Like the title says, I’m 45-years old and my wife and I have $1,090,000 in our retirement accounts. We’re very fortunate in that we have no debt. Barring a drastic change in my income we should be able to save $30,000/year comfortably until my presumed retirement age of 65, but we will probably save more than that.
We use a financial advisor and exclusively rely on him. His fee is 1% of the portfolio annually. We’ve been with him for 7 or 8 years. I believe the average annual return we’ve gotten over that time is about 5.5% after adjusting for fees.
I am not knowledgeable about investing at all. Playing with compound interest calculators, it is not wasted on me that a 1% difference over the next 20-years of retirement saving make a big difference to our final nest egg. Literally hundreds of thousands of dollars difference.
I’m posting because I am not sure that having the advisor manage our money would be any better than sticking our money in a couple (or even one) Vanguard index fun, like VFINX. Playing around with this Backtest Portfolio Asset Analyzer http://ift.tt/1GHRkBH the returns typically average 10% or better assuming I dropped in a lump sum in Jan 2010, the contributed $1,000/month through present. In fact, modeling a portfolio where all of our money is invested in VFINX, it almost doesn't matter what size of lump sum is put in or whether it was put in in 2006, or 2008 or 2010...the returns are invariably several points over 5.5%.
I could really use some guidance, because it feels like I’m financially worse off for having our advisor manage our money, versus just sticking it in some index funds and all but forgetting about it.
What am I missing? What are the right questions to ask my advisor?
Thanks in advance.
Submitted August 03, 2017 at 08:09AM by MorrisseysRubiksCube http://ift.tt/2woSQKa
