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Retirement Investments

Old 03-18-2019, 01:40 PM
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Default Retirement Investments

OK, so i'm sure i could pull up 4000 threads on retirement here.

I currently have the a number of accounts with a guy who has been handling them for probably the last 15 years and have made very little gains. I'm sure that part of that was the way we decided to be conservative early on when it should have been opposite. But i also think/feel i am being beaten up on fees for not a lot of performance. I'm thinking of going somewhere else and thinking that i could just put it in something inexpensive and buy some index funds and do much better than I'm at now. What are the top low fee places that i could do this?

I currently have a ROTH IRA, a Traditional IRA, Wife's Traditional IRA, and a non-retirement account with him. Also have a pretty good 401K that i will need to decide what to do with in the next couple weeks when i switch jobs.

I'm 37 now and i "Think" i have a good chunk set aside for my age, but i've never seen those "double every 8 years" rules play out very well and i'd like for that to change.

Thoughts?
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Old 03-18-2019, 01:43 PM
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And I'd like to do something this week, I've got to make my Wife's IRA contribution before 4/15..maybe start a new on for that?
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Old 03-18-2019, 02:05 PM
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Put it at Schwab and invest it in SPY. Including IRA's.
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Old 03-18-2019, 02:11 PM
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Vanguard, Fidelity, American Funds.
All are easy to set up and offer low cost funds and trades for brokerage accounts and retirement accounts.
If you haven't made money in 15 years, your guy isn't too hot, but is doing well off your fees.
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Old 03-18-2019, 02:19 PM
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What does “ be conservative” mean to you?

what is your current portfolio mix?

What was rate of return 1, 5, 10 yr?

what are your fees?
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Old 03-18-2019, 02:27 PM
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Originally Posted by coastboater View Post
Vanguard, Fidelity, American Funds.
All are easy to set up and offer low cost funds and trades for brokerage accounts and retirement accounts.
If you haven't made money in 15 years, your guy isn't too hot, but is doing well off your fees.
Agree wholeheartedly. For an easy strategy choose a balanced fund from one of the above and relax. You won't get rich over night, but you'll see your money grow steadily.
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Old 03-18-2019, 03:04 PM
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At 37, you're too young to be conservative with your investments. You need to be looking at growth. There are several guys on here that are much more knowledgeable than I am. I hope they provide some guidance to you.
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Old 03-18-2019, 03:17 PM
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Vanguard index funds, can't be easier and have great returns.
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Old 03-18-2019, 03:20 PM
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Originally Posted by Gary999 View Post
Put it at Schwab and invest it in SPY. Including IRA's.
Doing this would have given you a 16.5% annual return over the past 10 years and cost you a whopping .09%
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Old 03-18-2019, 05:05 PM
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Answer a couple questions that have come up -

I am not a financial guru as it may be evident. When we first started investing we were very heavily invested in municipal bonds and such. I've in the last couple years changed the "models" to where all those accounts are now "growth" or "growth with income".
The fees are looking like 1.25% of the account value, plus some admin feeds and other stuff in there

I dont have the first years accessible right now as he switched companies a back in 2012. If i look back at the Total Rate of Returns since 2012 for those 4 accounts they are 40%, 34%, 62%, 29%, which if i look at it that looks good in all green there but i would expect better over 7 years. Am i wrong? That is nowhere near doubling every 8 years...
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Old 03-18-2019, 06:33 PM
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Vanguard pioneered low fee index funds. I have done well with that company and I also have some accounts at Fidelity where I am going with their low fee offerings.

Instead of the 1.25 percent of account value plus extras you are now paying, with Vanguard and Fidelity you can get .10% down to free in some of their index funds. That may not sound like a lot but if the expected return is maybe 5 percent then you are losing one quarter of your return due to fees.
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Old 03-18-2019, 08:59 PM
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Ditch the manager, move to fidelity or vanguard.

Vanguard has generally been the gold standard, but fidelity has actually passed them as of late. I'm in their S&P 500 index and expenses are something like 0.02%. That's for FXAIX. Pretty hard to beat...and a few funds such as their international index are ZERO.

Really you can't go wrong with either one... Or Schwab. I'm with fidelity for Roth's and vanguard for taxable and things like 529. No reason. I've got various fidelity managed 401ks so it was easier to start there.

Bottom line is managers cannot beat the market. They may one year (not counting fees, which after factored in usually leave you losing to the market), after which their luck runs out. This has been proven over and over again.

Read up on the bogleheads 3 fund portfolio. Basically all index funds:

Total US market (or S&P 500... Same same, essentially)
International
Bonds

Generally weighted equally but I tend to go less into international and bonds... As in 60% plus in US stocks.

Some will add a in a 4th fund such as REITs, or they'll split bonds up into TIPS.

I don't mess with single stocks except for maybe 5% of our portfolio just for fun. Understand picking single stocks is not investing... It's gambling or speculating.

