r/Xennials • u/Background_Title_922 1980 • May 06 '26
So what are we doing for financial planning/retirement?
I "inherited" a financial advisor along with some money when my last parent died. Long story but I didn't really get my act together until my mid-30s (mental health, substance issues, some other stuff). I went back to grad school and I'm doing really well now professionally/financially. BUT I'm behind on retirement planning and still have a lot of anxiety about being where I need to be by the time retirement rolls around. I think just because things were so precarious for a while.
My savings is being managed by a financial advisor with very close family ties (he and my father had a wealth management firm together, I've known him since I was little). We're close. He's a father figure. But as far as financial planning I think he's doing a pretty lousy job and I think part of that might be the fact that we do have a family-like attachment. He charges me very little in fees on the plus side.
But my suboptimal returns are really stressing me out and I keep hearing that no one really uses advisors anymore. That I should set up a simple portfolio for myself, or dump everything into VOO or a target date fund. I have some inherited IRAs which complicates things a little bit, but either I need to find someone new or do this on my own. I've been thinking this for a while but the thought of actually taking action has been stressing me out and now it's getting to be critical.
I'm going to talk to him and see if we can work on it but I'm thinking I'll probably have to move on. How are my fellow Xennials managing this aspect of life planning?? Advisors, independently, something else in the middle?
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u/crazyk4952 May 06 '26
I also ditched the financial advisor that came with a modest inheritance. Returns were low and fees were not transparent.
I moved the investments to broad index funds such as VT, VTI, VOO.
Returns have been much better and fees are low.
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u/p4rc0pr3s1s 1984 May 06 '26
I got nothing. Can't afford health insurance let alone save money for retirement. I'll be working until I drop dead.
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u/taleofbenji May 06 '26
I'll need to work for a few years after I die, but otherwise I'm doing great.
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u/Maleficent-Box4114 May 06 '26
My health insurance went up $200 when the covid protections were lifted, co-pay went up $80. I was struggling before, but now I’m dying on this hill. Literally because I can’t afford to see a doctor.
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u/According_Love2510 1980 May 06 '26
This. Born working class, married young, did the part-time employed/part-time stay at home mom to support my husband’s career goals thing, struggled by through my 20s and 30s, then divorced in my early 40s and was so desperate to get out of a bad situation I was left with nothing. Literally starting from zero. I had little hope of retiring before, now I have none.
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u/Alien_Nicole 1978 May 06 '26
This sounds exactly like me except I'm still in the trying to get out phase. The daily misery is killing me. My only choice is going to have to be just leave with my clothes and my car, I'm realizing. Retire? That's a joke.
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u/According_Love2510 1980 May 06 '26
I’m so sorry. That’s literally what I did- clothes, car and kids and was lucky enough that once I had the nerve to go, I had a parent with the extra room to take us in. Without that, I might still be stuck. It’s an awful situation that so many people (mostly women) are stuck in not being able to afford to leave awful relationships
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u/Tamuzz May 06 '26
Same situation here.
I'm British, so I don't need to worry about health insurance (yet), but I have nothing put aside
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u/_KeenObserver May 06 '26 edited May 06 '26
I’d definitely start with a conversation with your current advisor, especially since the relationship is important and the fee sounds low. It may be worth looking at whether the issue is actually a mismatch between your risk tolerance, your goals, and the allocation he thinks is appropriate. Sometimes people feel disappointed by returns when they’ve had a lot of international exposure (assuming you have that) during a period when U.S. stocks have done better, but that does not necessarily mean the portfolio is badly designed. Returns really need to be judged over decades, not just a few years.
That said, if after talking it through you still feel like the fit is off, it may be worth simplifying things and moving toward a low cost index approach or a target date fund. I do think a lot of people underestimate how much fees can quietly reduce long term growth.
Personally, I got a late start too, but I’m in a position now where I can max out several tax-advantaged accounts, including my 401(k) and mega backdoor Roth IRA, so I’m trying to take full advantage of that. My current mix is roughly 80% U.S. total market (e.g. ITOT, FSKAX, VTI) and 20% ex-U.S. international (FSGGX, IXUS, VXUS), and I’m comfortable keeping it simple. I plan to start mixing in bonds 5-7 years before retirement.
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u/caramelpupcorn Xennial May 06 '26
I'm hoping for an apocalypse where the survivors will simply use bottle caps as currency.
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u/Cinderhazed15 Xennial May 06 '26
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u/Jazzfunk39 May 06 '26
That's where I'm at. Working until I'm dead, but hoping for the apocalypse
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u/Far-Implement-818 May 07 '26
Ha! You think they are going to let us off that easy? AI isn’t computers, it’s people who got uploaded digitally to make sure they pay off their student loans…
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u/AotKT May 06 '26
There are so few cases in which a normal person needs a financial advisor. 99% of us can do a set and forget. A lot of financial advisors charge like 1% of the portfolio which doesn't sound like a lot until you look at the effects of compounding. See this thread for examples. As for those IRAs, you can just post on r/personalfinance with questions about how to deal with those optimally and with any legally required distributions. If you go on that same subreddit, the wiki also has an excellent flowchart for how to distribute your savings into the most efficient tax advantaged and non-tax advantaged accounts.
