Updated : Sep 01, 2019 in Articles

Help! I Can’t Find a Good Advisor

it’s the weekend and you have financial
questions that need answering that can only mean one thing
it’s time for Jill on money the show that takes the mystery out of your
finances here’s your host Jill Schlesinger welcome welcome thanks for
joining us it’s Jill on money we are broadcasting live from the Capital One
Bank studios and we are just kind of plotting through here getting through
the the almost spring feeling it ain’t spring I don’t care what anyone says I
kind of don’t even think of it as spring until we get past Easter it’s a little
bit here in the Northeast a little bit of a tease these months you get like one
nice day and then yeah something bad happens the next anyway this is not a
weather program it is in fact a show to take the mystery out of your financial
life and that said I know that a lot of you are knee-deep in tax season I know
that there’s a ton of confusion around the new tax law and what has happened
and so we do have a number of tax related posts that I’ve done also some
segments on TV it’s really important that you don’t kick yourself for this
particular tax season but you should absolutely be sure to use this tax
season as a guide for next year change your withholding make different
decisions all those things really important so if you have a tax related
question you’re plowing through your taxes shoot us an email ask Jill at Jill
on money.com and if it’s time-sensitive let us know
because you know we get a ton of emails we want to respond to the time-sensitive
ones I think it’s fair to say that as mark looks at all the emails what he
does first it says who wants to be on the air with us because we like to have
your you on the air we always learn something when we have you live and so
if you can get over your shyness then come on the air and we’ll answer that
question as quickly as we possibly can that is what Nancy did she is calling
from glorious Cape Cod Nancy welcome to the program what can I do for you thank
you very much yes it is glorious dusting today nice well my question to you today
is regarding a sudden wealth situation in that you know I would left some some
money I didn’t I sort of expected but now I have some monies that I need to
take some responsibility for and I’m not quite sure where to go with it ok so
tell us about yourself and do let’s do the before and after so before you were
living your life what was going on for you Nancy at the time I was doing a
contract job up in Boston at MGH and enjoying that but that came to a halt to
an end just about the same time as the issue that I’ve been dealing with with a
family inheritance issue had come to a close ok so these things kind of
happened in simultaneously are you a doctor are you like what do you what did
you do in there oh okay don’t look don’t be like no it’s HR like I mean come on
that’s like you’d be proud of that profession darn it I all right there you
go you owned it so when how old are you I
am 58 years old and before this sudden wealth how much money did you need to
live on you know just ongoing basis to pay your bills but also live your life
yeah yeah I would say you know probably probably 40,000 a year that’s been yeah
well I live in a home that I don’t need to pay for with a very significant other
mmm I don’t have a I don’t have a home expense at all so he’s just my own my
own living expense car and that sort of thing okay you know pretty please pretty
small okay that’s great and you inherited how much
money with about two million dollars holy smokes that’s a that’s a
game-changer and what did you have saved before that inheritance did you have any
money in the bank or in a retirement account not that much to be honest you
know I being on Cape Cod you know we do two and three jobs at the same time
contract work seasonal work and you know just kind of make things work I
don’t have any debt or anything like that so I kill ways get my head above
water but I don’t have anything saved up and most of my work was sales related so
I didn’t have 401ks and the traditional things I hear your people talk about
right okay so now you got this two million bucks that flowed to you and
what so how did you approach it to begin with what was your first step there my
first step was to make sure that I paid the taxes
yes very smart by the way just a little note here because you know even though
the estate tax rule at the federal level was what when was the death when did
that happen well was a long time ago it was in 2000 it was at 1999 excuse me
alright so from but from a federal estate tax level what did you have to
pay in taxes well it was it was in conjunction with us it wasn’t just a
straight-out inherit I say they love a piece of property okay it was the
property located in California hmm interesting
so we knew so when you got the two million dollars that was after-tax yes
okay all after-tax just FYI of course though the weird thing about
Massachusetts is the Massachusetts state death tax pops in at a million I think
still it’s really weird okay so you get the two million what do you do well I
want to be responsible yep and I start looking for people who may be able to
help me to manage it you know thinking about things like getting a will in
order and that kind of thing I also took it upon myself to get extra liability
personal liability insurance so to kind of cover myself in case something would
happen and some you know what I mean yep so got that all covered yeah I tried to
cover all the initial bases and then it was time to try to find some financial
talent and in what I call the it’s sort of the financial industrial complex I
it’s awesome I’d like to use that mark keep that I like that the financial
industrial complex beautiful yeah so I you know I thought he only you know or
somebody who’s going to manage things with a relatively low cost but would get
me you know get my feet wet that sort of
thing so I’m not a very nice guy who had some fiduciary responsibilities so if
that was good to me too right and we we contracted together and he went on what
I would call a shopping spree just because I wasn’t I wasn’t uh you know
familiar with what to do with this money I gave him you know the the permission
to do what he planned to do but I just I guess I didn’t think it was going to
happen all at once you know he spent it all of the money that I had and they not
spent but you know invest invested yes yeah invested pardon me invested all the
money that that we had agreed and I just felt a little bit uncomfortable because
it was just so sudden you know that meant I mean I think I would have been
more comfortable with there like a cost and dollar cost average kind of thing
like a little by little and I and I didn’t think it needed to be said mm-hmm
but that’s how we started and I said okay okay I’ll let this go and it was
just an unusual portfolio and I started my investing career as I call it on the
3rd of January 2018 hold on a second January 3rd 2018 I’m just writing that
down as my start date and then ok so what I’m gonna do is Nancy hang on the
line because we’re gonna go to a break and we’re gonna come right back to you
because we’ve got all the background now and this is a fascinating topic because
there are so many I mean first of all it’s very weird to all of a sudden have
wealth when you didn’t and you’re living your beautiful life on on Cape Cod and
40 grand a year and then boom this thing falls into your lap and then you sound
like you’ve done a lot of research and you you navigate the financial
