I so wish I knew more about all of this stuff, I feel like the guys who my 401k are through are salesman. At first I demanded only my money and what my employer matches and wanted nothing else no risk. At this time we was through another investment company and I had it where I was at 0 risk for 5 years or so. Then my employer switched to ramond hancock. I told them I wanted it to stay exactly like I had it and they instead put me into a medium risk?? And this was right before the corona disaster happened. I looked at my 401k one day and noticed it thousands lower!!! I waited a bit because I seen at that time it was starting to climb back to normal. I ended up getting out when it got closer to where it was before still lost a bit. After reading some of the threads here about this I have realized I probably should be at least investing at a minimal risk but at this point I don’t trust these people to lead me anywhere. Does anyone know anything about this Raymond James?
Pre-Retirement Options
- Thread starter doitmyself
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Raymond James has a very bad reputation for being in business for themselves. If you are old enough to roll your 401k balance into a rollover IRA into a reputable brokerage like Vanguard/Fidelity/Schwab without penalty you should look into it. Otherwise, look into what your RJ account offers as alternatives, like very low fee S&P ETFs. Never let them put you into load mutual funds, or poor performing funds with high annual fees. Do not let them choose the funds you are invested in, or they will put you into the ones that give them the most commission.
doitmyself,
Let me be clear, not all advisors are unscrupulous crooks..... but please take the time to realize and understand how they are compensated. There are some very good advisors that do a good job.
I feel you can also do a good job if do you own research and homework like what Wolf mentioned.
Unfortunately I’ve seen too many episodes of the show American Greed where some very shady financial advisors took advantage of their clients. Down here in Florida some sketchy advisors prey on the older folks that worked their entire lives and now have a substantial nest egg.
I can expand on a PM if you want my view(s)....
Let me be clear, not all advisors are unscrupulous crooks..... but please take the time to realize and understand how they are compensated. There are some very good advisors that do a good job.
I feel you can also do a good job if do you own research and homework like what Wolf mentioned.
Unfortunately I’ve seen too many episodes of the show American Greed where some very shady financial advisors took advantage of their clients. Down here in Florida some sketchy advisors prey on the older folks that worked their entire lives and now have a substantial nest egg.
I can expand on a PM if you want my view(s)....
There are some basics that if you read enough finance magazines/articles that end up getting repeated all the time. The basics is that most finance managers can't beat the S&P 500 on a consistent basis, about 75%, but you can do some research and maybe you'll find the other 25% that do it occasionally or long enough to beat the S&P 500 returns. Seems like a Nasdaq index fund has been doing that lately. The other is to stay fully invested. It's hard to time the market, some people get it right by getting out on time, but don't time when they get back in. Some might get lucky but can they do it consistently? There's been about 4 big drops since the 90. I've heard of way too many people who got out early than got out on time. You could also consider my advice conservatives. Beating those other 75% only gives you a B, some here do better with A or higher. But if you trade in or out go with high commissions or risky stuff, you could do much worse than 75%.
I remember telling a secretary once who was just saving her 401k money in a money market account. I told her to stick it in an S&P 500 index fund. A few years later she had made thousands, she said thanks.
You also don't mention how old you are. But low risk means locking in the risk that you'll be poor. If you don't need the money for 10+ years, you put the money in an index fund. Read some of the performance numbers for two funds I posted earlier. Some years it's down but over the long term of a 10 year period, it's been up. If you need your money in 1-3 years, I wouldn't bother with an index fund, but if you're saving for retirement then indexing is one of the safest ways to go. Low risk just means eliminating the possibility of higher returns.
As for being thousands lower, well, you just get used to it. You're just picking the wrong time to look. It's usually the other way, thousands higher when the market is up. Usually that takes longer, streaks are typically up over several days so you could be up thousands or tens of thousands over the week. But of course drops can be much steeper and you could be down 10k+ on a bad day. You just get used to it, no exclamation marks...
I tend to agree, more so for someone just retiring who can not afford to lose anything.
Right now money has no other place to go, interest rates so low, at the same time, our national debt ratio is off the charts and only thing supporting our economy.
We are not even out of the current world event yet, "what if" another comes right after it? I think its an important question for someone right near retirement. We are living in a bubble thinking the market always goes up. Someday it may not, like when Japan stagnated for what? 2 decades?
Im not a pessimist but valid questions to ask for sure. Lots of hopes in the market right now, but "what if"?
You have a lot of options and it can be overhwelming. I dont know, if you dont have it to lose just be very careful and go conservative.
Im not there yet so cant say what conservative is, but there are many funds out there to protect your investment and give you some return to keep pace with and above inflation.
Im not there yet so cant say what conservative is, but there are many funds out there to protect your investment and give you some return to keep pace with and above inflation.
Agree
Thank you, and I agree also, as stated in my second post of this thread. I did pick up a few helpful hints here, but have come to the conclusion that there is no way around putting in a fair amount of time investigating options for my particular situation. It's not unlike the challenges of hiring a good mechanic, lawyer, or surgeon. In my case, I want to steer my retirement finances in a certain direction, but I do not have the expertise to manage it on a day-to-day basis. The options ARE overwhelming! Add to that we have no guarantees about how long we will live nor if the economy will carry forward similar to the past 100+ years.