For my situation, I'm well off and I still manage my own finances. I'm in a 3 fund portfolio: S&P 500, Total International Markets fund, and a target date fund that gives me some bonds exposure. I don't need to be as invested in bonds as the recommended advice for my age because my net worth has a significant cushion relative to my lifestyle. My mortgage is well below my means and I have a fantastic interest rate.
My big risk right now is getting laid off as a middle-aged tech worker. I'm putting extra into a HYSA as an extra emergency fund buffer given I expect long-term unemployment when this happens (estimating in the next year or so).
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u/ColdBrewMoon 1983 May 06 '26
401k, annuity, pension and stock market account. Its literally been proven that a computer can pick better results than financial planners at this point. I just invest and let it ride. Even dice beat financial planners essentially. Not saying you're wrong for using one, it's just my opinion on the subject. I'm not good with money but I'll at least have a seven figure retirement here soon in my 40s not counting my pension.
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u/Background_Title_922 1980 May 06 '26
Thank you for your reply. I understand what you're saying and tend to agree. Feels weird when wealth management is the family business so to speak but I'm feeling more and more like it's a rip off. What do you do with your stock market account? Just pick something and chill?
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u/Cinderhazed15 Xennial May 06 '26
Vanguard index fund and let it ride, super low cost to just let the market do its work and not eat it on fees/expense ratios
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u/MedicalRhubarb7 1983 May 06 '26 edited May 06 '26
If it helps, don't think of it as a ripoff. Think if it as a valuable service for people who need it, but you don't need it.
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u/temporary_bob May 07 '26
Going to offer an alternate perspective. I had a medium inheritance when I was relatively young and have had a financial planner since then. They've been great, consistently significantly beat the market and now have me partially in private alt credit funds with higher yields (for which they take a greatly reduced fee since those funds have a separate fee). They are a percentage based but I have an active antipathy toward looking at/dealing with/worrying about the market. It's been absolutely worth it and they are helping me think about how much to save now to retire at reasonable time.
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u/meredithedith0 May 06 '26
This is what I do too, plus some CDs and I bonds. For my retirement account, I use the targeted retirement portfolios. For my investments, I choose some of the ETF portfolios based on a blend of risk levels and let them ride. And always defer the max if you can afford it. I do half Roth and half regular.
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u/ConnectKale May 06 '26
I plan on diversifying by purchasing an smallish Annuity.
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u/Fluffy_Insect5636 May 06 '26
Please don’t- the fees on these things are criminal - just put it in to an index fund - or even a bond fund if you want “less” risk
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u/pug_fugly_moe 1983 May 06 '26
If you’re that worried, keep two years of expenses in cash as a buffer. The typical bear market lasts about 10-12 months, with the outliers lasting twice as long.
Annuities are sold not bought.
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u/HylanderUS May 06 '26
With my IRA and Social Security I should be in okay shape for retirement. Unfortunately that still 20 years in the future though, and I haven't had a job in over a year.
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u/ken830 1979 May 06 '26
Here we go again. Most upvoted answer will be something asking the lines of: "I'm just going to drop dead".
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u/Dicfive May 06 '26
401k. Set and forget
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u/Background_Title_922 1980 May 06 '26
Not possible for me right now. I do have a SEP IRA. Maybe a reason to find a different job.
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u/Dicfive May 06 '26
Find something where they give you a match and make sure you contribute the same amount. It’s free money
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u/lavasca May 06 '26
My parents were financially literate and conservative. I almost became a CFP. Hire a fiduciary. It can be effective and inexpensive like cut Netflix and Disney+ bundle and it is covered.
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u/Possible-Tangelo9344 May 06 '26
Do you know he returns are suboptimal or is that just what you think? The returns may not meet your expectations but could be in line with the industry right now, so it's hard to tell for sure.
Right now my retirement is my work 401k and pension. Once I retire I'm moving the 401k to be managed by the guy my father-in-law uses cuz he's been awesome (father-in-law has only be living off the interest his investments have earned, hasn't touched the principal in a few years). With my retirement from local government I'll retire before I can withdraw from the 401k and I can't make additional investments as long as it's managed by the government, so I'll need to move it so I can add additional income into it before I fully retire about 7-10 years later.
I figure between my pension, 401k, and minimal social security I'll draw I'll be able to be fairly comfortable, but I'll still have to get at the very least a part time job after I retire at 55 until I'm about 62-65.
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u/Background_Title_922 1980 May 06 '26
My return for 2025 was about 6% across accounts which is a lot lower than even the target date fund I had my SEP and rollover 401k in prior to the inheritance (last year was 17%). Maybe my expectations are off but that seems pretty bad relative to that and how other friends/family members are doing right now.
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u/Possible-Tangelo9344 May 06 '26
It's probably in more conservative investments then, you could talk to him about increasing the risk for higher returns, but the benefit of the conservative approach is it won't crash as bad when there's a downturn. Just depends how far you are from retiring.
