Financial Advice

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cpayne5

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I recently left my federal job and am now working for a small contracting firm. As a fed, my retirement plan was pretty much "set it and forget it" in regards to my pension and TSP.

In my new path, I feel that I need to be a bit more proactive in order to compensate for the pension that I walked away from.

My question is...any advice on who/what I should(not) seek counsel from going forward? Any general advice in regards to the big names out there? Schwab, Edward Jones, etc?
 
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1. Do not seek financial advice on a motor oil forum. It's not that you couldn't get good advice here, but what are the chances?

2. Head over to Bogleheads.org and ask financial stuff there. Don't ask them about motor oil though. They could give you good motor oil advice, but what are the chances...

Good luck!!!
cheers3.gif
 
Originally Posted by Imp4
1. Do not seek financial advice on a motor oil forum. It's not that you couldn't get good advice here, but what are the chances?

2. Head over to Bogleheads.org and ask financial stuff there. Don't ask them about motor oil though. They could give you good motor oil advice, but what are the chances...

Good luck!!!
cheers3.gif


That's great advice
 
Do not seek advice from any firm that sells any financial products. They will be tilted toward selling you what they best think will work for you out of their products. You must seek a neutral party who has your very best interest at heart. I recommend consulting a CFP...Certified Financial Planner. They are held to the highest standard of financial ethics. Do a search for a CFP in your area. Get their name and check them out on the CFP website to verify his credentials and to see if there have been any complaints or disciplines against him. I wish you the very best and again do not go to anyone who can sell you anything. I made that mistake years ago and learned my lesson.
 
Originally Posted by SVTCobra
Buy a book. I'd rather take the advice of a published author vs a lot of opinions (which some are good, don't get me wrong) to determine my financial life.

There are both good and bad examples readily available in all forms of media.

Writing a book proves nothing with respect to the author's financial wisdom or insight.
 
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fwiw here is my nickel's worth of financial advice, as a former fed:

don't make any big financial changes yet. keep your money in tsp as it is now, tsp has very low costs. hopefully you bought fed long term care insurance before exiting, great value. low cost, balanced stock bond, index funds are your friends, vanguard was my choice. save yourself $150 per month and manage your own finances. religiously max out your 401k and ira by autopilot investing, ensure that you have a 10% of income, liquid, rainy day fund. live frugally now, you will thank yourself when you stop working. keep your head on a swivel, your ears open and your resume updated. the greater washdc area is a grossly overpriced rat race. do you need to stay there now that you have jumped to the private sector? best of luck to o.p.!
 
Talk to others in the same situation and see who they recommend, this is an area where personal experience, even from the right, trusted forums, will help. Invest your time in sourcing and digesting the information. Try to find a small/mid size independent advisory firm.

I just made a similar transition, exec to independent consulting, and used a regional firm to set up personal retirement accounts, tax advice, etc.

Best of luck with the transition.
 
Another vote for Bogleheads. Jack Bogle (RIP) would have told you to invest in low cost funds and not try to beat the market. Vanguard, Schwab and Fidelity come to mind. Made my money in Vanguard, it's all now parked with Schwab in my old age so my kids know where to look when I croak. My girlfriend lost lots of money with high cost annuities pedaled by "experts". I'm sure they got her for six figures before I stepped in.

I was never a Fed, so I know little about TSP. In local government we used 457 plans, and although I was a CEO, I had a lot of trouble figuring out what the underlying fees were-- lots of hidden stuff buried away and I got everything moved to my IRA as quickly as I could. Wikipedia states that the operating expenses on TSP is forty basis points. That's certainly cheaper than my 457 but about ten times higher than the typical run of the mill index fund or ETF. I guess it's more than that compared with one of the Fidelity indexes that have no expenses. That's not to say that any program whether 401/403/457 or TSP should ever be passed on if there's an employee match. A lousy employer plan with a 100% match gets you 100% a year even if it doesn't move at all.
 
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JP Morgan has some interesting retirement funds. They are set up with a retirement year in mind and balance the risk accordingly. I've been 100% invested in stocks and saw a financial planner a couple weeks ago who strongly advised me to move my money to less risky investments if my goal is to retire in 3 years. I moved my 401k to the JPMogan 2025 fund and sold some stock holdings. The JPMorgan retirement funds were the only lower risk funds my company offers through the 401k. Great idea if you want to set it and forget it. But the investing is the easy part. It's the withdraws and spending that is the hard part. I needed help to decide when I can retire. I was hoping in 5 years at 62 when SS kicks in but my planner said I'll be ready to go in 3 years. Hoping some extra cash falls in my lap and it's even less than 3 years away.

