I tried to convince my mom to do the same. They have annuities that more than cover all of their expenses so they can afford to be "risky" with another account, but she answered the advisors questions in a very conservative manner and I got her to move up a notch or two, but it was impossible to get her to see that it is very likely she will never touch that money at all.
Interesting thought. We tried out an advisor (my wife's parents use them), and while they had some advice, most of it was either pretty obvious, or contrary to what we believe, and it seems that many advisors (I went to a meeting with my parents' advisor as well, and my employer has a Prudential advisor that we can talk to a couple times a year for free), don't understand:
having a large family
Earning more than we spend, thus our spending in retirement is significantly different than our current earnings.
Lastly, I'm the treasurer for various non-profits, and one of them has a high-paid advisor and gets worse returns than my Vanguard/Fidelity funds, and isn't really available for questions, and is too large for me - I have to explain who I am every time I call. I don't know enough about tax optimization, so it would be good to learn more about that (I know the basics, and my current strategy (in the earnings phase) is to max out the HSA, 1 Roth 401k, 1 401k, and an additional 25% from the self-employed "employer" portion into the pre-tax fund, and then 2*Roth IRAs, and assuming early retirement, will start moving pre-tax funds into the Roths when at the 12% tax bracket. (So, I'm figuring that is decent, at least) But, for the non-profits, where tax optimization doesn't matter at all (I think), I don't think we are getting *any* value from the advisor, and I've been planning on moving the money to Fidelity, and I think I will print out this article for the organization to assure them I know what I'm talking about. Thoughts?
I also found those two phrases incongruent. I don't know how often my parents *think* about their assets, but they only really look at them about once a year when doing taxes so I would think that is much simpler than every day. I'm not clear as to why anyone would check that often. Are you making changes? Checking to see if your account was emptied by a scammer? Checking the balance? None of that seems simple to me .. I suppose if it is a fun brain routine to watch the money then it is fine, but I would think most people have a simpler plan.
If your friend lump sums right now, they will be about break even, depending on when they got out. I had thought about getting out because it did seem obvious to me that the market was going down due to uncertainty, and in this case I would have timed it about right. My son asked if I had gotten out the other day so we did the calculation to see how it works have worked out (I stayed in), and it would have saved me 7%, since I wouldn't have timed it perfectly, but as long as you get back in before the market returns to the number that you got out at, you win. I think the "never get out folks" don't realize that you don't have to time the market perfectly. But I would agree in general that you don't usually know what the market is going to do (and I don't know what is going to happen in the coming months if the tariffs "unpause", etc.
I don't know if it works for individuals, though I would assume it would. When I received scholarships from organizations that wanted to write a check directly to the college, I had them include a statement that said, "by accepting this money we agree to not reduce the aid to the student" My college endorsed the check without blinking and my aid was not reduced a penny. For any scholarships I received that did not include that statement, we got a letter the following month stating, "we noticed some changes and recalculated your aid", coincidentally, reducing my aid by exactly the same amount as the scholarship. I have had trouble with some organizations not understanding why writing that extra sentence is the difference between a $0 scholarship and actually making a difference to the student they are trying to support.
Yes. Some number of years ago there was a large number of fraudulent claims and that solidified my plan of always owing $1k or so (or more on those happy years where my income is significantly higher than the previous so just aim to prepay 100% of last year's amount). With how many people blow their "refund" badly, I've wondered if people would spend it better if it wasn't taken out all year long, though I don't recommend bad savers to owe too much, since they might already spend it before April comes around. But it is always mystifying to me how many people don't understand tax brackets and refunds.
I have had the IRS make errors (in both directions), but at least they paid interest when they made a mistake. (Though I haven't had them take as long as your example, and I didn't have to do much other than a letter and a phone call, etc. I think they've taken 6 months at the longest to resolve their mistakes)
Doesn't this idea of selling off the losers mean that you are selling when they are low, rather than selling the winners that might be at a high point? I'm not in a place where I'm looking to sell off myself but it seems like it would be a better strategy to sell high rather than selling low.
Exactly right. I'm not sure why we are subsidizing anyone who thinks they need $100k deduction on their income. I think we should lower the caps on other deductions and credits as well. Though it isn't popular (and would hurt me) I don't think the child tax credit should only be phased out at $400k. Phaseouts of various subsidies should start at $100k. Not doing so only widens the gap between the wealthy and the poor. And though, as readers of the HD, like saving money more than the average person we also can afford more than the average person, so it wouldn't have that much of an effect compared to where money could be spent elsewhere. That said, I don't really think the government is all that good at spending any money, so I'm happy putting money in my pocket for now, but it isn't a good system.
Comments
I tried to convince my mom to do the same. They have annuities that more than cover all of their expenses so they can afford to be "risky" with another account, but she answered the advisors questions in a very conservative manner and I got her to move up a notch or two, but it was impossible to get her to see that it is very likely she will never touch that money at all.
