Author Topic: do i need a financial advisor to proceed with early retirement  (Read 2561 times)

jom2025

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Hello fellow Mustachian community
Our question or concern about early retirement is my wife and i are under 55 and want to avoid penalties and all unnecessary fees
if possible and get the most return from our nest egg. Should we use a financial advisor or go it alone? We have contacted Vanguard and have a future phone interview set up and we are not quite sure of all the questions we should ask. Our  understanding is Vanguard is well liked over other firms because of their lower associated fees .We would need to set up a 72t or similar program immediately for cash flow. We have been reading a lot of members posts and are still not quite sure how to proceed. If anyone who has been in this position of uncertainty please offer ideas or assistance.
We thank you in advance.

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 1847
Re: do i need a financial advisor to proceed with early retirement
« Reply #1 on: August 13, 2016, 08:36:11 AM »
If you want to give up 25% of your retirement income, then yes.

If you can retire before 55, you can figure the other stuff out without paying for a FA.  You may not even need to do 72T depending on how your current assets are arranged.   Search for Roth pipeline on here.

Physicsteacher

  • Pencil Stache
  • ****
  • Posts: 535
  • Age: 33
  • Location: Arkansas
Re: do i need a financial advisor to proceed with early retirement
« Reply #2 on: August 13, 2016, 11:17:20 AM »
If you want to give up 25% of your retirement income, then yes.

There's no need for a financial advisor, but if OP wants one, Vanguard's personal advisor services are not a stupid choice. Vanguard's services are relatively cheap. I personally wouldn't pay thirty basis points for some hand holding, but there's always the option of using them for the first year or two and then taking over once OP and his wife have had more time to research how to manage things on their own.

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 1847
Re: do i need a financial advisor to proceed with early retirement
« Reply #3 on: August 13, 2016, 11:21:11 AM »
I guess, as long as the OP doesn't get one who charges 1% or something insane.

If you are hoping for a SWR of 4% and are paying 1% to a FA (who might also put you in managed funds with additional expenses) then you are giving up a lot of retirement income.

MDM

  • Walrus Stache
  • *******
  • Posts: 9619
Re: do i need a financial advisor to proceed with early retirement
« Reply #4 on: August 13, 2016, 11:25:07 AM »
Should we use a financial advisor or go it alone?
Consider posting your situation using the guidelines in http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/.

If you can organize your information in that fashion, you will likely get better-informed suggestions.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 5623
  • Age: 1
  • Location: Earth
  • K Thnx Bye
Re: do i need a financial advisor to proceed with early retirement
« Reply #5 on: August 13, 2016, 11:28:59 AM »
You should avoid a financial advisor if you wish to proceed with early retirement.

Physicsteacher

  • Pencil Stache
  • ****
  • Posts: 535
  • Age: 33
  • Location: Arkansas
Re: do i need a financial advisor to proceed with early retirement
« Reply #6 on: August 13, 2016, 11:32:30 AM »
I guess, as long as the OP doesn't get one who charges 1% or something insane.

If you are hoping for a SWR of 4% and are paying 1% to a FA (who might also put you in managed funds with additional expenses) then you are giving up a lot of retirement income.

Agreed wholeheartedly, but OP has an appointment with Vanguard. Vanguard charges 0.30% AUM for advisor services and is unlikely to suggest anything wildly inappropriate so I think it isn't a terrible choice even though it isn't the one you or I would make.

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 1847
Re: do i need a financial advisor to proceed with early retirement
« Reply #7 on: August 13, 2016, 11:41:22 AM »
I guess, as long as the OP doesn't get one who charges 1% or something insane.

If you are hoping for a SWR of 4% and are paying 1% to a FA (who might also put you in managed funds with additional expenses) then you are giving up a lot of retirement income.

Agreed wholeheartedly, but OP has an appointment with Vanguard. Vanguard charges 0.30% AUM for advisor services and is unlikely to suggest anything wildly inappropriate so I think it isn't a terrible choice even though it isn't the one you or I would make.

No, you are right and possibly it is an ok choice, but I like to think about it in actual cash terms too.

A $50,000 4% withdrawal rate on a $1,250,000 portfolio would mean you pay $3750 to Vanguard a year for their advice.   That represents a seriously nice ocean cruise each year that you could take instead if you figure the stuff out for yourself.

kenaces

  • Stubble
  • **
  • Posts: 228
Re: do i need a financial advisor to proceed with early retirement
« Reply #8 on: August 13, 2016, 12:36:13 PM »
If you knee some advice basic stuff you can just talk to discount broker(Vanguard, schwab....).  Any of these companies should be able to set up and automate 72(T).  You can also find local CFP/accountant and just pay fee for some advice with in the longer run is cheaper than paying AUM fee as someone mentioned above.

jom2025

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: do i need a financial advisor to proceed with early retirement
« Reply #9 on: August 13, 2016, 07:16:06 PM »
Thank you all for the replies to my post . We believe we are nearing our retirement number but just believe we are unavailable at this time to figure out all the steps and types of investments we should be acquiring. As the one fellow Mustachian replied we may have Vanguard help set us up in the beginning but hopefully gain enough knowledge to takeover and eliminate unnecessary fees in the short future .

PhysicianOnFIRE

  • Bristles
  • ***
  • Posts: 452
  • Location: Up North
    • Physician On FIRE
Re: do i need a financial advisor to proceed with early retirement
« Reply #10 on: August 13, 2016, 09:59:33 PM »
Read a book or two, make a simple IPS. By the time you know enough to evaluate an advisor's advice, you will know enough to not need an advisor.

Do you have any money available to spend? Roth account(s)? Taxable account? 457(b)? SEPP shouldn't necessarily be a consideration unless all of your money is wrapped up in 401(k) or similar accounts.

Best,
-PoF