industrial complex and the maybe maybe the investment dude said I’m going to
put it all – in the these investments at once or not who knows I’ll get more on
that but when we come back we’re gonna find out what happened in 2018 when
Nancy’s advisor did that lump sum investing and where we are today you’re
listening to Jill on money where we are talking about sudden wealth how about
that Jill on money ask Jill at Jill on money comm is your email address to ask
us questions we’ll be right back with Nancy follow Jill on Twitter and Instagram for
more personal finance content just use the handle at Jill on money now back to
the show you’re back with Jill on money and if you’re just joining us let me
reintroduce our fabulous caller Nancy who’s calling from Cape Cod and she
inherited two million dollars I mean that’s huge just huge and life-changing
and so we are talking to Nancy about what she did and Nancy thanks again for
sharing the story with us so you find this investment advisor as you said you
know you talked to him and he’s a CFP or what is he credentialed in some way yeah
he was a chartered financial advisor so he wasn’t a CFP second and she has like
that insurance designation that says he’s in he does planning fiduciary so he
gets the two million he says boom and he puts it all to work kind of freaked you
out a little bit obviously but that said he puts it to work what happened you
started in January of 2018 hey great timing girl right you picked
the first year like the worst year of investing in about a decade but but what
happened for you what did he invest in well you know it was an assortment of
stuff that I didn’t understand and I’ve read your books of now I know I really
didn’t understand everything that he had me involved in and by the way I didn’t
give him the entire sum you know I kept quite a blue quite a bit back oh and
ruse to have oh that no yeah I didn’t yeah I gave him a little bit over half
okay got it you know yep cuz I didn’t yeah so but nonetheless
so there were some Invesco there was individual stocks really yeah that’s why
I say it was kind of like a bumpy GE criminy yeah yeah you know and so you
know he wasn’t a bad guy but I just don’t know I was not expecting that kind
of a portfolio how big out of the gate you know and I didn’t know what
questions to ask that’s really what I discovered you know I thought I was
doing my research and I thought I understood and then when it came down to
people actually doing stuff I wouldn’t have even known the questions to ask
right but now you do because right now I do a
little too late so let’s talk about where on you know where do we stand what
what do you what’s happened now so half the money invest so that I’m just a
million dollars got invested what do you have now now I I’m down about 45 grant
asked after this in you know after all right so we had a little recovery so you
were freaked out in December I presume oh well yes oh yeah yeah I I made two
changes on first those the first guy got me going yeah I stayed with him until
July okay and then I decided that I would make a change to a CFP and like
the guy who had done some writing on sudden wealth okay he unfortunately for
me was in California we had a nice rapport and we could do things over the
phone and that was fine until December and then and then I kind of you know I
have my doubts you know when I’m watching you know you
think you can tolerate this stuff and I say oh okay well you know if I lose a
hundred thousand this year I’ll be ok and then you see it happening and then
it gets scary in a hurry so what you do oh I called California’s hope is there
anything we should do really no but I didn’t believe him so what did you do
after that so after that I had actually there was
somebody here in Massachusetts who had been given who had done a class about
you know retirement whatever’s know and his whole thing was avoid risk avoid
risk you loved that this is your this is like the ecig in your tune baby yeah I
love you no risk okay okay so I met with him and signed something I
shouldn’t have signed and money started disappearing from my Schwab account
without my actual say-so oh my god yeah so 3 o’clock in the
morning I see money shifting from my Schwab account to another TD and I’m
saying hold the phone so I my risk man yes today I said no no no because I
really didn’t want to end my relationship with my CFP at the time
right I was just really scared right and and this thing happened so I now no
longer have my CFP in California although we’re still on good terms and I
can come back any time of course please bring you it you and you and your
money or welcome back whenever currently you know that’s the other thing you know
yeah everybody wants it mm-hmm you’re the most popular girl at the dance right
now anyway so right now I just have some things you know I have hat I sold the
the bond portion of the portfolio in a panic in the third week of December ok
so that was about you know a half of the portfolio at that time so about four you
know let’s see what would that be yeah yeah probably four hundred thousand okay
I sold in December and you know and I haven’t you know higher high interest
safeties right now okay of the two million what’s left what’s left is let’s
see 11.8 okay so we’re not so bad it’s a bit it was a bad first lesson but it’s a
yeah but it’s behind you exactly okay and I have a lot of losses
that I can carry forward oh yes that’s always a nice soothing
reminder of your first entry into the marketplace yeah you did and you learned
a lot of lessons and now you’re probably finding out stuff that you kind of wish
you knew but you know what you know it today and that’s really important okay
so now what are we going to do with you what has to happen now
is we now are gonna go do this the sort of the opposite way we’re gonna say if
if you have a 1.8 million dollars you’ve got to keep a bunch of money that’s just
set aside in cash right it’s gonna make you feel good
and that might be a couple hundred grand because you might need that as a just a
buffer and so if even if and is there any money that you need to spend on the
house or anything like that at this point yeah well yeah we have a recording
studio in my house and we we had a flood while I was away in Boston so there
could be some money spent on the house here and my other thoughts to Joe was
that I might take some of that some of them some of the money that I have and I
might buy another investment whether it’s an investment real estate man we’re
just enough I know now I’m thinking of me thinking that my initial thing was
you you like this beautiful pile of money it’s liquid okay yeah so what I
think you need to do is now you need to sit down with someone who’s gonna hold
your hand and write all of the wrongs that have been done to you and and I’m
gonna help you with that because I am actually going to off the air give you
the name of a couple of people because low and behold I spent some time in New
England and I know people in New England and I know people who will be very happy
to very like methodically walk you through this process and calm you down
and do this the right way which is to say okay we need to get Nancy about
fifty grand a year from this especially before you start collecting Social
Security and we need to make a plan to get you there and then when you start
collecting Social Security you know and say seven eight years you’ll be able to
draw a little bit less from the portfolio but you want to try to create
a portfolio with the least amount of risk possible to get that money out and
