Hey - Thank you all for the responses. I greatly appreciate your time and input.
So now that I'm just about to move forward with this I'm second guessing myself, as I have friends, family and my financial planner all telling me I'm crazy. In short:
Our financial planner is being cool about things but thinks I don't understand the value I get from the 1.35% fee and wants to meet to discuss. I've declined as no matter how you do the math in the long run when these fees are compounded over 20-50 years it is a ton of money. Furthermore the chances of him beating the market year after year in the long term is highly unlikely.
My good friend says I'm doing the right thing, however is adamant that I need to actively manage the funds (similar to my how financial planner would), have some invested in bonds and be ready to act on market fluctuations to move money around as needed. My plan was to just invest the IRAs in index funds and leave them be for the next few decades.
My parents think I'm "putting my families future at risk".
So I guess my question is - what am I missing? Is there any reason not to do this?
Ok. If you haven't done so already I'd take some time and read through the first 16 parts of so of JL Collins Stock Series (
https://jlcollinsnh.com/stock-series/)They are short, well written, and will address many of your questions
IN response to your friend who insists you actively manage your portfolio, I'd say hell no. I mean, if you are the type who really likes spending hours researching stocks, running metrics and finding value go at it. But it sounds like this is not you. Further, understand that existing stock prices are based on what a lot of smart people who spend their time analyzing stocks already think it is worth... meaning a smalltime fry like you or me is unlikely to beat the market casually tracking companies a few hours each week.
Yes, having some bonds can be a very good thing, but that does NOT mean you need to actively manage your portfolio. The simplest way is to just buy a target date fund that has both stocks and bonds spread across domestic and international markets, and let Vanguard worry about rebalancing and changing your holdings as you get older. Second easiest would be to hold ~3 funds; one a domestic stock index fund, one a bond fund, and another an international fund. That's about as complicated as I would recommend for anyone asking such questions.
AS for your parents: You are putting your future at MORE risk by staying with a high-fee service. Year after year >80% of managed funds fail to beat their index target. You will be MORE likely to hae LESS money by sticking with LML. You arent' 'going it alone' by going to Vanguard - they have client advisors too, and they'll generate all the relevant tax documentation for you.
FInal note: The financial industry has a vested interest in convincing you that its too complicated to manage your own finances. In reality, it's not that hard, and the 'services' that these high-priced houses offer do not offer you any better chance at a secure retirement. No one is going to have your interests at heart better than you, and LML wants you to stay with them because you are paying through the nose for the exact same products you can get htrough Vanguard, Fidelity or others.