one is awful (nothing 'til I hit 70), one is a smallish lump sum, and one starts an annuity *now,* with a substantially bigger payoff than the lump sum, about half-again as much if I live as long as actuarial tables predict. But the annuity is only any good if I can spool it into a simple IRA and defer taxes until I am in a lower bracket.

As for investment, *I* *don't* *do* *that.* I don't trust it. Never have, never will. Not stocks, not bonds, not mutual funds, not nothing. IMO, that's like gambling: if you can afford to lose that money, okay. I cannot. The pros at such matters will play you for a fool every time.

Alien said...

I'll second the motions above and suggest: Maintain skepticism every time you talk with a financial advisor (or equivalent) and take good notes. Ask - repeatedly, if necessary - about anything you do not understand completely, and I mean completely. If their explanation fails to deliver what you are sure is complete understanding, find someone else. Assume absolutely nothing. And, having reached "complete understanding," verify that understanding with another reputable source. Zendo Deb is right: TANSTAFFL is absolute truth; financial advisors are in business to earn a living and good ones will charge a reasonable fee to accomplish that. Don't be afraid of reasonable fees, but do exercise judgment on the cost of those fees, and fund "operating costs" over time.

Flexibility is key; beware of programs that lock you into one plan forever. Benjamin Franklin said "nothing is constant except change" and that's especially true in finance. Staying in the same "finance group" is not a bad thing as long as there are sufficient options within that group.

An observation: Run the numbers on "early funds access;" you'll pay a premium for receiving funds early, but compute the time advantage of that. A friend ran his numbers on Social Insecurity and found that the 25% hit one takes at 62 vs getting 100% at 67 meant he would be not quite age 78 before that early access premium started costing him money; a decent investment program (Roth-based) for some of the SS dollars pushes that to 80, and who knows how long one will live.

RE: Banks. yes, it's a PITA to change banks, but do it anyway. If they treat you like something to wipe off their shoes, you have the wrong bank. Don't change banks to be vindictive or because you're pissed off, change to get a better deal with better people who are running a better institution.

Oh - and have a will. Or, better yet, a revocable trust (trusts avoid probate) from a very competent attorney who specializes in estate management (again, quality comes with a cost - which should be reasonable - but it's worth it). Here, wills are ~$500-$600, revocable trusts roughly 2.0 - 2.5X that. What you make with good investment choices can be severely compromised in estate settlement. Yes, you'll be dead then, but your assets still shouldn't be squandered through taxes or malfeasance of relatives.

Rick T said...

Ms. X, I'd ask for better retirement guidance, as your statement above on how to handle a closed out company retirement account, specifically no access without penalty until you are 70, doesn't seem to be a general rule.

AFAIK (and the way I've managed my accounts) is once you roll the balance out of the employer-related account it becomes a Traditional IRA (or ROTH if you pay the lump sum taxes), and 70 years is when minimum mandatory IRA distributions kick in. Once you are beyond 59 1/2 you can pull money without penalty but will be taxed at your current rate.

IF your employer is doing something different I'd talk to a tax professional to see if you have better options.

Randomscrub said...

It sounds like what you really need is a CPA to answer questions and possibly manage the transfer. It’s like hiring a lawyer, but for financial stuff instead of law. Pro: you’re the client/customer, so they’re looking after your interests instead of a bank’s. Con: possibly expensive enough to consume the returns the advice would generate.

It’s worth exploring, though.

Anonymous said...

My understanding is you have two issues.
1) Which of the three options your company is offering to take.
2) If I take the money what do I do with it.

If you feel you need professional advice another option is a Tax Attorney for questions about the tax implications for your three options.

If you want to pull out your money from the company retirement plan, I highly recommend Vanguard. Vanguard will handle the transfer for free. If you have an on-line account zero fixed annual fees. Annual asset fees are some of the lowest in the industry. Typically under .2% (approx $.20 for every $100 of your investment portfolio) depending on the fund. The Vanguard website has comprehensive information about IRA rollovers.

Note: While I understand you do not want to risk your money, not investing your money guarantees you lose money due to inflation.