Does your financial professional get paid based on the size of your account that might be spent down somewhat if delaying SS? If so, this could be a conflict of interest.
no, flat rate. No attachment whatever to our actual accounts. He only wanted to know how much we had in 'em.
He is also encouraging us to do the Roth conversions, although we are leaving those accounts with him, so his commission is basically the same either way.
Minus the taxes paid to the IRS.
Like you, I tend to be the FP in this house, and having a real FP that we pay is just an insurance policy should I predecease DH so that I know DH will have his money handled well.
I’ve been looking at a hit by a bus scenario as well. Trying to put much of our portfolio in couch potato mode, as well as look around for someone I can recommend in the event I have an accident. I’ve been involving DH more in the planning/executing ideas, as well as schooling the boys harder and making them make more decisions, rather than letting them get away with my making them. Eldest does well, and Youngest (who just got his first professional job, :-), honestly is getting there.
Kind of ironic I was just lecturing someone on keeping an eye on the professionals. Just spent an hour with our brokerage, trying to transfer money into Youngest’s Roth for 2021. Unfortunately the money he contributed for 2020 got credited to 2021, and even though we could prove the error was the brokerage’s, it was our error not to verify the year of the contribution and it’s too late to do anything about it. I had checked to make sure the money made it to the account, but not what year it was credited to. Frustrates the heck out of me how often you have to follow up on “professionals.”
I have earned that glass of wine. Or not, but am having one anyway.
IP
He is also encouraging us to do the Roth conversions, although we are leaving those accounts with him, so his commission is basically the same either way.
Minus the taxes paid to the IRS.
No. We pay the taxes out of our taxable account which he does not manage, so the full conversion amount moves from the Traditional IRA to the Roth. Our FP only has about 1/3 of our assets to manage. I handle the rest, which is a mix of taxable, Roth and Traditional IRA. I would never put all our eggs in one basket. I even have those accounts split among brokers so that I don’t have too much money in any one place.
I’ve been looking at a hit by a bus scenario as well. Trying to put much of our portfolio in couch potato mode, as well as look around for someone I can recommend in the event I have an accident. I’ve been involving DH more in the planning/executing ideas, as well as schooling the boys harder and making them make more decisions, rather than letting them get away with my making them. Eldest does well, and Youngest (who just got his first professional job, :-), honestly is getting there.
I keep trying to move the money that I manage to something simpler like a couch potato portfolio, but it never quite happens. I do a little each year, but I do still like some individual stocks.
I try to keep DH engaged, but he’s really not interested. Fortunately, DD (who still lives at home) is a lot like me, and so DH’s plan is to have DD manage things for him in case I go first. She will most likely help DS as well since I manage his money for him and have POA on all his accounts.
I have earned that glass of wine. Or not, but am having one anyway.
I hear ya!
no, flat rate. No attachment whatever to our actual accounts. He only wanted to know how much we had in 'em.
That’s good. But one thing your post has has done is unleash a slew of how your FA got it wrong. View that as a positive, in that posting here can show you the error of the thinking and keep you from making mistakes, be part of your due diligence, or another data point in your verifying that things are on track. Don’t be disheartened and keep posting!
IP
“If much of your nest egg is in Traditional accounts, your FP should have also warned you about the tax impacts of the significantly larger RMDs will be, especially for the second to die. If they didn’t, you should be looking for a new FP.”
If your nest egg is in outside an IRA/401K, you pay only cap gains rates on withdrawals.
If your nest egg is inside an IRA/401K, you pay the exact same tax rate likely as you likely will pay on SS…or 85% of SS since you probably will have income (RMD) twice the size of your SS, plus then cap gains/dividends on top of that. So you same 15% of , what, 30K? Helps…
If you are a couple with separate IRAs, you can distribute your IRA/401K to your heirs at time of death, or any percentage of it - not all of it has to go to wife if you are sitting on a nest egg of millions and millions by the time you die and spouse has similar size one, and doesn’t need your $$$4. then again, your non-deferred accounts transfer tax free… if held in individual names rather than joint. Have a good will with specifics.
the IRA custodian can take the designated ‘heirs’ and it passes without probate to those you name.
t
I took SS at age 62. I’m glad I did. The past few years have been much more enjoyable because I wasn’t constantly worried about income.
8 years without anxiety was worth a reduced income for the next few years, especially since I’ve been investing in the meantime and my savings have increased.
I would not have taken SS if I had been employed, of course, but firing the gray hairs in the office is a real thing, especially for middle management.