Post: Die With Zero? Hell No
Link to comment from July 19, 2025
Interesting thought. We tried out an advisor (my wife's parents use them), and while they had some advice, most of it was either pretty obvious, or contrary to what we believe, and it seems that many advisors (I went to a meeting with my parents' advisor as well, and my employer has a Prudential advisor that we can talk to a couple times a year for free), don't understand:
- having a large family
- Earning more than we spend, thus our spending in retirement is significantly different than our current earnings.
Lastly, I'm the treasurer for various non-profits, and one of them has a high-paid advisor and gets worse returns than my Vanguard/Fidelity funds, and isn't really available for questions, and is too large for me - I have to explain who I am every time I call. I don't know enough about tax optimization, so it would be good to learn more about that (I know the basics, and my current strategy (in the earnings phase) is to max out the HSA, 1 Roth 401k, 1 401k, and an additional 25% from the self-employed "employer" portion into the pre-tax fund, and then 2*Roth IRAs, and assuming early retirement, will start moving pre-tax funds into the Roths when at the 12% tax bracket. (So, I'm figuring that is decent, at least) But, for the non-profits, where tax optimization doesn't matter at all (I think), I don't think we are getting *any* value from the advisor, and I've been planning on moving the money to Fidelity, and I think I will print out this article for the organization to assure them I know what I'm talking about. Thoughts?Post: The High Cost of Financial Advice: A Tale of Two Portfolios
Link to comment from July 12, 2025
I also found those two phrases incongruent. I don't know how often my parents *think* about their assets, but they only really look at them about once a year when doing taxes so I would think that is much simpler than every day. I'm not clear as to why anyone would check that often. Are you making changes? Checking to see if your account was emptied by a scammer? Checking the balance? None of that seems simple to me .. I suppose if it is a fun brain routine to watch the money then it is fine, but I would think most people have a simpler plan.
Post: Quinn asks, is there anything wrong with keeping it simple?
Link to comment from July 5, 2025
If your friend lump sums right now, they will be about break even, depending on when they got out. I had thought about getting out because it did seem obvious to me that the market was going down due to uncertainty, and in this case I would have timed it about right. My son asked if I had gotten out the other day so we did the calculation to see how it works have worked out (I stayed in), and it would have saved me 7%, since I wouldn't have timed it perfectly, but as long as you get back in before the market returns to the number that you got out at, you win. I think the "never get out folks" don't realize that you don't have to time the market perfectly. But I would agree in general that you don't usually know what the market is going to do (and I don't know what is going to happen in the coming months if the tariffs "unpause", etc.
Post: Getting Back into the Market Now
Link to comment from May 24, 2025
I don't know if it works for individuals, though I would assume it would. When I received scholarships from organizations that wanted to write a check directly to the college, I had them include a statement that said, "by accepting this money we agree to not reduce the aid to the student" My college endorsed the check without blinking and my aid was not reduced a penny. For any scholarships I received that did not include that statement, we got a letter the following month stating, "we noticed some changes and recalculated your aid", coincidentally, reducing my aid by exactly the same amount as the scholarship. I have had trouble with some organizations not understanding why writing that extra sentence is the difference between a $0 scholarship and actually making a difference to the student they are trying to support.
Post: Gifting Confusion
Link to comment from May 18, 2025
Yes. Some number of years ago there was a large number of fraudulent claims and that solidified my plan of always owing $1k or so (or more on those happy years where my income is significantly higher than the previous so just aim to prepay 100% of last year's amount). With how many people blow their "refund" badly, I've wondered if people would spend it better if it wasn't taken out all year long, though I don't recommend bad savers to owe too much, since they might already spend it before April comes around. But it is always mystifying to me how many people don't understand tax brackets and refunds.
Post: Easy Does It
Link to comment from February 23, 2025
I have had the IRS make errors (in both directions), but at least they paid interest when they made a mistake. (Though I haven't had them take as long as your example, and I didn't have to do much other than a letter and a phone call, etc. I think they've taken 6 months at the longest to resolve their mistakes)
Post: Easy Does It
Link to comment from February 23, 2025
Doesn't this idea of selling off the losers mean that you are selling when they are low, rather than selling the winners that might be at a high point? I'm not in a place where I'm looking to sell off myself but it seems like it would be a better strategy to sell high rather than selling low.
Post: One Stock at a Time
Link to comment from February 23, 2025
My father-in-law has a percentage tier system for funding my kids' Roth's accounts.
The younger kids don't realize the value, but my older ones have read enough books to realize the value of time/compounding.Post: Getting Going
Link to comment from February 1, 2025
Exactly right. I'm not sure why we are subsidizing anyone who thinks they need $100k deduction on their income. I think we should lower the caps on other deductions and credits as well. Though it isn't popular (and would hurt me) I don't think the child tax credit should only be phased out at $400k. Phaseouts of various subsidies should start at $100k. Not doing so only widens the gap between the wealthy and the poor. And though, as readers of the HD, like saving money more than the average person we also can afford more than the average person, so it wouldn't have that much of an effect compared to where money could be spent elsewhere. That said, I don't really think the government is all that good at spending any money, so I'm happy putting money in my pocket for now, but it isn't a good system.
Post: Whither Taxes?
Link to comment from February 1, 2025