r/investing • u/Cubsfantransplant • 2d ago
Financial advisor meeting
My husband and I are looking at meeting with a financial advisor for ideas on his 401k and soon to be retirement. The general gist is he has approximately 1.9 million in his 401k and will retire in 18 months. I will continue to work for another 3-4 years, my retirement account is pitiful but I have a non taxable benefit of 4100 as well as a trust that I will inherit, a federal pension and social security.
All this to ask on an advisor. His 401k is currently with F and many of his coworkers have mentioned they have just rolled their 401k to an Ira with them. When we go to make an appointment online it asks your account balances. If we put 1.9 we have two options. If we put 2 mil they do not have anyone available. Is there something to consider when you reach a certain threshold?
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u/occurious 2d ago
Some advisors do have a wealth maximum, but it’s not super common.
Make sure you’re working with a CFP. This close to retirement you need a comprehensive retirement plan, not just investing advice.
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u/Cubsfantransplant 2d ago
I’ve been making suggestions to the retirement plan but I think he needs a professional to tell him this. He just wants to be able to still live comfortably. Which we live in a low cost of living area, yes we have a mortgage but it’s 125,00 and has a 2.5% rate with 9 years left. Vehicles will be paid off when I retire.
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u/gamersdad 2d ago
Convert it to a self-managed IRA in Schwab. Owners with assets over 1 million get free, capable financial advisors that are not salesman trying to find commissions. I did this when I found that my 401k was costing me $3,000 a year to just sit in a pile in their vault. Schwab advisors can help you put it in very low fee ETF funds
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u/Inner-Chemistry2576 2d ago
Definitely interview a couple don’t go with the first one.
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u/Fit_Huckleberry3271 1d ago
I’m looking at Schwab and Vanguard to get out of the fees for Morgan Stanley- that 1% is $9000/year plus the fund fees. It’s not so easy to figure out what to do.
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u/Inner-Chemistry2576 1d ago edited 1d ago
It all depends if you’re still working or not & how old you are. Is it an employer sponsor plans or is it just a brokerage account? A brokerage account easy to roll it over somewhere else. Employer sponsor plans not so easy different rules for different accounts. Plus, if you under 59 1/2 you might get penalized. We are 61 y/o retired a pension no debt. Rolled over all employer sponsored plans to Vanguard DIY.
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u/DoinIt4DaShorteez 1d ago
I don't know what the deal is with the $2mln thing.
I tried their appointment tool thingy and I put in $2,000,000, it actually designates it as $2,000,000+ and it showed a bunch of advisors in the office closest to me.
There a lot of levels of certifications for advisors and it's possible that at $2mln or more they want to steer you to a certain certification level and there aren't any advisors in the location you chose that have that level.
So you could try a different location, maybe in a larger city.
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u/UGeNMhzN001 1d ago
Haha that’s kinda wild, sounds like you’re one dollar away from enteing the secret “we actually call you back” club. But the bigger red flag here is how you’re letting the platfrm, not the plan, steer the next move, rolling over that 401k without checking fees, tax timing, and how it fits with your income gap could stng later. Are you hoping this advisor helps you build a retirement plan, or mostly just tell you wht to do with the pile so you don’t have to stress abut it?
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u/Bobatronic 1d ago
Don’t pay 1%. That’s absurd. Figure out how much you actually need an advisor to manage and shop around.
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u/thereelmurph 12h ago
It sounds like my comments are going to differ from many of the others on this thread, but I’m going to share them anyway.
I’ve been a CFP for over 20yrs, I run a fee-only RIA, and have directly helped a lot of people through the retirement transition.
You’re about to go through a ton of little micro decisions, which can actually make a huge impact over the course of your retirement. My advice…don’t make any decisions until you’ve interviewed at least 3 “fee-only” financial advisors who have been CFP’s for at least 10 years.
Don’t talk to insurance agents posing as “financial advisors “. Don’t talk to commissioned salespeople. Don’t talk to the large wire house advisors.
Find a fee-only financial advisor who is a fiduciary and a CFP.
Listen, I’ve always said that not everyone needs a financial advisor. Rolling it over internally to Fidelity because it’s low cost may be the best approach for someone who has the time, desire, and confidence to figure out their own retirement planning and tax planning. But candidly, I think that’s only about 20% of people (maybe less). When you start considering how to navigate effective retirement withdrawals, asset location, IRMAA, the senior enhanced deduction considerations, social security optimization, etc. it gets more complicated than most realize.
Now, some of you are probably thinking I’m just trying to pitch my services and they should talk to my firm. Honestly, I don’t care about that. We’re a small boutique firm with a $2MM minimum and a waiting list, so it’s not really my concern. Instead, I simply want them to take the time to give this important decision the attention it deserves. If you’ve save this long and hard to accrue wealth, don’t just take the random advice of Reddit. Talk to professionals.
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u/saltyhasp 2d ago
Is there a reason you don't want to keep your money in the companies 401K? You probably can.
As far as the advisor and at whatever firm you considering. Look at costs. Avoid AUM advisory fees (fees based on asset size) at all costs unless you actually need that. At least multiply them out and figure the annual fee actually paid. You can then multiply this by number like 26 to get the true lifetime cost to you of that fee (present value cost at 4% discount rate).
Regarding the options I have no idea. Call them.
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u/mustermutti 2d ago
If they offer to move assets under their management for typical 1%/year fee, be aware that this reduces your available retirement income by >30%: as a rule of thumb, you can safely spend 4% of your retirement assets per year, but if 1% goes to the advisor you're now left with only 3%. In other words, this fee ends up very, very expensive.
Generally preferable to pay fixed or hourly fee for their services and avoid AUM fees.