My father passed away last month in his late 60s. My mother (currently still a few years from retirement) has made it clear that he handled the entirety of the financial side of things and she has no idea about any of this stuff. She also has no interest in learning about any of this stuff.
Thankfully my dad used Personal Capital, so it was easy for me to discover that my mom is left with the following accounts now:
- $735k TD Ameritrade Advisor Client Rollover IRA
- Actively managed (CORDA, 1% fee), tons of individual stocks
- $315k Charles Schwab ASRC Rollover IRA
- $50k VIG, $35k MGK, $20k SCHD
- Various industry indexes
- Several individual stocks (up to 5-figures each)
- $275k Fidelity Inherited IRA
- $50k VIG, $40k MGK
- Various industry indexes
- Several individual stocks (up to 5-figures each)
- $150k Lincoln Financial Group 401 (k) Retirement Program
- $80k RWMGX, $70k RLBGX
- $110k Fidelity Individual Brokerage
- Individual stocks
For a total of about $1.6M. Looking at the massive percentage allocated into individual stocks, my dad seems to have been fairly aggressive even during his retirement. If I'm understanding the general advice given here correctly, my mom would want to make some changes unless she wanted to actively watch her accounts like my dad used to (which she does not want to do). Personal Capital says he’s allocated about 80% in stocks and only about 6% in bonds.
She was recommended to a woman at her synagogue that does retirement planning. I went with her to the initial consultation. We all talked about what her goals were, and obviously we ended up at the conclusion that low volatility is the most important thing when she’s close to retirement.
This retirement planner says that they want to consolidate the accounts and actively manage them for her, for an annual fee of 1.2% the account’s value. They said that some of the accounts will have mandatory 10-year disbursements, and would have tax implications that would be difficult for my mom to handle. They said they would handle all of that stuff for her.
I’m not convinced that she needs these services. If they consolidated everything, 1.2% would be $20k per year in fees! I don’t understand what the fee would actually be paying for. Since she wants low volatility, what kind of “active management” could they possibly be doing? I was under the impression that, especially at retirement age, this kind of stuff was easy enough to “set it and forget it”.
Is there some alternative option that could give my mother peace of mind at a more reasonable price? The wiki recommends fee-only advisors, would that be a good option for her? What kind of fee should we be expecting? Or maybe I could just handle all this for her myself? What makes the most sense for someone in her position?
Submitted July 12, 2021 at 01:26PM by throwadaxaway https://ift.tt/3kaTA1S