so what I think is really important here is that we get somebody to sit down with
you face to face who will do that and I have the person for you ah it’s amazing
yeah I it is home what I want to do is I’m not gonna plug
him on the radio show but I am gonna have someone take care of you and for
everyone else listening this is a very important concept which is when you come
into a lot of money you want to go really slowly and you want to try to
assemble a team that’s really gonna take care of you
and the first step probably that we missed in this was to have somebody sit
with Nancy and understand she’s a brand-new investor and she needs
to go slow so we’re gonna build a plan and then we’re gonna slowly implement
that plan and when she is ready we’re gonna slowly start to make the
investments that get her the money she needs and if you have a weird feeling
then get the heck out walk away so Nancy hang on the line we’re gonna get your
name and for everyone else listening we’re gonna talk more about these
situations when you have some sudden wealth dumped in your lap what do you do
yeah that situation give us a holler ask Jill at Jill on money.com we’ll be right
back back to jail on money where Jill
Schlesinger helps you take the mystery out of your finances you’re back with
Jill on money if you’ve got a financial question we would love to hear from you
easy-peasy to get in touch with us you’re gonna hop on to the website Jill
on money comm that is an incredibly easy way to get in touch with us click on the
contact us button easy you can also just send us an email ask Jill at Jill and
money.com that is what Veronica did I’m just gonna
blow through some of these emails man I am
I know gang we have got a bunch of interviews that are gonna be lined up
but we also know that you’ve got these financial questions some of them are
time-sensitive we’re trying to respond we’re a little buried right now mark and
I sort of made a new year’s resolution with one another that we were gonna try
to get unburied which means we are talking to you and answering your
questions instead of populating the show with tons and tons of guests if we get a
fabulous one yeah we’ll put him or her on but for now is all about you again if
you have a question about your money ask Jill at Jill on money.com
and if I write the sequel to my book the dumb thing smart people do with their
money you may end up in the book that’s what happens okay Veronica asks over the
past few years I’ve had a bit of an influx of money selling my company in
Washington State and I’ve been nothing short of disappointed in my financial
advisor I’m 35 years old my husband is 43 my husband makes $100,000 a year I’m
not earning any money at the moment but here’s our financial situation $150,000
in a savings account $100,000 in an individual stock account that I manage
although I’m not formally trained I just make educated guesses I love that she
says that there’s $300,000 in the managed account with mutual funds and
individual stocks that has lost $40,000 in the past year that’s hard to do
I mean that’s a pretty nasty loss because if you consider this why would
she write this let’s say she wrote this in February so in the last year that’s
kind of hard to do it isn’t it because the market mark was down six ish last
year maybe seven if you own the wrong stuff
eight but she lost 40 grand 12% mmm that’s off I hope she didn’t I
don’t know that’s pretty rough anyway there’s a 350 thousand dollar
mortgage on the house she also owns a rental property that she manages she
owns that rental property outright I don’t know if I’m diversified or if we
have enough for retirement I feel lost I’m getting no guidance from my
financial advisor I really want to optimize having this much money at this
young age I’m not sure who to talk to what direction to go next thank you so
much Veronica Veronica that’s the worth that song Elvis
Costello maybe anyway Veronica you don’t have a financial advisor you got a
crappy broker agreed mark you just call that a cap yeah I think that’s a pretty
crappy broker here’s what you’re gonna do Veronica you need an a real adviser
somebody who is going to put your best interest first somebody’s going to do
full financial planning with you may I suggest that you hop on to the NAP Ville
website NAPFA org naphtha org also what I’m going to do is I’m gonna find I’m
gonna ask a couple of friends of mine who they might know in the Seattle area
Washington State I don’t know if you’re listening in what part of Washington
State but I’m gonna find out if we can get some Washington State financial
advisors who are really going to put your best interest first we’re gonna do
some financial planning for you let’s reach out to some of our friends mark
and find out who on the west coast we can chat with because Veronica needs
help this is this is bad because you know in many respects it’s sort of the
worst of all worlds not only are you paying to have someone manage your
account probably more than you’d like to and that that person is not providing
financial advice but the guy is also doing crap
for you and doing a bad job so you would have been better off doing it yourself
so let’s get let’s get some names for Veronica okay mark ah Lisa he’s going to
be eligible for Social Security Widow benefits in one and a half years
she’s working full time she wants to keep working till she’s 70 my estimated
benefit at that time is right around $1,200 a month I do not expect my yearly
income to be more than thirty or thirty two thousand dollars between now and
then my husband was on Social Security disability he was receiving about nine
hundred ninety six dollars a month when he died I took two payouts from a
retirement account which is a this is a I think this is a state retirement
benefit plan she took two payouts ten years ago so she’s facing the windfall
elimination penalty which no one happened to mention to her at the time
so she figures she would get about a hundred dollars a month from the widow
benefit when I spoke to Social Security a couple of years ago they discouraged
me from taking the widow’s benefit in fact told me I would then not be
eligible for my own higher seventy-year-old rate and would be stuck
with my husband’s rate I very little in savings $20,000 help I don’t know what
to do hmm I thought you could take the widow benefit and then switch to your
own I think you’re gonna have to call Social Security again I think you try
again because that doesn’t seem right to me I’m not sure why it may have
something to do with the windfall elimination so I don’t want to mess that
up but I would try calling Social Security one more time and see if you
can do that oh here’s a PS she’s got a small house with a mortgage payment and
a balance of one hundred nine thousand dollars no debts and that’s it
she says I’m finding it impossible to get a different job right now so yeah I
mean I would call Social Security and and talk to them directly about that I
don’t think that that’s something you want to try to manage on your own okay
this is a note from Richard who listens to us on Cairo and he says I’m a trusted
estate attorney writing to disagree with your blanket screed con
nation of fixed index annuities on the show annuities should be off-limits
almost always but there are fixed annuity and fixed index annuities that
are no Commission modest restrictions yeah that’s great I love it if you have
I agree if you can get if you can get a fixed income annuity with no Commission