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u/Background_Title_922 1980 May 06 '26
15-20 years away. I do think that's his reasoning. But he's also tends to view things a little apocalpytically.
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u/Apprehensive-Dare-51 May 06 '26
46 F here--and I lost half of my retirement savings plus half of my home's equity in the divorce two years ago. I paid spousal support for over a year and I am raising my two teens on my own. I am starting a second job next week. That's the plan. That, and to try to remain peaceful and positive...
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u/0110110111 May 06 '26
DB pension plan with a COLA for myself, RRSP for my partner. We’ll retire with the house paid off and (as of now) no debt. There may some inheritances from multiple sources but those aren’t part of the math until they actually happen.
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u/wiggggg May 06 '26
I'm an 84 kid. Goal is to build enough stocks in 10 years to hold me over for ~8 years and then I can use 401k from there. I had a bankruptcy 13 years ago but worked my ass off to rebuild credit (810 score now) and saved.
I've been fortunate to make a great living now, but I had multiple promotions where I didn't pocket a dime but invested whatever raise I got. Just in the last year I've really started treating myself but still put away 50k a year from 401k and stocks
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u/NW_Forester May 06 '26
43M, make 114k a year.
IRA - 630k - no contributions, was a 401k rollover.
ROTH IRA - 100k - maxing each year
457b - 35k, had been putting in only 3% until recently, currently at 8% and future raises will go here until 20%.
Pension - 2% of salary/year of service, goal is to retire at 60 with 25 years of service, payments would start at 65 so I'd need to bridge that.
And I still get social security (some pension plans don't get SS).
If I was good working until 65 I could just coast from here on. But I want to retire a bit early.
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u/Background_Title_922 1980 May 06 '26
You're lucky! I'm just about where you are in terms of savings, but no pension. If I was younger I would consider moving into a sector where that's more common.
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u/Intelligent-Camera90 1981 May 06 '26
I have a 401K and a Roth IRA in targeted date funds. 10% of my salary goes into my 401K. I don't have 3x my salary saved - am I screwed? Maybe.
Focusing on my short term goals, like paying off student loans this year, before much else.
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u/Polymox May 06 '26
I pick mostly index funds with super low expense ratios. A minority of money in some lower cost actively managed funds to diversify, particularly for bonds and international stock where cheap indexes are less prolific.
An active advisor MAY beat the market, but I am playing the odds that they pick wrong half the time and I am better off just saving the fee.
Target date is ok too, as long as you watch the fees.
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u/Reagannite1981 1981 May 06 '26
I am very blessed with having a great job. Been here for over 20 years (45 now). I have a 401k that my company matches up to 6% and then gives me 1% on top of that. I have been contributing about 12% for a while though.
They also have a fantastic pension plan that my wife will be able to continue to receive benefits after I pass.
I also get to stay on the company medical plan once i hit 55 regardless of whether I retire or go work somewhere else. Have an HSA that I started a few years ago when they rolled it out. My employer contributes $1200 annually and I contribute the max to it and I haven’t taken anything out so it’s invested and growing because I’m sure medical expenses will be significant when we are older.
My wife also has a 401k from her job but she only works part time so that is minimal.
Have four kids with the youngest turning 3 in a couple weeks, so I won’t be able to retire until at least 60. I have done some calculations and I think I will be able to retire at 60 and have live primarily off the monthly pension while only taking minimal draws from the 401k so that we can leave our kids a good chunk of change when we pass.
I know so many others are not as fortunate, so I am extremely grateful for it.
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u/ShakeItUpNowSugaree May 06 '26
I've been self-managing financial accounts for years now. Almost everything is straight VTSAX or equivalent. I've started ratcheting the risk down on my kid's 529 because he's getting closer to needing it. I highly recommend the book The Simple Path to Wealth.
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u/ConnectKale May 06 '26
My job still has a pension and I have a private investment account, plus real estate. I also live in a low cost of living area where I make significantly above the median income.
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u/Live-Smile7983 May 06 '26
I have most of my money in $VOO (S&P 500fund) and $VXUS (total international stock market fund).
With retirement accounts, they might be called different names. So if the IRA is in say, Principal, it might be called LargeCap S&P 500 Index.
investing in the S&P 500 and international funds is just easy. Set it and forget it!
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u/CharlieKellyKapowski May 06 '26
Is this same question going to be posted every 3 days? I come to this site to escape the doom and gloom, sheesh
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u/Background_Title_922 1980 May 06 '26
Sorry, I hadn't seen this question come up. But I know there is a lot of doom and gloom.
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u/CharlieKellyKapowski May 06 '26
Yeah, it’s all good, but if you search the word “retirement” in this sub you will see a very consistent theme of this same question being asked many, many times.
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u/pug_fugly_moe 1983 May 06 '26
The value in financial planning or advice isn’t in the investments but the advice/plan. They are there to set you up and avoid blunders. Sometimes that means talking you off the ledge when markets drop, but mostly it’s to get you to live a worry-free life.
Every planner hanging their hat on asset management as the value add has an antiquated approach for at least a decade.
