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  #11  
Old 05-12-2021, 11:47 AM
Derwood Derwood is offline
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Originally Posted by 7 Mag View Post
I have a deferred comp plan as well as a traditional 401k, I'm planning to retire in approx. 4 years, best of luck to you!

You may already know all of this but, in case you don't. Deferred comp is initially set-up as either lump sum payout at separation or annual installments, you will definitely want to know how yours pays out. No matter which way it pays you cannot roll deferred money into another account (IRA) without paying taxes, it's not portable.

I have called and spoke with the companies that manage my accounts, they are very helpful. You might consider going that route before you pay someone for advice.
4 years! Good luck to you too!! I feel like the closer I get to it, the further away it'll feel - as in the slower it'll come. Not gonna lie though - there's a small part of me that REALLY wants to make sure I have some activities, volunteer work, fun stuff, trips, etc planned, before I sign on the line.

That's good advice to speak with the people who already manage my accounts. I'll check into that! thanks!
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  #12  
Old 05-12-2021, 11:50 AM
Da' Walleye Assassun Da' Walleye Assassun is online now
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Deferred comp can be rolled over into a traditional IRA without paying taxes. You can not roll deferred comp into a Roth IRA without paying taxes. The traditional IRA will open up your investment options. The Roth can be converted over time in order to minimize taxes.
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  #13  
Old 05-12-2021, 11:53 AM
Derwood Derwood is offline
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Originally Posted by Da' Walleye Assassun View Post
Deferred comp can be rolled over into a traditional IRA without paying taxes. You can not roll deferred comp into a Roth IRA without paying taxes. The traditional IRA will open up your investment options. The Roth can be converted over time in order to minimize taxes.
This is why I "feel" like I would need someone to advise me. This stuff is not up my alley....
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  #14  
Old 05-12-2021, 11:55 AM
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Carnhzkr Carnhzkr is offline
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Starting June 1 of this year, I will also become one of the perpetually unemployed. Until this year, I had always been a DIYer, but that changed when I transferred the bulk of my net worth to an online financial institution in preparation for retirement. This decision was made not so much to accumulate growth, but more with distribution in mind. Accumulation is the easy part, especially over the past 13 years when any idiot could throw a dart at the financial page and and feel like a Wall Street baron. The hard part is knowing how to wisely and effectively create the income stream you'll need to fund the rest of your life. If you do it wrong, taxes can eat you alive. You need to monitor income and be aware of the various trigger points such as:
  • $68,960 - income above that and you lose any ACA credits you may need
  • $80,800 - income above that and capital gains are taxed as ordinary income (instead of 15%)
  • Those are just a couple examples.

Other things to consider:
  • Does it make sense to convert traditional IRA to ROTH?
  • Can I do a back-door ROTH conversion?
  • When should I start taking SS?

These are the types of issues and questions I didn't have a lot of confidence with, so that's the type of help I was looking for when I decided to make a change. That said, it is likely that within the next year I will pull my savings back out and resume DIYing, once I've been retired for about a year and have regained financial confidence. But we'll see how that goes.
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Last edited by Carnhzkr; 05-12-2021 at 12:04 PM.
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  #15  
Old 05-12-2021, 12:01 PM
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7 Mag 7 Mag is offline
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Originally Posted by Da' Walleye Assassun View Post
Deferred comp can be rolled over into a traditional IRA without paying taxes. You can not roll deferred comp into a Roth IRA without paying taxes. The traditional IRA will open up your investment options. The Roth can be converted over time in order to minimize taxes.
I should have been more specific; If it's a 409A plan it cannot be rolled over to an IRA without paying taxes first, this is the plan I have.

If you leave your company or retire early, funds in a Section 409A deferred compensation plan aren't portable. They can't be transferred or rolled over into an IRA or new employer plan. Unlike many other employer retirement plans, you can't take a loan against a Section 409A deferred compensation plan.

You can transfer or roll over assets tax-free from your 457 plan to a traditional IRA as often as you want after you leave your job. ... If you miss the deadline, the IRS will tax the rollover amount at your regular income tax rate. It may also slap on a 10 percent early withdrawal penalty if you're younger than 59 1/2.
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  #16  
Old 05-12-2021, 12:34 PM
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David Anderson David Anderson is offline
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Originally Posted by Derwood View Post

My question is this: How many of you, who have retired, have a Wealth Management Guy/Gal to check in with from time to time, who "keeps an eye" on your doe-rae-mi for you, advises you on things, etc? This is not really my wheelhouse so to speak, so I have kind of been thinking I'll need someone. A friend who knows this stuff inside and out, says I'm wasting my money by having someone advise me.