Anyway low cost indexing is the way to go. Fidelity or vanguard have what you need. Read bogleheads. You really don't need a manager.
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Old 03-19-2019, 05:34 AM
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Betterment or Schwab Intelligent portfolios with heavy equity exposure. Add some with every paycheck and don't look at the balances very often. This is a no touch approach and you will get close to market returns.
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Old 03-19-2019, 06:02 AM
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Lots of good advice above if you are comfortable doing it yourself. It's really not rocket science, and I am a fee-only advisor. The key is whether you have the discipline to follow through and not second guess yourself during market declines.

Based on the information you provided, there is no way to tell how your current accounts are doing. If you choose to use an advisor, make sure you fully understand all costs involved. If someone is charging you 1.25% and using products with 1%+ internal costs, they aren't doing you any favors.
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Old 03-19-2019, 06:10 AM
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I am 38, have been with Fidelity through two company offered plans for the past 12 years. We are currently in the Vangaurd stuff, and it is handsoff easy, has low fees, and has performed well.

Good luck, best part is you started early, and are clearly paying attention.
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Old 03-19-2019, 06:29 AM
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For those clueless, Vanguard's Personal Advisory Service (PAS) charges 0.30% per year. They'll shift everything to low cost index funds, including Vanguard Total Stock Market Index, Vanguard Total International Stock Market Index, and Vanguard Total Bond Market Index.

Most "guys" charge way over 1% for putting people into funds with loads and commissions that pay them even more money. Best advice is to leave as fast as you can, don't just put a new IRA there. Good news is that Vanguard will simply go grab everything, you don't even have to have a goodbye conversation.

By the rule of 72s, you take the return you expect and you get the number of years it will take to double your money. OP stated "double every 8 years". 72/8 = 9. Yes, a 9% return over 8 years would be nice to have, and history does not repeat itself. More realistically, you should expect to double your money every 12 to 18 years, but many of us have lived through times where we've done that much sooner due to very high market returns. 2017 was amazing. 2018 was awful.
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Old 03-19-2019, 06:37 AM
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Originally Posted by KIMDer View Post
And I'd like to do something this week, I've got to make my Wife's IRA contribution before 4/15..maybe start a new on for that?
You need to make sure you set up a ROTH IRA for your wife, instead of the Traditional IRA, and get a new advisor..
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Old 03-19-2019, 06:45 AM
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Originally Posted by rickboat View Post
For those clueless, Vanguard's Personal Advisory Service (PAS) charges 0.30% per year. They'll shift everything to low cost index funds, including Vanguard Total Stock Market Index, Vanguard Total International Stock Market Index, and Vanguard Total Bond Market Index.

Most "guys" charge way over 1% for putting people into funds with loads and commissions that pay them even more money. Best advice is to leave as fast as you can, don't just put a new IRA there. Good news is that Vanguard will simply go grab everything, you don't even have to have a goodbye conversation.

By the rule of 72s, you take the return you expect and you get the number of years it will take to double your money. OP stated "double every 8 years". 72/8 = 9. Yes, a 9% return over 8 years would be nice to have, and history does not repeat itself. More realistically, you should expect to double your money every 12 to 18 years, but many of us have lived through times where we've done that much sooner due to very high market returns. 2017 was amazing. 2018 was awful.
Betterment is 26bps and Schwab is free if you are fee adverse.
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Old 03-19-2019, 07:07 AM
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You need a new "guy", The stock market DJIA was around 10K in 2004 and it's at 26K now. How could you not have gains? Are you in bonds?
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Old 03-19-2019, 07:09 AM
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Originally Posted by rickboat View Post
For those clueless, Vanguard's Personal Advisory Service (PAS) charges 0.30% per year. They'll shift everything to low cost index funds, including Vanguard Total Stock Market Index, Vanguard Total International Stock Market Index, and Vanguard Total Bond Market Index.

Most "guys" charge way over 1% for putting people into funds with loads and commissions that pay them even more money. Best advice is to leave as fast as you can, don't just put a new IRA there. Good news is that Vanguard will simply go grab everything, you don't even have to have a goodbye conversation.

By the rule of 72s, you take the return you expect and you get the number of years it will take to double your money. OP stated "double every 8 years". 72/8 = 9. Yes, a 9% return over 8 years would be nice to have, and history does not repeat itself. More realistically, you should expect to double your money every 12 to 18 years, but many of us have lived through times where we've done that much sooner due to very high market returns. 2017 was amazing. 2018 was awful.
You are referring to hybrid advisors, not fee only advisors. Most I know charge 1% and include financial planning, estate planning, insurance analysis, tax planning etc. No product related income. Not a bad deal if you need those services. Product cost should be between .07% and .30%, using ETF's and institutional funds from firms such as DFA.

Originally Posted by joe.giuliano View Post
Betterment is 26bps and Schwab is free if you are fee adverse.
If you don't have a need for planning services, these are great options. I'm a fan of Schwab and use them as custodian.

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