and modest restrictions on penalty-free withdrawals and no risk of decrease in
fact you can get all of that from somebody great but my experience is Rick
that unfortunately is that that is not what’s usually sold so if you can find
that and you’re working with a fee-only advisor who is going to help you get
that kind of product great but otherwise I mean I’m not that into them so I go
with the the low-hanging fruit which is mostly avoid them but thank you for your
comments and I appreciate it you’re listening to Jill on money if you’ve
listened if you and if you love any questions send us an email hop onto the
website during the break Jill on money.com you can sign up for our free
weekly newsletter we’ll be right back do I invest here should I put my money
there Jill Schlesinger can help you back to Jill on money your back with Jill on
money hey if you’re listening to this and you work for a big company and you
think that I should come and do a little financial boot camp at that company
shoot us a note the email address is ask Jill at Jill on money.com I’m starting
to do a bunch of these events and it’s all around the book the dumb thing smart
people do with their money thirteen ways to write your financial wrongs basically
I put together this unbelievably gorgeous presentation so now I just want
to use it I don’t want it to be dwelling in the depths of my computer so no
matter where you are send us a note if you’ve got a nice big group you know I’m
not coming for ten people let’s be honest I’m not getting on a plane for
ten people but you got a hundred two hundred people who want a little boot
camp want a little financial kick in the tush a little help there send us an
email it’s ask Jill at Jill on money.com ask Jill at Jill on money.com
okay let’s bang through some more of these emails terry is writing he says he
retired a year ago from the state of residence state of Washington at 61 and
he took a chance on not having medical insurance
as it was too expensive $2,300 a month that he said it was too expensive given
that he only gets $2,300 a month in retirement income now this June he can
collect Social Security then he’s gotta wait for open enrollment in November of
2019 any ideas on what insurance is worth buying then until I turned 65 and
switch to Medicare this to me is one of the worst bets you could ever take I
know it worked out for you boy this reminds me of Annie Duke mark this is
the woman who wrote thinking in bets if this is not resulting I don’t know what
is so you made you probably think you were really smart for forgoing insurance
I think that was really a bad decision you got lucky
okay but that is not a good decision so go to healthcare.gov look at any
associations that you could possibly be a member of maybe it’s an Alumni
Association I don’t know what you did for a living and then you should really
think about getting this coverage and I don’t care what it costs I mean at this
point now you’re in months to go until you can actually get your Medicare but
boy this is a terrible bet to make really terrible so please please just go
get some coverage and you’re gonna have to suck it up I don’t know what else is
going on in your financial life if you have savings but you’re gonna have to
spend some money to do this okay good god I can’t stand that one that made me
that hurts my stomach okay Christopher is freezing in Minnesota when he writes
this I love that and he said his wife and he make a income of about $4,500 a
month our expenses are around 3,500 I want to continue to save and buy a house
and maybe even rental properties because they’ve got experience leasing and
maintaining apartments that’s pretty good
my question I’ve got $35,000 in school loan debt five to six percent is the
interest rate payments are $700 a month I’m wondering a good time to start
aggressively paying down the loan versus savings saving how about now how about
now so he’s got a way he says I’m constantly
getting school loan consolidate offers that are somewhere between two
and a half and four percent I mean you could look at it there’s there’s no
doubt there’s there’s plenty of ways to consolidate the risks are that you now
have a federal loan which has some flexibility there are costs involved in
loan consolidations and you could maybe make this go from you know having a
student loan that might have some you know benefits down the line and I don’t
know maybe just pay it down I’m sort of thinking that now’s the time to pay it
down you’ve got the cash flow you can you can always buy a property you know
and and I don’t know how much money you have in the bank right now I think he
says oh I see he’s got seven thousand dollars in savings you’re not in the
position to buy a house yet use that money pay down the debt then accumulate
your your down payment Christopher and let’s not mess around with us there’s a
lot of risks people are willing to take I wish they would just kind of take a
deep breath and look at what else is up out there and what could really screw
you up alright this is from who who is this Peter is 57 and listen to this
he’s got the opportunity to begin collecting his pension without quitting
his job he’s got wanted I have million bucks in an IRA and the pension can be
taken as a lump sum of approximately a million bucks or an annuity with
approximately seven thousand dollars a month what’s the best way to take
advantage of this opportunity I’ll tell you the best way how about taking some
money and paying somebody for financial advice to run a scenario of what your
retirement looks like unless you want to do it yourself but what you need to look
at right now is number one how much money you have number two how much do
you need how long is it gonna last and does this make sense to have that stream
of income you didn’t mention whether you’re married or not sometimes it can
be very helpful if you’ve got a spouse especially if spouse has a big age
difference I think that you know the easy answer that any broker would give
you is Oh roll that million dollars into your IRA not a problem but that may not
be the best thing for you so I think you need some help and I would get some
hourly advice from a qualified investment advisor one
who will put your best interest first okay come on now I’m gonna do you know
when we’ve finished the show we have to go to a break but we’re gonna we’ve got
another pension question coming right up and I’m gonna michelle is also asking
about lump sum verses and a stream of income pension payment so when we come
back we’re gonna dive more into the lump sum or income stream of income payments
very interesting questions you’re listening to Jill on money if you have a
financial question we would love to hear from you all you have to do is send us
an email ask Jill at Jill on money.com hop on to the website you can buy my
book the dumb thing smart people do with their money thirteen ways to write your
financial wrongs it’s right there click on the link to the book all right we’ll
be right back you’re back with Jill on money if you’ve
got a financial question give us a holler it is ask Jill at Jill on money
comm and we are broadcasting live from the Capital One Bank studios I just want
to finish the hour with another question about the lump sum or stream of payments
this is from Michelle and here we have a couple 63 and a half and 62 and Michelle
says I’ve worked at my job for 40 years I have a pension or the option to take a
lump sum we’re raising our four-year-old grandson who we have adopted oh boy
we’re uncertain which way to go we feel like we could be leaving a lot of money