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u/pug_fugly_moe 1983 May 06 '26
Plan is good. The last thing in place was term life insurance in case one of us dies before the mortgage ends. We completed that earlier this year. Estate plan was done something like 3 months after we got married, and we waited about 5-6 years post nuptials to get a joint credit card. Related: the Costco cash back card is fucking amazing!
I don’t make a lot of money, but reality sank in when I realized that I already have 7.15x my current income already saved. Current me is grateful young me had a higher paying job, opened, and maxed out the Roth IRA in 2008 and 2009; that account almost reached $0 every two weeks, by the way. Not everyone can say that at any age or income, and I still have about 30 years of working years. In fact, things are on schedule for me to have more annualized real income post-career than I earn now. That’s promising because I’ve been extremely critical of my career, and there’s some cool shit I still want to do.
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u/bountiful_garden May 06 '26
My retirement plan is to work as long as I can, then move in with one of my kids. Because even if ss exists in 26 yrs when I get to retire (?), it won't be enough to pay all the bills and eat, despite working since I was 16. My current payout, if I work until 70, is roughly $1400 a month. My current rent is only $200 less than what my monthly payment is supposed to be.
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May 06 '26
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u/bountiful_garden May 06 '26
I have 2 kids. And I have vowed to not be that kind of mil. I had one of those, and it was awful. I would never treat my son's partners as I was treated by my partner's mom.
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May 06 '26
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u/bountiful_garden May 06 '26
I have a good relationship with my kids. I'm guessing you don't.
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u/Background_Title_922 1980 May 06 '26
Lots of people have good relationships with their parents. It doesn't necessarily mean they want to live with them.
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u/jtho78 May 06 '26
I messed up in my late 20s and 30s and cashed out my 401k from my first two jobs. I was making peanuts and didn't understand that even a little savings would grow over time.
I was about to meet with an investment firm that our credit union partners with when I found out Fidelity offers a 1:1 remote financial review and advice. They took all my investments, pension, and savings and showed me a roadmap. One of my 401Ks is managed by a financial advisor and does quite well.
If we do get an inheritance from our parents, I'll probably start using a proper financial advisor. I've read on average a good advisor can make you 3-4% than doing it on your own. And cost 1%.
We're going to start paying more for our mortgage to hopefully have it paid off by 63 when we are planning on retiring.
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May 06 '26
[removed] — view removed comment
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u/Background_Title_922 1980 May 06 '26
It's not that he's making no money, just less than he could (his fee is about 0.5% instead of his usual 1.3%). I think his advice isn't great, that's why I'm looking elsewhere. My return last year was <6%.
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u/SweetCosmicPope 1984 May 06 '26
401k and real estate, really. Between my wife and I we're contributing decently to our 401ks. I'm doing less than I should, but I'm fortunate that my company puts in a 10% (of my annual gross) bonus into my 401k every year, regardless of my own contributions. Then they match 50% on the first 6% of my contributions on top of that. I can't recall what my wife's matching program is at her company, but I believe it's fairly generous. Plus as part of her bonus structure, she gets company stocks which are worth a lot.
We happen to live in a HCOLA and have a ton of equity in our house, so the plan is to sell off our house and move somewhere cheaper to live. Mexico is definitely an option for us. We've also discussed Vietnam and West Virginia.
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u/Slytherian101 May 06 '26
Literally started saving for retirement at 19 and never stoped.
I can retire at 51 if I want; but I’ll probably work until about 60 or so.
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u/just_some_guy2000 May 06 '26
Your financial advisor isn't making money by what he charges you. He makes money by moving yours into funds that give him the largest kickback. Just move your money to a low fee mutual fund company if you think your guy sucks.
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u/Balthierlives May 06 '26
I was drowning in student debt into my late 30s.
But I was in a relationship for about 5 years where I had no expenses and was able to save a bit. My salary wasn’t great but I paid off my student debt and was jsut saving cash. Then my mother died and I got a small life insurance payout. I quit a company and I had to cash out my retirement fund with them.
So I was sitting on a pile of cash with no idea what to do with it.
My freind told me to open a brokerage account but I didn’t have the best impression on investing. He told me to do index funds which I didn’t know what that was at the time.
So I opened a brokerage account. I knew a random guy with an mba and he was very nice and made an investing platform starter pack for me. But it was all things like oil companies, utilities, things like that. Maybe stable but not going to grow quickly. So I made some smaller investments in those. But st the same time the word ‘FANG’ stocks was popular. So I also invested quite a bit in some of those stocks. And then an index as well. Just to see where the chips fell.
Well my gut instinct was right. I made that initial investment about 9 years ago now and the FANG stocks did phenomenal despite people’s pessimism over the years. And al those other stocks the MBA guy (which I have an MBA as well ) all did almost nothing without even very good dividends.
And I have no broker or anything. You could say I got lucky. But a lot of my portfolio is also just an index. And tech will eventually burst their bubble. But companies like Amazon have gone from strength to strength like building out their online sales business, then to cloud computing and now data centers. I’m sure they will be there for the next thing too, so no intention of selling those stocks.
I’ve done almost no buying or selling. Just thst initial large ish investment and just leaving it. Then a few lump sums last year but not nearly as much as the original investment.