Thanks everyone.
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Don't confuse their managed account not beating X account or fund as a negative. The purpose of a managed fund is to meet its goals, not beat X account or fund. If the goal is 5% average return over a 10 year period to meet your retirement needs then that is the yardstick. Of course there will be other funds that beat a managed fund. Usually higher returns come with an increased downside risk.
Unlike surgery, most lawyering, and tough mechanic work - you can do it yourself. I JUST retired and frankly could have retired a bit sooner. The last few years of work were not pleasant any more and frankly I was ONLY working for the $50,000+ per year going to savings. (nothing wrong with that I suppose). Point is I was in somewhat similar circumstances several years ago wanted help, but knew this would be on ME - I say I had a bit of "analysis paralysis". Although I possess enough investment knowledge to be dangerous, I lacked the confidence to live without that magic pay check or confidence that I could, in a very different way, give myself a paycheck, so to speak.
First, though, you are correct in your attitude - just assume all investment advisor types will screw you. I am somewhat in the same boat as far as looking the department - well except I am trying to find a tax advisor. Seems like a very rare species! My tax guy retired...........really no one to turn to for some pretty huge decisions. I have over $2.5meg in tax protected accounts (401K and several stripes of IRAs) and maybe a year+ worth of after tax dollars. I'm 62, own a couple businesses that earn decent side money, I have a small pension and am deciding not to take SS early (maybe). Health care insurance is our #1 expense, (~$1500). House payment is small ($800), moving in 2021.............my point is not to bore you with my stuff, but I'm thinking someone reading my details may be thinking "Why hire someone for that?" And indeed that is what I am thinking for you.............so while you still can look for someone, I'm telling you, you don't really need someone at this point - plus you can get started NOW.
It's interesting that couple guys mentioned Fidelity selling them annuities - oddly I have been with Fidelity for 35+ years and they have never tried to sell me much anything. (Well OK I did get, in the mail a credit card ad once). In fact, Fidelity just doesn't reach out to me.
As for advisors - always you will need some level of knowledge to judge them - I also see you know this. I'm sure you know enough to avoid the pushy type who are just sales weasels. You don't need that kind of help. People who promise or talk dreams...........well you don't need that either. Look locally, there might be someone, a fiduciary, but I have my doubts.
They will talk positive, ok I guess, but it's not them doing the moving, it's the market. There is no magic they will tell you that will help you, over time, beat the market. Period. I see the Fisher ads, they claim they are fiduciaries but I really don't think they will have their heart and soul in your best interests - but will have claws in you for their fees from what I read and heard,
Again as far as finding an advisor, a good advisor - you are correct, it's a tough nut. I am not recommending this but my brother uses LPL Financial, and I must, say - his guy, is actually not bad. The fee is negotiable, but he's not a ripoff dude. I've met and chatted with him multiple time. I've seen his work and been on a couple trusts when he was the finance guy (we had a separate tax person). Problem is, this guy is not young and I think he will retire next year, so my brother just doesn't want the next person in line if you follow my logic. How did the LPL place get involved in the first place? My aunt used him.
Have I had help - personally? I did get some help from Fidelity - through my workplace at the time. The first guy I worked with didn't help much, , just oohed and aahed (weird) - but later this gal who actually came to our workplace (a weeklong event, make an appointment) was very helpful in a 1:1 meeting early 2019. Since my wife has her savings plan at Fidelity this retirement specialist pulled up everything and gave me an OK written report, but her summary: "Why aren't you retired now?" THAT gave me a confidence boost.
YOUR current accounts - what are you invested in? This needs some real attention, IMHO. Maybe I missed it - but have you spoken in detail with a knowledgeable person there? I don't know anything about TIAA, but they should have a retirement advisor.
Point here as others have mentioned, you are young enough to need some market growth. There is such a thing as being TOO conservative. Leo99 - has sage advise about bucket. Take some time to learn about bucket investing - don't get too hung up on the word "bucket". It's just a word for segregating. I'm not going to tell you to invest in individual stocks, or great/particular funds, but I say at this point it's just to difficult to pick. So again, back to the wide market funds as others have alluded to. Of course - Avoid sectors, speculation, checking too often, moving in and out, trying to time the market...........
Although we did OK in the end (end of working phase) I made four stupid large investment decisions in my life (and a bunch of minor ones hahahhaha) - each sort of branch out, but I will avoid the details in my summary here:
1) Being TOO conservative when I should have been fully invested. This is somewhat interwoven with my other mistakes (thematic of trying to time the market)
2) Allowing politics to impact what and how and when I invest. (This was awhile back) - keeping it simple: just keep saving and investing in the wide market. At the time this probably cost me $30K, but over time this was money that could have helped build a larger retirement.