on the table if we don’t make the right choice they’ve got four hundred fifty
thousand dollars in a 401k lump sum would be five hundred thirty thousand
they’re looking for about an additional thirty five thousand four hundred
dollars a year out of their funds to continue their lifestyle the pension at
a hundred percent survivorship would be thirty two thousand four hundred bucks a
year I think I can do that math pretty fast actually that seems like a much
better deal to take that because you’re I don’t know how long these payments
last but you can kind of see that that lump sum is not that much relative to
the stream of payments I think that if it’s a hundred percent survivorship
you’re really talking about having that money over a many many many years so I
get that you probably it’s a little bit light you need a few thousand dollars
more but I am inclined to have you really sit down and look hard at those
needs and if you do need more money maybe you guys work some combination of
a you know some part-time work and get that money differential because the lump
sum isn’t that much five hundred thirty grand I don’t know it doesn’t seem it
does not seem like five hundred thirty versus thirty two thousand a year just
doesn’t look sound like the math is the right way to do a lump sum now you can
talk to a financial planner a certified financial planner or
someone who is a fee-only planner to run these numbers for you I would be very
careful don’t make the don’t make the election before you talk to somebody but
please please run these numbers it doesn’t look like the lump sums a great
deal okay if you’ve got a question lump sum stream of income taxes education
retirement anything like that give us a holler just go to jail on money comm
click on the contact us button we’ll be right back it’s the weekend and that can only mean
one thing you’re listening to Jill on money the
show that takes the mystery out of your finances here’s your host Jill
Schlesinger welcome welcome it’s our number two you’re back with Jill on
money we are recording live from the policy genius studios here on the far
west side I refuse to call it Hell’s Kitchen because it really isn’t policy
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we are still trying to get unburied from our emails which is why this first
quarter has been devoted to you and your questions so let me get going with that
because I think it’s very important bj writes that I have been divorced since
the summer of 2008 well I kept the house and mortgage my husband signed a
quitclaim deed giving me all the estate write title insurance blah blah blah
since the divorce I’ve paid all the mortgage payments myself last summer I
was getting ready to pay off the mortgage I spoke with a company and
asked them to quit withholding interest as escrow would not be needed the
following year they told me this is the way they always do things they would
send me the escrow once the house was paid off meaning the home mortgage okay
so now the house gets paid off mortgage company sends her a check in her name
and her ex spouse’s name taking it to the bank they said that they couldn’t
cash it because they would need my ex there to agree that he would not object
to me taking the check I contacted the mortgage company they say because both
names were on the mortgage the check must come in both names
despite sending them the divorce decree and quitclaim deed I feel stuck I could
really use this money I have been solely responsible for the home for more than
10 years despite having a signed quit claim I think my ex-husband wouldn’t
feel entitled to half the check and if he wasn’t entitled to the check I think
he wouldn’t sign I hate to contact him he was controlling and abusive la has a
history of trying to cheat me in the past can you help check is gonna expire
soon okay so here is the problem a quitclaim deed does put the deed in your
name but you never actually got him to you never got his name off of the
mortgage and therefore what I think is I think
that the the mortgage company is probably right legally a lot of people
when they get divorced do this that they leave this ex’s name on the mortgage
because they don’t want to refinance and unfortunately this is a situation where
this is essentially a like it’s a mishap it’s a missed step by your attorneys so
here’s what I would do I would go back to the divorce attorney I would have the
divorce attorney try to contact the other side and I would not have a I
would never have a conversation with your ex about this but if in the worst
case scenario that you know he gets half the money it would suck but at least
you’d get the other half so I think that it would be smart that so you know I
think it would be smart for you not to engage yourself but at least get the
lawyer to do it for you here is a here is a follow up about using losses from
the rental property to offset regular income they’re not the we’re not diffuse
ok so the question was about rental property should you pay off the mortgage
and Risa confirms they can’t use losses from their rental property to offset
regular income so they’re not that benefiting from depreciation the
question is still do I pay off the mortgage I say you know what no no don’t
why should you pay it off and lose all your liquidity I still don’t like that
but thank you for checking up on me I appreciate it okay Sarah is 59 years old
retired at 56 after working 35 years lives modestly on bank savings
money-market checking several new ”tis to use when I need them before my Social
Security and pension start I have a 403 B it’s worth six hundred forty grand two
older fixed annuities one is a non retirement 160 mm the second is a Roth
14,000 I have a third annuity 48,000 non-retirement okay
all this stuff what is the question here let’s go my income is low I’ve been
taking advantage of slowly converting some of my retirement funds I co-own a
second home the mortgage is seventy-nine thousand dollars which will be paid off
in five years my primary home is paid off in full the
fiduciary I’m consulting with is recommending converting a good portion
of my 403 B into a fixed uncapped annuity that follows the index why would
you do this I got to the nut graph right at the very end right no no no you have
enough annuity you don’t need stream of payment don’t do this why are you why is
everyone so annuity net manic I don’t get it you don’t need to do this okay
you do not need to do this please I doubt that that person is a fiduciary
but I would go find someone else all right
here is Brad I heard you say you should have a year or even two years worth of
expenses in cash as you’re nearing retirement what’s the purchase purpose
of having a large balance I get the emergency aspect I wasn’t sure why else
you need a larger balance nearing retirement if stocks take a big dive you
would tap the cash until the stocks recover yes that’s exactly it
that’s that is the reason why okay because if you are retired or you’re
nearing retirement and all the sudden the market goes down and you are
planning to live off the money in that portfolio you may prevent yourself from
invading that portfolio which i think is incredibly helpful at that period of
time in your life okay time No no more time too bad Jill all
right don’t worry we got plenty of time to get through a lot of these questions
we’re trying to dig out we appreciate every single one of you who sends us an
email and don’t think that I don’t take that seriously which is why I’m blowing
off all these guests to plow through these emails you are listening to Jill