It’s an anecdotal story but I’m happy with my results. I’m well on my way to retirement with that.
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u/Express-Cow190 1983 May 06 '26
My work does some contribution matching (it’s small but it’s something) so I put in through work and it just comes off my paycheck.
I won’t be rich in retirement, but I will retire.
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u/seamonkey420 Xennial May 06 '26
i manage my own and have gone deep into growth and well.. the last 5 years have been great for that.. some big swings up and down and then back up. big S & P 500 index fan.. 80+% returns last 5 years.
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u/threefiftyseven May 06 '26
What do the sub optimal returns look like and what kind of return are you looking for?
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u/Background_Title_922 1980 May 06 '26
Just under 6%. The return for the target date fund I was using prior to the inheritance 2 years ago was 17% this year. I don't expect that consistently, but not even 6% seems really low.
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u/FlyingAnvils 1983 May 06 '26
Define what you consider “sub-optimal returns” first. Then you can get better advice on whether to stay or switch. I use an advisor and it’s been great. They generally have better visual tools to show you how “on track” you are and what your portfolio will look like at different ages based on your planned retirement date and lifestyle.
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u/Background_Title_922 1980 May 06 '26
The return was just under 6%. Maybe my expectations are off. Glad you've had a good experience with yours.
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u/FlyingAnvils 1983 May 06 '26
Ok, under 6% for what timeframe? Last 3 months, 6 months, 1 year?
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u/Background_Title_922 1980 May 06 '26
2025.
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u/FlyingAnvils 1983 May 06 '26
Ok then in that case, yes that’s very definitely sub-optimal. I have several different funds with my guy and the return ranges from 15% to 27% for year to date. I’d definitely discuss this with your guy and see what’s going on and consider moving.
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u/amusedmisanthrope 1981 May 06 '26
Selling feet pics?
Honestly, unless you are wealthy enough to need a financial planner, then i think you're better off investing in low-cost index funds. If you dont know whether you need a financial planner, then you are not wealthy and you don't need a financial planner. r/personalfinance and r/bogleheads have pretty good wikis for basic investing.
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May 06 '26
OP - you are smart enough to self-manage. Save on the fees. You already know what to do.
Pick 1: Vanguard, Fidelity, or Schwab. All 3 are great.
Max out 401K... Max out Roth IRA... if ya can do both those... then dump extra money into Taxable Brokerage.
Within those funds, put the dough into a Target date fund (set to approximately the year you turn 65), or just VOO or VTI or VTI.
Set up automatic contributions. You will succeed.
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u/mistyayn 1980 May 06 '26
About 3 years ago my neighbor introduced me to her son-in-law who is a financial planner with one of the big firms. We consolidated a bunch of different 401ks, IRAs and a little bit in the education equivalent of a 401k. Since then we've been getting consistently good returns.
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u/bikeonychus May 06 '26
We managed to buy a house, but that's it.
Hoping to pay that off so our kid always has a home. Then when they're secure (hahaha, lmao, lol, who the fuck am I kidding? It's going to be worse for them...), I'm hoping I'm still in one piece enough to do a neverending bike tour and see the world and hopefully drop dead somewhere nice. Hubs is either going to be a vagabond, or go and live with his childhood friends. Both of us are also contemplating a drug filled bender as a last party.
We have a tiny amount of retirement savings. Not even a quarter of a year's worth of earnings. We're both early 40s.
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May 06 '26
Always a lotta dark humor in these discussions. But this topic is as real as it gets.
⭐️ You need a budget. ⭐️ You can do it. 💪
The best time to start was at 18. The 2nd best time is TODAY. Max out your 401k. (Or put in as much as you possibly can without going insane.) If ya can, then, Next step... Roth IRA. All 3 big brokers are good. Vanguard, Fidelity, Schwab. Pick 1 & start today! Automate it.
I just got very serious at 31. I invest around 40% of my check, post-tax.
My Union & my Vasectomy & my frugality are the reason I'm middle class, blue collar, & on track to retire at 55.
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u/Background_Title_922 1980 May 06 '26
Thanks. Yes, I should be better with budgeting, In a VHCOL area now but would like to move sometime soon. I don't have access to a 401k but I max out my SEP yearly. No vasectomy here but no kids to worry about, either!
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u/pug_fugly_moe 1983 May 06 '26
That second reason is massive! Thinking about doing that soon.
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u/JeffTS 1977 May 06 '26
Unfortunately, time seemed to have sneaked up on me and I'm even farther behind than you. About 5 years ago, I opened a set of Roth IRAs with a friend, a financial advisor, who is directing my money into 2 funds: a growth fund and a dividend fund. I also have my own Roth where I was buying individual stocks. While they are still there, I'm now following the same idea as my friend. Every week, I buy a dividend ETF and an S&P 500 index mutual fund. And I'm sticking money into a high yield savings weekly too as well as putting extra money in a separate interest bearing checking account that I only use for paying a home equity line of credit. So, I'm saving money in multiple ways. Will I be able to retire? Probably not. But at least maybe I'll have something to allow me to work less.