I don't believe in being frugal now with the plan to be extravagant in retirement. That day might never come. There is no guarantee on your health. Save what you can but enjoy today. Maybe save some money by stretching those oil changes out a little more.
23.gif
 
Originally Posted by cpayne5
I recently left my federal job and am now working for a small contracting firm. As a fed, my retirement plan was pretty much "set it and forget it" in regards to my pension and TSP.

I hope you didn't cash out of your federal pension. Nothing like having a defined benefit pension.

I left the Canadian government in mid career and started getting their pension cheques when I turned 60. With 6 years of service, I even qualify for federal retiree benefits.
 
There's a few very wealthy folks here with nice investment portfolios, maybe they could chime in on what they would do.

Lots of sketchy investment advisors out there..... some are very good and do what's in your best financial interests. Be careful.

How old are you ?
That greatly influences how aggressive you are with your $$$

Its been over a decade since a big recession hit and 9 months to the finish line....
 
Another vote for "Bogleheads". I think they have a wiki on books that one should read to get familiarized with personal finance. DO NOT let a financial adviser take charge of your portfolio. They will just want to sell you an annuity or charge large fees to manage your money. The concepts involved in managing your money are pretty easy. Staying with it is another story.
 
Originally Posted by 2dogs
Another vote for "Bogleheads". I think they have a wiki on books that one should read to get familiarized with personal finance. DO NOT let a financial adviser take charge of your portfolio. They will just want to sell you an annuity or charge large fees to manage your money. The concepts involved in managing your money are pretty easy. Staying with it is another story.


Not all and certainly not a good one. Also, beyond a certain threshold, it doesn't make sense to not have the right professionals involved; among other advantages, they will have access to some non 'retail' investments if appropriate. As far as the investment choices, you and the advisors should set and agree on your goals, including risk tolerance, so they should not be just dumping your $$ in whatever their vehicle of the day is. At an extreme, you can retain approval over individual investments.


You are right in that a complete fire and forget philosophy with an advisor is a bad idea.
 
Originally Posted by Imp4
1. Do not seek financial advice on a motor oil forum. It's not that you couldn't get good advice here, but what are the chances?

2. Head over to Bogleheads.org and ask financial stuff there. Don't ask them about motor oil though. They could give you good motor oil advice, but what are the chances...

Good luck!!!
cheers3.gif



Oil change thread on bh:
04.gif


https://www.bogleheads.org/forum/viewtopic.php?f=11&t=304280&newpost=5032889
 
Originally Posted by 2dogs
Another vote for "Bogleheads". I think they have a wiki on books that one should read to get familiarized with personal finance. DO NOT let a financial adviser take charge of your portfolio. They will just want to sell you an annuity or charge large fees to manage your money. The concepts involved in managing your money are pretty easy. Staying with it is another story.


I'm going to give my guy my IRA to manage for now. He charges 1% which seems high but typical but I'm just not used to managing the scale of money my wife and I are lucky enough to have amassed. He can get me into institutional shares of a low cost retirement income fund. We talked about annuities but decided against them. Our goal is 8% annual return. I fully realize paying someone to manage money is not optimum when you can do it yourself but I don't want to screw it up.
 
Originally Posted by cpayne5
I recently left my federal job and am now working for a small contracting firm. As a fed, my retirement plan was pretty much "set it and forget it" in regards to my pension and TSP.

In my new path, I feel that I need to be a bit more proactive in order to compensate for the pension that I walked away from.

My question is...any advice on who/what I should(not) seek counsel from going forward? Any general advice in regards to the big names out there? Schwab, Edward Jones, etc?


A fee paid financial planner.

Do you have any vested pension rights from the federal job you left?
 
Originally Posted by Leo99
Originally Posted by 2dogs
Another vote for "Bogleheads". I think they have a wiki on books that one should read to get familiarized with personal finance. DO NOT let a financial adviser take charge of your portfolio. They will just want to sell you an annuity or charge large fees to manage your money. The concepts involved in managing your money are pretty easy. Staying with it is another story.


I'm going to give my guy my IRA to manage for now. He charges 1% which seems high but typical but I'm just not used to managing the scale of money my wife and I are lucky enough to have amassed. He can get me into institutional shares of a low cost retirement income fund. We talked about annuities but decided against them. Our goal is 8% annual return. I fully realize paying someone to manage money is not optimum when you can do it yourself but I don't want to screw it up.


Hi Leo,

I don't want to talk you out of your plan. It's your money. However that 1% fee in a time that "experts" say stocks are going to return about 5%, bonds even less, is a LOT of money. Your 8% goal is way optimistic.
 
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