on money if you’ve got a financial question we want to hear from you
Jill at Jill on money.com we will be right back back to Jalan money where Jill
Schlesinger helps you take the mystery out of your finances you’re back with
Jill on money you know every so often we get a question that just makes me insane
and here is one because this is one that just it hurts me to actually even have
to deal this this is from TS dear Jill we are about to retire at age 66 and 67
a year ago we went to a CFP for a financial plan we paid $18 eighteen
hundred dollars for it during the process we shared information I asked at
least three times if they could only advise and recommend their specific
funds the adviser referred me to later discussions or change the topic it made
me suspicious eventually they were at a beautiful 125 page plan assuring us we
were well-prepared the initial step this means that I’m sure that this means that
their recommendation was to an establish an income stream and to fill the income
bucket in their plan they recommended that $350,000 move move from a 401k to a
single premium index annuity or I don’t know wait a second single premium
immediate annuity sorry about that that’s the I just want to make sure I
got that right right okay there we go that is the kind of annuity where you
put a bunch of money in and the insurance company then immediately
starts the clock and starts pumping out income to you okay so
the plan was that you put the money this 350 grand in into the annuity which was
which for seven years would payout and would allow us to delay taking Social
Security so that we could get that 8% increase every year okay
now a plan paid us a total that was only six hundred fourteen dollars more than
the face value at maturity date it seemed illogical I went online I found
much better rate outcomes at fidelity and and in calls to a USAA contact a
little later I went online and I saw a chat page about the company I’m not
naming the company the company’s process and saw several complaints about returns
and mutual fund we pulled out before committing to switch our 2.3 million
dollar portfolio to their mutual funds my concern now we are exploring services
offered by another financial planning service which is offered with a
fiduciary relationship I agreed to discuss the service because of questions
on the previous plan and ideas what to do with to one hundred thousand dollars
variable universal life policies they looked at our portfolio and and now they
are suggesting buy a Pacific Life income fixed index annuity for four hundred
fifty thousand dollars that will pay out twenty two thousand dollars for life
guaranteed the annuity has a six percent ceiling with quote no chance of loss or
a zero floor I checked online and found that they are one of the few companies
offering this kind of product but with the new ”tis you need to be sure that
it’s a solid company I also read they can reset rates on some annuities after
the guaranteed time but that was not presented in our meeting by the adviser
or his worth personnel I’m also wondering about whether this is a highly
reimbursed it okay so let me just do this I’m also wondering he’s trying to
figure out how much is the rep getting paid
and the advisor affirmed they operate as fiduciaries in their firm our rep is not
yet a CFP there’s a nine percent surrender charge it decreases over six
years I’m now concerned of this guaranteed rate no loss can be reset by
pack life we’re also being advised to use a 1035 exchange to have two of those
two variable life policies to buy another insurance policy the bank based
advisors are recommending we buy this blah blah blah what’s your opinion of
long-term care insurance is a long long email
do you have opinions on the Vanguard personal financial personal financial
advisor program all right here’s the thing mark where is this dude from do we
know okay so we got to find this guy a fee-only person in Minnesota so that
would require me reaching out to my friends over at naphtha NAPFA I need a
nap you know what let’s send them to the guy let’s send them to the guy in
Chicago it’s close enough let’s send them to Roger in Chicago and see if we
can get a real unbiased look here is my problem that I have from this whole
story which is all you want is an objective third a third party to bring
experience and expertise to the situation now I I guess that I am
inclined to think the following I I’m not sure why we need an annuity even if
it is to Nessa to to bridge that gap it may be that you really don’t need the
annuity you know what you can also do send them to Gary in New York just to
talk on the phone with us I think that the problem that I’m seeing here is
there’s a lot of insurance products but I’m that that and you’re right those
insurance products definitely pay out a big Commission so I think you would be
better off just paying for advice and there are people who will just charge
you for advice and so what you may find is that I don’t know if you need to
10:35 these other policies maybe just keep them because once you start with a
new policy you numb you number one you start surrender charges again and number
two you have a no whole nother set of fees and I don’t know if you need long-term
care I mean I don’t know I think that like if you have a long-term care policy
and it’s offered they have they have a current long term care policy through
Hancock aye there’s no reason why to get rid of to
get rid of that John Hancock has been one of the few programs that has
remained pretty stable I don’t know why I just feel like don’t you get the sense
you smell this from way far away like there’s a lot of insurance being talked
about not a lot of smart planning so this is what we’re gonna do we are going
to send you some names of people one’s gonna be a New York based dude he’s
actually been on the show his name is Gary chatsky he’s a past president of
the National Association of personal financial advisors he but he will talk
to you on the phone he talks to people on the phone all the time don’t worry
about that the other one is a guy in Chicago
who is a CFP he is fiduciary he’ll give you some direction and maybe they he
might know somebody closer to your neighborhood they’re in in the Midwest I
am I’m just really leery of this advice so
I think your your BS signal is a smart one and I would be very careful here
here is an email from Rick who wants to know is there any possible way to avoid
taxation on IRA distributions I need the money but want to avoid the taxation if
you need the money you can’t avoid the taxation the way to avoid the taxation
is to make a qualified charitable distribution and then the money goes by
passes you and goes straight to the charity but you need the money ergo
you’re kind of screwed you really need to be sure that you take that money yeah
pay the tax I’m sorry I know it stinks but them’s your choices kiddo
that’s it so I just I know that that’s a bummer I
get it but that’s what you’re gonna do all right when we get back we’re gonna
answer some more of these questions because I got I got a lot of them if
you’d like to send us a note two ways to do it send an email
plain old email remember email so easy it’s like a beautiful way of
communicating I’m so over the whole text and I’m seeing like email and phone were
quite fine I don’t think it was an evolution to go beyond that if you’ve
got a question send us an email ask Jill at Jill on money.com or or you can
always send us a note from the website Jill on money.com where we’ve got tons