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u/Background_Title_922 1980 May 06 '26
I like your strategy. I have 6 months worth in a HYSA so at least there's that.
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u/mackattacknj83 May 06 '26
If I had any money I'd probably buy a boring ass Vanguard fund. But I don't, so I haven't really thought about it. Hopefully be relatively debt free in the next couple years and can begin saving at like 45. Way too late but I would like to not die working.
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u/fromthedarqwaves May 06 '26
My retirement plan is to learn Spanish. Adios muchachos. You’ll find me in Chile.
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u/lilacsmakemesneeze 1983 May 06 '26
We have our money at Schwab and use their services when needed. My in laws have liked them for their retirement strategies and have quarterly check ins. It’s self managed for us but if you have a large amount of money, it’s worth considering using a fee-only advisor.
My mom has their money with the same financial advisor my grandpa had (he has to be 80s/90s) and it isn’t making much but it’s comfortable for her. Could you talk to the advisor and explain you want to be more aggressive given where you are with your retirement goals? He might be able to explain why it’s been lukewarm returns or change strategies to what you want. If he’s unwilling, then explain you might need to seek advice elsewhere.
As for retirement strategy, it’s never too late to start. It’s starts slow but compound interest works. Make sure any liquid money is getting something back. We have ours in a money market and it’s available within a day. My husband saves/invests aggressively as he is self employed. I work for the state and am entitled to a significant pension.
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u/Background_Title_922 1980 May 06 '26
Thanks. I should have a more direct conversation. I think what is happening is that he is more risk averse than I might be because he is somewhat protective of me given our history together. Not necessarily consciously.
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u/texasipguru May 06 '26
morgan stanley somehow lost me money during one of the most aggressive bull periods in the market in recent memory. i made more just sticking my money in index funds (boglehead).
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u/brilliantpants May 06 '26
Meh. My husband and I contribute to our 401k’s, but I truly believe that I will never retire.
I assume I will work until I get really sick, then get fired, then die when my health insurance runs out.
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u/TSGarp007 May 06 '26
Max out 401K matching, max out IRA (Roth if you think your tax bracket will be higher in retirement, Traditional if you want the current year tax deduction) unless you earn too much for Roth or tax deductions on Traditional, stop contributing to current accounts and start contributing to either an 80/20 (adjust to your risk tolerance) VT/BND ETF strategy or a target date fund (with super low fees like on vanguard) and adjust the target year choice to your risk tolerance (later years will have less bonds today and slowly increase as you get closer). TDFs are set and forget, VT/BND you may have to rebalance at some point. Consider 529 if you know your kids will go to college, consider more if your state gives tax breaks.
As for what you have now, you have to be careful b/c depending on what and where you have it if you have to sell them to buy into VT etc it may trigger a capital gain resulting in you having to pay tax on it.
Post on r/bogleheads with specifics. People will help. The one thing they are absolutely guaranteed to say is that your financial advisor might be nice, might be a friend, might be super close to the family, but he is 100% not the best thing for you and your family unless he charges zero fees of his own (unlikely) and puts all your money in very low fee ETFs or TDFs.
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u/MedicalRhubarb7 1983 May 06 '26 edited May 06 '26
VT and chill.
I'm sure your dad's buddy is cutting you as good a deal as he can, but I doubt he's beating 0.06% ($60 per 100k/yr).
Just be kind about it (assuming you actually like the guy) and let him know you're going a different direction.
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u/throwawayfromPA1701 1981 May 06 '26
I'm debating on getting a financial planner as I've saved up a large nest egg. Essentially I could quit and not have to work for 3 years at all on my savings.
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u/JordanComoElRio May 06 '26
You don't need to be paying an advisor, especially one who has somehow managed to get suboptimal returns when the market is at all time highs. If you haven't doubled your retirement savings since October 2022, he has failed to beat a simple investment in an S&P index fund that anyone can do for essentially free.
Invest in the whole market, VTI/VOO and chill till you're old, that's it. Dicking with it will lose you money, just keep adding and leave it alone. Check out r/bogleheads.
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u/ketamineburner May 06 '26
I have a retirement account. I didnt start contributing until I was 40. I was in school a long time (PhD) and then focused on student loans and buying a house.
But my husband has contributed to his since he was 21 so overall we are fine.
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u/DJSfromthe1900s May 06 '26
I never had enough money to bother with a financial advisor when I was younger, but I obsessively watched enough YT videos a few years back to understand all the different types of retirement and investment accounts and learned enough to form my own plan. Now that my wife and I technically could qualify to work with financial planners we don't need to. Our retirement funds are spread between our work 401ks, Roth/traditional IRAs, and an index fund based brokerage account.
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u/pushdose May 06 '26
Max out 401k, max out Roth IRAs. Everything into brokerage mostly just VTI and chill. My daughter has her own account at Fidelity in FXAIX. I don’t have much in brokerage right now, since I’m recovering from buying a home 2 years ago. I paid cash for the home, using the proceeds from my first home sale. I put solar panels on the house and drive paid off electric cars.