Thoughts
Derwood, I retired 2 years ago and have worked with various financial advisors throughout the years. It is my observation that they all follow some canned program based on your income, age, how much you have saved, and what you need in retirement. This is not to say that there are some who have their own strategy but there are large financial services that cater to this industry. The advantage is you are pooling your money with large investment strategies which gives your advisor a ton more options to leverage your individual dollar. Financial advisors are like insurance agents as far as I am concerned. I am a firm believer in working to develop a trust with your advisor, which I have had for the last 10 years. Each year we meet to discuss changes in my situation, the market, my goals, and how it all ties together. Here in Minnesota it is required that your advisor be a fiduciary as well. I have zero interest in managing my stocks. It's too hard to take the emotion out of it for me and of course hindsight is always 20/20. My guy says I can take 4% out each year and never run out of money. They can also set up a strategy so say you want to run till you are out at whatever year you pick. It's certainly one less thing to worry about for me. Good advisors can help you to make important decisions in you future by how you can leverage your existing assets. I guess it all depends on what you want to do. We all have friends who state that it's wasting money to use an advisor. Yes, it costs money but how well are they doing, how diversified are they based on there risk factors and age. They are not you. I always wonder if these people are also self insured? I guess it depends on your risk tolerance. I like sleeping at night and so far so good.
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Last edited by David Anderson; 05-12-2021 at 12:38 PM.
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  #17  
Old 05-12-2021, 12:36 PM
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David Anderson David Anderson is offline
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Quote:
Originally Posted by Carnhzkr View Post
Starting June 1 of this year, I will also become one of the perpetually unemployed. Until this year, I had always been a DIYer, but that changed when I transferred the bulk of my net worth to an online financial institution in preparation for retirement. This decision was made not so much to accumulate growth, but more with distribution in mind. Accumulation is the easy part, especially over the past 13 years when any idiot could throw a dart at the financial page and and feel like a Wall Street baron. The hard part is knowing how to wisely and effectively create the income stream you'll need to fund the rest of your life. If you do it wrong, taxes can eat you alive. You need to monitor income and be aware of the various trigger points such as:
  • $68,960 - income above that and you lose any ACA credits you may need
  • $80,800 - income above that and capital gains are taxed as ordinary income (instead of 15%)
  • Those are just a couple examples.

Other things to consider:
  • Does it make sense to convert traditional IRA to ROTH?
  • Can I do a back-door ROTH conversion?
  • When should I start taking SS?

These are the types of issues and questions I didn't have a lot of confidence with, so that's the type of help I was looking for when I decided to make a change. That said, it is likely that within the next year I will pull my savings back out and resume DIYing, once I've been retired for about a year and have regained financial confidence. But we'll see how that goes.
Excellent points!
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  #18  
Old 05-12-2021, 12:55 PM
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sportfish1 sportfish1 is offline
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Quote:
Originally Posted by 7 Mag View Post
I have a deferred comp plan as well as a traditional 401k, I'm planning to retire in approx. 4 years, best of luck to you!

You may already know all of this but, in case you don't. Deferred comp is initially set-up as either lump sum payout at separation or annual installments, you will definitely want to know how yours pays out. No matter which way it pays you cannot roll deferred money into another account (IRA) without paying taxes, it's not portable.

I have called and spoke with the companies that manage my accounts, they are very helpful. You might consider going that route before you pay someone for advice.
I'm lucky that I can with draw whatever, whenever as long as I start before I'm 70. I can roll mine into an IRA, but I'm not rolling anything into anything. I have had good management so far. I know about the taxes.
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  #19  
Old 05-12-2021, 12:59 PM
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MN_Moose MN_Moose is offline
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to answer your question I do a bit of both managing my own (IRA) and work with investment advisors for the larger pool.

One thing I would suggest based upon my dealing with investment advisors, seek advisors that work on an hourly fee. Sometimes I feel like I'm being taken advantage of paying 1.8% every quarter for no better than the what an industry measurement is doing. The investment firm makes nearly as much as I do on my money. (It's a long story and they earn their keep by managing my handicap sister's finances)

Read, study and be aware of your surroundings.
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  #20  
Old 05-12-2021, 01:01 PM
hnd hnd is offline
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just remember you are not bound to retain them for the life of your retirement. Know enough to know you aren't getting screwed.

In retirement there are so many ins and outs of allocations, taxes and withdrawals that I think a person that doesn't want to pour over this stuff is wise to seek out an advisor.

The issue is advisors come in all shapes and sizes some good and a lot bad. as with any sales related position. Unless you know someone has a pretty good idea about this stuff, i wouldn't even take a "referral" seriously. Most people have absolutely no idea if they are getting a good deal or not.

I do think an advisor is prudent for most people. My parents are nearing retirement and I know they are paying a bit more for their advisor than they could be doing if they were doing a simple boglehead index investing plan and managing it themselves but they are of absolutely no mind to do it themselves in time or care. They will pay the guy their .75% AUM who is going to make sure they are withdrawing at a tax advantaged rate and be able to feel confident they aren't withdrawing too much.



a good family friend retired 3 months before the 2008 crash. due to his allocation he lost about 25% of his retirement account. He freaked out and 3/4 of the way through 2008 pulled the entire amount. and did not get back into the market until 2010. He also got a job and worked another 4-5 years before re-retiring. looking back he obviously knows pulling his money out was a mistake. he now has an advisor to help him with that.

at the same time my dad's best friend retired in 2007. he wanted to pull his money out in 2008. stuff it in his matress. his advisor (my dad's advisor) worked hard to advise him not to and assure him it would be ok.

The problem we have as humans is our behavior. money and fear cause us to do crazy things. A good advisor should be able to help you navigate times (kind of like we are having this week)
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