Financial Advisor meeting #2

As you remember, I wrote how Mrs. 39 Months does not trust my numbers, and wanted us to meet with a professional financial advisor to bounce my numbers off of and to go through various scenarios. She is very conservative and concerned that we will run out of money. Longevity runs in her family (her aunt lived to 102, and the rest of the women on her side lived into their 80s and 90s). Therefore, I understand her concern – all my planning assumes she lives to 99 (and I live to 97).  

Some folks have asked about the fee we are paying for the advice. He is a fee-only planner, though he does manage some folk’s investments for a 1% per year fee. The fee he is charging us, for a New Jersey suburb of Philadelphia, is a flat $2,900. When we first engaged him, the financial advisor stated that it would be for four (4) meetings. The agenda appears to be something like:

  • Meeting 1: Share with advisor our info (typically in hard copy form, though I gave him ours electronically)
  • Meeting 2: Clarification of numbers, budget, situation, etc. Opportunity for the advisor to ask questions and get answers prior to doing the work, and to share some of his planning assumptions with us
  • Meeting 3: Sharing of the plan and some base scenarios that we have asked for him to run. After review, give him ideas for other scenarios to run
  • Meeting 4: Final meeting to run through any alternate scenarios, finalize the plan, determine next steps

He has also said we could come back “every so often” to update it, since it is already in his system. I am assuming there is a small fee for his work, but not sure.

I was hopeful that, since we gave him all our data electronically in advance, we might have jumped past meeting #2 and gone straight to #3. I wanted to get ahold of the three-ring binder with the big plan and analysis in it! I wanted to look at his planning and compare it to mine (and potentially share it with everyone here). No such luck.

Our planner had been dealing with some family issues (he’s the only child and his mother had to go to hospital for extended stay and many tests) so he was not able to really do the analysis. He still had a few questions and thoughts he wanted to share with us as well. So, no binder, not deep analysis. Still, some of the planning points that he shared/we worked out:

  • Inflation assumption: 3.25% – a little higher than the past 10+ years, but historically accurate in our lifetimes
  • Inflation for medical: 6% – very accurate historically, and something I didn’t consider in my initial planning
  • No inheritance planned – my mother is well off after a life of frugal living and excellent planning. However, we assume we won’t get anything (again, staying conservative with Mrs. 39 Months)
  • Changed the life assumptions from 90 years old to 99 and 97 (see above)
  • Discussed scenarios to look at, including immediate retirement, retire on my schedule of July 2020, and retire when I hit 60 and Mrs. 39 Months hits 62.

There were a few other clarifying questions and for the most part, we are making very conservative estimates and plans. While I am a little more willing to plan “to the edge” of retirement, I do not think we will go that route.

One of the biggest benefits to this is that it has gotten Mrs. 39 Months to open up with her thoughts about retirement, budgets, lifestyle and plans. Despite my prodding over the last several years, she really has not opened up too much about it – until we started to have these meetings. Now we have created a budget, discussed travel and lifestyle, and started working some of the details out. Mrs. 39 Months commented to me after the second meeting that it was a strange thought that, even in our conservative planning, retirement was just 4 years away.

The fact that this is enabling us to discuss it this way is worth the $2,900 fee alone, even if we did not get any analysis.

I will let folks know after we have our third meeting (late October) how that is going. In the meantime, I hope all your plans work out.

Advisor Meeting #1

Mr. 39 Months.

5 thoughts on “Financial Advisor meeting #2”

  1. It will be interesting to see the detailed analysis they give and how it compares to your own projections. Some days I feel very confident, others I worry we won’t have enough but we will probably see a planner next year to review things.

  2. Really like your mindset going into these meetings…

    Granted, there is no shortage of charlatans out there, but the “VTSAX and chill” camp may be oversimplifying a bit.

    1. I’m very interested in the analysis in comparison to mine. Again, the biggest gain I see from this is getting Mrs. 39 Months to discuss these items openly. Definitely worth the money!

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