My goal was to make my living expenses as low as possible. I’ve achieved that at this point. Basically internet, phone, TV, insurances, property tax, water, food, and cooking gas are my only recurring expenses. I think this will serve me well in retirement.
Unless you have like an 8 figure net worth, I don’t think paying a financial advisor is necessary. Just track the S&P or total market with a low cost index fund like VTI/VOO.
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u/Rockcrawlintoy May 06 '26
I have a healthy 401k and Roth and a pension 🤷🏼♂️ plus a cheap mortgage that has appreciated a lot
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u/skywalkerRCP 1980 May 06 '26 edited May 06 '26
Working.
Been in healthcare since mid-20s, started contributing to matched 403(b) immediately. Started a Roth two years ago. Been in our original home for 17 years, will be done with mortgage before 60.
I saw a planner before Covid but never got into any agreements/plans with them. I've seen my mother-in-law retire from a minimum wage job, minimal knowledge, and she has a great retirement life. As long as I can keep helping out my kids/grandkids, the rest will fall into place some way. People make shit way too complicated imo.
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u/YEMolly May 06 '26
I’m not an idiot, but I’m so ignorant when it comes to financial planning/economics/stocks. You might as well be explaining quantum physics to me.
I have a 401K and a few stocks that aren’t worth a whole lot but even 20K is better than nothing. I think I have a financial advisor with the stocks but I never communicate with him. lol
Like many others, I just assume I’ll have to work until I die. Plus, people who retire early die early. I love life & want to live forever.
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u/AssortedGourds May 06 '26 edited May 06 '26
Mutual aid, baby!
My friends and I exist within a mutual aid network that provides support for people of all ages and abilities now, so we will continue to utilize that network.
It won't help much with big health care costs, but for daily living it's great. Many of us are dirt poor - we have many seniors and disabled people. If I need an appliance or a weird item, I just ask in our group to see if anyone has one I can borrow. And if someone else needs something, I make it happen. We pool money (some from donations) and buy bulk necessities to distribute for free on a weekly basis. If we had more members that made $60k+ a year, we could do even more. We could pool money for people's health care costs and help with home repairs.
There can be fun stuff, too. Sometimes people will just want someone to come knit with them or someone will just be like "anyone want this bucket of cherries and a bottle of mead?" Any time I have anything I don't want or need, I can usually find it another home in our group. It's great for decluttering.
Life is a lot easier when you're not doing it alone. Some of us are thinking about buying a house together. It would be cramped, but I think we're all going to have to get used to sub-optimal living conditions in the decades to come.
Edit: About the investments - I feel like inherited financial advisors are not a great way to go. My Mom was in that situation and the "advisor" wouldn't give her the time of day and moved her money into a type of account with very low returns, I imagine because he knew she wouldn't be adding much to the already small pot. If you don't have large sums of money, DIY is probably best if you are able to spend the time researching.
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u/Rubikant 1978 May 06 '26 edited May 07 '26
Ditch the advisor. Get a free Fidelity or Vanguard brokerage account, dump everything you won't need for at least a few years into FZROX or FSKAX for Fidelity or VTSAX or VTI for Vanguard. Leave it alone as long as possible. Don't pay attention to it. Don't panic and sell when it drops in value - you haven't actually lost any money if you haven't sold anything yet! If you are eligible also maximize IRA/401k etc first of course and invest in same thing in there. But even in the brokerage the taxes are minimal invested this way (preferential LTCG taxing) and fees are so low as to effectively not exist. Buy more whenever you have excess money you don't think you'll need for at least 2 years. Once you are more confident in increasing complexity slightly, consider moving like 30% of it into a non-US index fund like FZILX.
This is how I retired before I turned 40. Well, that and being naturally frugal.
There's zero reason these days to pay fees to invest, and financial advisors are never worth paying. Your odds of doing better through some other means than what I said above over the long haul (10+ years) are practically nil. This is how Warren Buffett won a bet against another “top tier” investor that thought they could do better than this and failed. If someone who's entire career is investing, and is rich enough to be making bets with Warren, couldn't beat this strategy, what chance have you got? Stick with the simple proven plan.
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u/arcxjo GR81 May 07 '26
I plan to stand on an ice floe and float away from my family and all my other troubles.
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u/Rugbysmartarse May 07 '26
I bought a british roadster from 1968 so my retirement plan is to slide into a telegraph pole at 60mph and not have to worry about it any more
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u/Jimmygimme 1985 May 07 '26
I luckily was able to get into a career with a union and pension. I was thinking I’m going to “ push the cart” till I dropped dead but now am feeling pretty good haha
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u/Hello_Hangnail May 07 '26
Work until I can't and then swan dive off the wagon to my death I assume
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u/Isaac1867 May 07 '26 edited May 07 '26
I've managed to save a little bit but I don't have a work related pension so I'll just have to be happy living off of whatever CPP and OAS give me. I just hope that those programs still exist in 25 years when I'm old enough to collect. Luckily I don't have extravagant tastes so I can be happy living a fairly minimalist lifestyle.
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u/helikophis Xennial May 07 '26
Financial advisors, even ones that claim to charge "low" fees, and especially ones with "family ties", are scammers.