of resources and fun stuff out there check it out and if you’re running
around pulling your hair out trying to prepare your taxes be sure to check out
the post on our income tax bootcamp we did it last month but it’s still good
now all right Jill on money we’ll be right back 401ks IRAs refinancing she covers it all
back to Jill on money with Jill Schlesinger you’re back with Jill on
money if you’ve got a financial question we’d love to hear from you just send us
an email ask Jill at Jill on money.com we are coming up to a college acceptance
season don’t forget about that and this is a good prompt for you to be talking
to your kids about college and friend of the pod and friend of the radio show
Beth kobliner has a great section of her website that I’d love to plug it’s a
Beth kobliner with a cake kobliner dot-com just click on the we need to
talk College we need to talk college that’s a good one here’s a note from
Laurel about college I have two children my son is a sophomore in high school my
daughter is in sixth grade and I have been contributing to their 529 plans and
savings accounts for years after I reviewed the results for their 529 plan
the plan lost money this past year we live in North Carolina we have a North
Carolina and also a Virginia 529 account what is
your recommendation for how to invest for my son the sophomore I’m concerned
about continuing to contribute to a portfolio that is not earning any money
with college in the near future I wonder why that is
I would suspect that you know maybe that as you came in to the end of December
there was maybe a loss in the stock section but what you can do is let’s see
where the account stands now if you want you know first of all you don’t need the
money for a couple of years but you can move into something where you direct the
money and you can try to keep some of the money fixed then one problem that I
have with the age based 529 plans is I think they tend to have a little bit
more risk than most P both realize it’s sort of the same in
the way that I look at any target date fund or any of these blended funds where
they’re trying to invest on your behalf based on your age so I’m just gonna go
look in the North Carolina plan for a moment it’s called the c FN c and i want
to see what the heck they got here in terms of investment options you can
choose one or more they have low-cost age base and individual options so let’s
look at these investment options I wonder so there are different options
there’s a conservative a moderate and an aggressive track so interestingly enough
so here’s what I did I went to look at I went just for the heck of it
I wanted to see what percentage you say your kid must be 15 16 years old even if
you were in the aggressive one that would have had 37% stock and 62% bond
that doesn’t seem like too bad so I wonder have you done something else
have you put your money somewhere else in this plan did you choose individual
options that were not maybe you chose a a aggressive portfolio I don’t know I mean that’s what I don’t
know what you’re invested in so it’s hard for me to comment there are a lot
of different choices these are by the way Vanguard investments so there you
can do individual you use absolutely can do individual less risky you can have an
income portfolio you can have an interest portfolio a fdic-insured
portfolio but with that I need more information but the message here for
everyone listening is when you would sign up for these age based plans there
and there’s lots of choices maybe when the kids are young you’re picking
aggressive which may be perfect but you know maybe you’re like Laurel and you’re
all the sudden the kids in high school you will oh wait a minute I don’t want
it to be so aggressive so listen this is important
pay attention to it but send me more information so I can actually tell you
what to do Laurel okay we have here who is this gee it’s a it’s just a letter G
I listen to you on ksf Oh on Sundays and I’m 62 years old a federal employee I
planned to work for 10 or 15 years I just found out that I could also do a
Roth IRA for $6,500 yeah so that’s good yeah do it the question is whether it’s
to go to Vanguard or TD Ameritrade doesn’t matter either one of our fine I
would get a low-cost index fund you’re 62 years old I know it’s a Roth but you
know maybe you just pick a large stock index fund and a large bond index fund
and call it a day and I think that it’s you know keep the cost
down and you can hold and either you could do an ETF but I think you’re gonna
keep adding to it so I might as well widen that line that just do an index
fund question 5 was do you take any clients
no I’m not in the client business I I got out of that that was fine thank you
14 years of that was plenty you guys killed me uh here we go here’s
someone who listens to us on whas in Louisville who’s looking for a certified
financial planner it’s Mary and she wants to know wants to know
about investing in real estate she wants somebody who is knowledgeable about an
experience working with real estate investors so funny and then by the way I should
look her up when I’m in town because my cousin lives
in Louisville true enough uh I mean look I think you can ask a fee-only advisor
do you have some experience with real estate maybe you ask the Realtors that
you know in town if they know some financial advisors but again please be
very careful about making sure that you are getting somebody who is putting your
best interests first getting a fiduciary you can go to naphtha and a PFA and ask
them straight up you have any experience with real estate investments okay
Jeffrey writes that he’s coming to the end of a three-year lease the residual
value to buy it will be 24 grand I don’t want to take on a new lease or a car
loan I had to use a bunch of my money blah
blah blah what do you think of this idea don’t use a Roth to buy a car don’t use
your retirement plan to buy a car if anything just get a car loan and I know
you don’t like that but I would actually prefer you do that
it’s boring but it’ll work alright you’re listening to Jill on money ask
Jill at Jill on money.com is our email address and check out our
sister podcast it’s called Jill on money you can get it on Apple stitcher radio
comm Google Play anywhere else you find your favorite podcast we’ll be right
back 401ks IRAs refinancing she covers it all back to Jill on money with Jill
Schlesinger you’re back with Jill on money if you’ve got a financial question
why this is the program for you woohoo give us a holler two different ways you
can hop onto the website Jill on money.com and there you can read listen
watch sign up for a free weekly newsletter you can also buy the book I
am gonna hock this book for the rest of my life there may only be one book in me
ladies and gentlemen and therefore if you I don’t know if like you buy enough
of them then perhaps I’ll be able to write another one but it was so painful
and exhausting to do it that I’m not sure I got another book in me but if you
guys demand that I will make it happen the way that you can demand that is just
by buying the book as is right now the dumb things smart people do with their
money thirteen ways to write your financial wrongs it is available any of
your book sellers or at Jill on money.com
okay here we go from Debra subject switching financial advisors this is
interesting I’ve got about a million and a half bucks it’s split between two
financial advisors nine hundred at one six hundred at the other I’m looking to
go all-in with one because I’m losing confidence with the other the one I’m
