Author Topic: Advice on how to help parents with their finances/retirement  (Read 2139 times)

des999

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Advice on how to help parents with their finances/retirement
« on: October 07, 2016, 06:20:22 AM »
Hi all,
My parents are retired, age 63 and 65.  My father took early SS and is getting 19k/year.  My mom retired a number of years ago and get 15k/year from state pension.  My parents are very hardworking, no college education, but did very well for themselves considering, but did not save a ton of money.  They also do not know anything about finances and have an advisor which I have tried to tell them they do not need.

The have 260k saving in retirement accounts and from what I can gather they have it a mix of funds, one being S&P 500, one being an international fund of some sort, but again the details are very fuzzy at this point, but I do know that he claims he is not making much money on any of accounts, which I find hard to believe. 

I ask my father how much he pays his advisor and he does not know.  I really want to help, but I don't know how to get him to drop the advisor, he also doesn't have much for me to look at other than quarterly statements.  The good news is he is starting to open up to me about his finances, which he has never done in the past.

Basically they can cover their expenses with the pension and SS, so I want to dump all of the 260k in an index fund, maybe 60-40 stock to bond and then just have them set up 4% withdrawal amount each year. 

Any advice on best way to get him to drop his advisor, should I meet with his advisor if he lets me?  He has had him for a very long time.

Thanks!

Pigeon

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Re: Advice on how to help parents with their finances/retirement
« Reply #1 on: October 07, 2016, 06:51:31 AM »
This really boils down to your relationship with your parents.  It sounds like they are responsible people.  I would try to continue working gently on getting your dad to open up to you about finances.  See if he is willing to set aside statements when they come in and then sit down with him and explain what's happening with his money, and compare it with what's happening with a good index fund over the same period and see how they are different.  If you have access to his statements, you can figure out what's being charged and show him.

That said, he's a responsible adult and if he thinks it's none of your business, that's entirely his right.

plog

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Re: Advice on how to help parents with their finances/retirement
« Reply #2 on: October 07, 2016, 06:53:27 AM »
Quote
Any advice on best way to get him to drop his advisor, should I meet with his advisor if he lets me?  He has had him for a very long time.

1. No--you're probably not going to be able to convince them to drop the advisor.

2. It may not even be a good idea for them to do so.

How can you know what's best for their situation if you don't fully know the situation?  Further, if they aren't fully sharing their situation with you, that's not a good sign for their trust in your ability of their finances, which means, they probably aren't open to your ideas.

My advice would be to provide them with information.  Try and teach them about investing, hope they are open to it and when they want more information be available to them.
     

des999

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Re: Advice on how to help parents with their finances/retirement
« Reply #3 on: October 07, 2016, 08:25:52 AM »
Quote
Any advice on best way to get him to drop his advisor, should I meet with his advisor if he lets me?  He has had him for a very long time.

1. No--you're probably not going to be able to convince them to drop the advisor.

2. It may not even be a good idea for them to do so.

How can you know what's best for their situation if you don't fully know the situation?  Further, if they aren't fully sharing their situation with you, that's not a good sign for their trust in your ability of their finances, which means, they probably aren't open to your ideas.

My advice would be to provide them with information.  Try and teach them about investing, hope they are open to it and when they want more information be available to them.
   

They have shared a lot with me recently, hence this post.  In that past, they never seemed to want to talk about it when I brought it up, so I dropped it.  The fact that my father is opening up more about it, and told me his exact numbers makes me think he wants my help.

We actually have a great relationship, so this isn't something that I worry would create problems, I just don't know the best way to get them to drop their advisor, as I'm sure he is charging them more money than is necessary. 

Why do you say it may not be a good idea for them to drop their advisor?

I agree about trying to educate them, but every time I do, I feel like they just look lost and it isn't sinking in.

plog

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Re: Advice on how to help parents with their finances/retirement
« Reply #4 on: October 07, 2016, 08:57:31 AM »
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Why do you say it may not be a good idea for them to drop their advisor?

And to you I ask, how do you know its a good idea to drop him?

You simply don't have enough information to make an informed decision.  Perhaps he's looting their accounts.  Perhaps he's working pro bono.  Perhaps he's just an average advisor.  You want to change the situation, without knowing the situation. 

des999

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Re: Advice on how to help parents with their finances/retirement
« Reply #5 on: October 07, 2016, 10:19:24 AM »
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Why do you say it may not be a good idea for them to drop their advisor?

And to you I ask, how do you know its a good idea to drop him?

You simply don't have enough information to make an informed decision.  Perhaps he's looting their accounts.  Perhaps he's working pro bono.  Perhaps he's just an average advisor.  You want to change the situation, without knowing the situation.

fair enough, I guess I just don't see a reason why you need an advisor if they are willing to just dump everything into an index fund.  I guess I better have more conversations first.  But, like I said, they are opening up more about it recently, so I hope that means they want more help from me.  We shall see.

Playing with Fire UK

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Re: Advice on how to help parents with their finances/retirement
« Reply #6 on: October 08, 2016, 01:03:18 AM »
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Why do you say it may not be a good idea for them to drop their advisor?
And to you I ask, how do you know its a good idea to drop him?
You simply don't have enough information to make an informed decision.  Perhaps he's looting their accounts.  Perhaps he's working pro bono.  Perhaps he's just an average advisor.  You want to change the situation, without knowing the situation.

Agree that more information is needed for the specifics; but the average advisor charging average %fees and getting average after-fee performance should be dropped by the average person in favour of a book and spreadsheet.