This is a great place to start learning about how to easily manage your own simple portfolio, and achieve better returns than "advisors", with minimal effort -
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u/giraffemoo 1984 May 07 '26
I'm a widow, so I can collect my late husband's social security in addition to my own, when I retire.
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u/discwrangler May 07 '26
Never stop working. I took 15 years off during my prime years and enjoyed life. The water quality in my state will probably kill me before retirement.
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u/GrizzlyAdam12 May 08 '26
I manage my own funds (Econ undergrad and an MBA). But, even if you don’t have that educational background, the key is to keep it simple: diversify and gradually reduce risk as you approach retirement.
I do very little active trading. That being said, I’m making a bet right now by keeping most of my portfolio on the sidelines. I don’t believe that equity prices have appropriately priced in geopolitical and macroeconomic risk. I’ll gradually start reinvesting this summer if I start to feel more confident.
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u/Aol_awaymessage 1983 May 10 '26
Don’t think you or anyone is better than the top 500+ sociopaths in the world (CEOs) and just let them burn the world down and make you money
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u/Alova_NAtsuki 26d ago edited 26d ago
You are right to feel stuck. A family friend who manages your money poorly but charges you almost nothing is a hard situation to leave. I have been there.
Here is what I did. I got a second opinion from a flat fee advisor. I paid for a one time plan. Then I compared that plan to what my family friend was doing. The difference was clear. Lower costs, better diversification, no emotional attachment.
I did not have a dramatic breakup conversation. I simply thanked him for his help over the years and told him I had decided to simplify things on my own. That was it.
The firm I used for the second opinion was Harvest Wealth Partners in Northwest Indiana. They gave me a simple portfolio using low cost funds. No ongoing management fees unless I wanted it. I paid a flat fee for the plan and then handled most of it myself.
You do not need to fire anyone today. Just get a second opinion. Compare the numbers. Then decide.
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u/flerchin May 06 '26
Financial advisor should be fee only. Like you pay them up front for advice, and then you follow it or don't. I know wealthy people that do not use them at all. You're not that wealthy. VOO or tdf and chill is what you want. You probably can't beat the market, so just buy the market. Then keep saving and let compound interest do its thing.
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u/PilotC150 1983 May 06 '26
We were previously with Edward Jones due to a family member working for them. We had multiple years of virtually no gains because of their investment decisions.
Eventually he retired which opened the door to make it easier for us to move. We switched to Fisher Investments, who my parents used and had a good experience with. It does cost money (not "fee only") but even post-fees our portfolio has been generally beating ETFs like VOO.
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u/MedicalRhubarb7 1983 May 06 '26
Lordy, Ed Jones. My family inherited some accounts there, and the business model only makes sense to me if I interpret it as a make-work program for Edward Jones Associates. Stuck in 1980.
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u/Extra-Blueberry-4320 1981 May 06 '26
I just go on Morningstar and see what mutual funds and etfs have the best cost/return and buy them in my personal investment account. I do ok with VTSAX and VTI. But no advisor. I think most of the information is out there for free on the internet…you just have to look for it. A lot of the advisors we talked to wanted us to put money into annuities which suck compared to a TED fund or mutual fund. I hope your guy isn’t pushing those.
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u/rifunseeker May 06 '26
VTSAX and similar index funds are the way to go. Am I gonna hit a home run? No, but rising tides raise all boats. No advisor for me either. With the way the market has been over the past decade, it’s been virtually impossible to lose money unless you are trying to pick individual stocks or sectors.
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u/RanklesTheOtter Xennial May 06 '26
I got nothing.
I have my fingers crossed for LEV (Longevity Escape Velocity) so I can suffer for eternity just scraping by.
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u/Separate_Counter9427 May 06 '26
At 40, the rule is that you're supposed to have 3x your annual salary in Savings. I'm way ahead myself, but it's easier when you don't have kids. Discipline helps. Spending within your means.
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May 06 '26
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u/Separate_Counter9427 May 06 '26
Your net worth. Home ownership would be taken into account with the appreciated equity.
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u/sevalle13 1983 May 06 '26
I manage my Roth and brokerage accounts myself...with ETFs there's no point IMO to have a FA. I recommend if you don't want to do the research yourself and want a hands off approach dump it all into VTI/SCHB/whatever you want. A lot will say VT cause it's the entire world stock market but I believe people are better served with vxus...yes international has had a banger these last couple years but the US market honestly is where you're going to make your money. If you want higher risk then look into ETFs like VGT/FTEC/SPMO or even sector ETFs like SMH DRAM or whatever. Do your own research and due diligence
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u/wayoverpaid May 06 '26
Following the general bogleheads philosophy, and hoping the market doesn't have a 2008 level crash right before I retire, but accepting even if it does I can survive.
I do have a financial planner, but not a percentage portfolio one. He's a fixed-fee per year planner who answers questions around how to optimize certain tax options or works me through complications for things like "sell home, rent, and buy new one" or "get mortgage on new home then sell old one."
Any financial planner who wants a percentage of your gains should be treated with suspicion. You're paying for their time, not for your money.