leaving has my account invested at higher risk than I am comfortable with
now that I’ve retired my issue how to accomplish this
transaction without having to explain the investment strategy of the other
advisor I’ve been with Merrill Lynch been with a Merrill Lynch advisor for
about ten years or so and with a Schwab advisor for about four years and I feel
that my Merrill Lynch account is invested way too heavily in stocks 8020
for my age I’m 62 anyway I’ve had the Merrill Lynch account analyzed by the
Schwab guys they feel the same way would it be good for me to have an impartial
analysis done by yet a third party how do I go about that without having the
person try to persuade me to invest with them okay so if you want a third party
what you could do is you could hire somebody by the hour to actually look at
both of these accounts and you can say be upfront I want to pay you by the hour
to do an analysis of these two accounts it might cost a couple thousand bucks
you know and they’ll give you an honest appraisal just make sure that person is
a fiduciary meaning they’ve got to put your best interest first and if you can
pay them by the hour then they get compensated for their time and you could
say I am staying with one of these two people however I just have this sense
that you already know the answer and I’m not sure that you need a third party so
the real the real the reality is that unless you’ve taught have you talked to
your Merrill Lynch advisor about downgrading the risk if if so and they
haven’t responded that that’s bad if you just want to leave Merrill Lynch you
don’t have to go nuts you could literally say to the Schwab guys and I
presume that the Schwab people are I’m not sure if they are fiduciaries or not
but my guess is that the Schwab folks might be independent because they’re
clearing through Schwab and you can say first of all say to them okay what is
the cost will the cost differential sway you now that you have a million and a
half it with the Schwab account you want to get a cheaper fee you want to try to
negotiate a lower fee for yourself but I don’t think that there is again
presuming that you really like the Schwab people and you like the way
they’re managing your money and it’s consistent you don’t owe any
explanations you know 100 years ago when I was a
financial adviser I would always want to hear from somebody to tell me like why
they’re leaving but you don’t have to do that and in fact what you can do is you
can initiate the transfer at Schwab and the whole thing will happen very
seamlessly and you can then once the transfer is submitted
tell your Merrill Lynch folks it’s been great I’m consolidating thank you very
much goodbye you don’t even do it on the phone you can write a nice letter which
would be perfectly reasonable but I would also really I would press the
Schwab guys to figure out how much that fee is going to drop by I think that
would be great I really I think that we really be good so that’s my two cents
and I think that you would be better off for doing that okay I know it’s hard
it’s like breaking up with somebody it is I get it that said I really want to
remind everyone you’re entitled this is your money and you know you’ve also got
to communicate so if you feel like you have not communicated with a broker or
you haven’t been heard those are two different issues right because if you
haven’t communicated and they’re doing what they do then shame on you but if
you have communicated and they have not responded to that then that’s shame on
them if there’s something in between or you just really want to move you can
move don’t worry it’s gonna be fine I would really want to encourage people
that having open dialogues good financial planners really want to hear
from you and want to have open honest dialogue and if you can do that you’re
gonna have a richer and probably more successful relationship but if you
expect people it’s just like with your spouse if you expect your spouse to read
your mind even though mark totally expects that of me and I’m not even his
spouse I’m just his work spouse but he does kind of read my mind
you know if you expect that it’s gonna probably not end up so great so I think
that in your case it would be it would behoove you to try to communicate if you
haven’t but if you just want to move move don’t
worry about it you are entitled okay you are absolutely entitled and you I
don’t even think you and you think she needs a third opinion I don’t think so I
think just go but again before you go find out from the Schwab can you reduce
my fees because I’ll have more money with you
I’d be interested to hear what they’re charging you I bet you’re gonna pay less
than what you’re paying at Merrill Lynch also with all due respect to you to my
friends over at Merrill Lynch Bank of America Merrill Lynch bammel as they
call themselves all right it’s Jill on money would you like to get on the air
with us send us an email ask Jill at Jill on money comm and by the way
subscribe to our podcast it’s called Jill on money you can get them Apple
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Jill on money the podcast all right we’ll be right back you’re back with
Jill on money if you have a question just shoot us a note it’s ask Jill at
Jill on money.com because we filled them all right here in the policy genius
Studios policy genius is the easy way to compare and buy life insurance all right
mark get ready here’s from a listener who happens to work at 60 minutes by the
way hoo-wah has some ideas so let’s see if
everyone’s going to let’s let’s try to see which ones you all think we should
do so write in if you like any of these ideas thanks for taking the time to
consider this here are some ideas and since I’ve listened to so many free
episodes I probably should do something in return
okay you ready here’s one idea can a life insurance salesperson who is also a
CFP truly be a fiduciary that’s one question if one spouse is 8 to 10 years
older than the other but they retire at the same time so the older one isn’t
home watching let’s make a deal for eight years while
the younger one keeps working what advice can you give the younger spouse
advanced directives they seem to be a moving target and you always hear
stories about doctors in hospitals saying oh you stubbed your toe and now
you’re on a respirator anyway so can you talk more about advanced directives and
so how about that you like those mark that’s pretty good
maybe we should get a doctor on to talk about advanced directives I’m intrigued
by that so the American Bar Association’s website says advanced
directive laws merely give doctors and others immunity if they follow your
valid advanced directive doctors can always refuse to comply with
your wishes if they have an objection of conscience or consider your wishes
medically inappropriate however they may have an obligation to transfer you to
another healthcare provider who will comply ah all right
I think advanced directives should be revisited as should health care proxies
every couple of years and anytime you go into a hospital okay have these
conversations hey thanks buddy anyone else have ideas for the show send
us questions or segment ideas or guest ideas we’d love to get them and we love
talking to you thank you so much for listening ask Jill at Jill on money.com
don’t forget to go out and buy that book the dumb thing smart people do with
their money thirteen ways to write your financial wrongs we’ll see you next week you

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