3) Getting too sector oriented, doing fine, becoming overconfident then getting distracted by life, business, everything and thinking I can autopilot. When energy got whacked really really hard a few years back, ok maybe it was like 5+ years ago now, I took a $100,000+ hit...........on 3-4 companies that basically went bust. Ouch. Linn Energy (LINE), SDRL, etc.......I still feel like an idiot. I looked at my account and I was pretty devastated. Luckily my wife didn't leave me!
4) Not saving a huge % amount early enough. I really wish I started saving 20% from day one and going up from there. I started at 8% and stayed there for too long. Although the last 20+ years, the percentage was much higher, playing catch up is hard to do. I could have retired much much sooner if I hadn't believed that 8% was enough. Everyone need to up their savings NOW and keep it up.
Again, I hope you can take something from this. Not meant to include everything nor am I trying to come off as an expert.
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No offense, but I struggle with those who say you can do it yourself.
Yes, some people do well by themselves. The vast majority do not.
There are thousands of investment vehicles. How many do you know?
And each person has different needs and different investment monies.
A prime example is, Schwab asked me to consider their CA bond fund. Invests in CA municipal bonds which are low return but double tax free.
For someone in CA (high state income tax) and high Fed income tax bracket, this is a nice component to have in one's portfolio.
I never would have known. Now I get a nice monthly income that doesn't touch the principal. Nothing is 100% safe, but this is close.
Good luck. I would talk to a professional.
Yes, some people do well by themselves. The vast majority do not.
There are thousands of investment vehicles. How many do you know?
And each person has different needs and different investment monies.
A prime example is, Schwab asked me to consider their CA bond fund. Invests in CA municipal bonds which are low return but double tax free.
For someone in CA (high state income tax) and high Fed income tax bracket, this is a nice component to have in one's portfolio.
I never would have known. Now I get a nice monthly income that doesn't touch the principal. Nothing is 100% safe, but this is close.
Good luck. I would talk to a professional.
You don't own a house and only 403 and small Roth with SS good luck with that. By the way who is you Medical insurance with?
In my particular situation I pointed out what I had and they claimed they could do better than what I had and was doing. They clearly failed on their claims and their goals.
If you skip it, there's no way to know if you're getting good advice or not. I would think a good financial advisor would be more important than a good mechanic, lawyer or surgeon (needing a good surgeon doesn't come up that often). A bad one could leave you penniless (Madoff). But if you stick to the large firms mentioned earlier, you should be ok, just depends if you get ok advice or great advice.
Thanks guys. Pablo, you put a lot of effort into your long answer - Thank you.
TIAA has done o.k. by me over the past 43 years with my employer. I have a local office/advisor that I meet with once or twice a year to review and adjust my portfolio. We went through their program to identify my needs, risk tolerance, etc. and set up a very diversified portfolio. About 6 years ago they upped their game in offering a more intensive personal approach to investment management. I "stayed the course" and did o.k. through at least 4 major recessions, starting around 1980. No one can answer if self management or other options would have produced better results. My employer contributes 2x of my input. My health, dental, pharmacy benefits follow me into retirement while merging with Medicare.
I understand TIAA will pitch a plan that best serves their interests. That's why I am researching my options. To date, my advisor has been quite frank (I think)about the pros and cons of different options and not pushy in any way. But, TIAA has skeletons in their closet the same as most others. Thanks again.
TIAA has done o.k. by me over the past 43 years with my employer. I have a local office/advisor that I meet with once or twice a year to review and adjust my portfolio. We went through their program to identify my needs, risk tolerance, etc. and set up a very diversified portfolio. About 6 years ago they upped their game in offering a more intensive personal approach to investment management. I "stayed the course" and did o.k. through at least 4 major recessions, starting around 1980. No one can answer if self management or other options would have produced better results. My employer contributes 2x of my input. My health, dental, pharmacy benefits follow me into retirement while merging with Medicare.
I understand TIAA will pitch a plan that best serves their interests. That's why I am researching my options. To date, my advisor has been quite frank (I think)about the pros and cons of different options and not pushy in any way. But, TIAA has skeletons in their closet the same as most others. Thanks again.
I think all you have to do is look at the performance of you portfolio and compare it to various funds and see if you could have done better or not.
You can't predict if your choices will produce better results but you can tell if their results were better or worse historically.
All you have to do is look.
No matter what, unless you are so bloody rich you don't care, there will always be SOME DIY in one's finances.
I think the question is more along the lines of "how much DIY?"
But absolutely you are correct, talk to and hire a professional. I don't think even the most DIY people immediately say NEVER hire a professional. For one thing a professional will help with the question I just posed as to HOW MUCH DIY do you want.........?
Don't underestimate a 403B over a 43 year span!
Been there, done that. But like LEO pointed out, you have to look at the whole picture. As I reallocate my portfolio towards safer investments nearing retirement, I cannot expect the gains that more risky investors are experiencing. I managed through numerous recessions fairly well. Others I talked to got hammered MUCH worse and took longer to recover.
Yes. You are the decision maker. Your advisor needs to put investment options on the table and introduce you to new products are they arise. And advise you as things change. And they will change.
But you are the decision maker. It's your $$, your retirement and your life.
If you don't like what you are hearing, get another advisor.
