'13 money lies you should stop telling yourself by age 30'

Another "depends" question. ... There are a lot of clowns in the financial planning business. That said, some people don't feel comfortable with financial planning and prefer to outsource it. If you do decide to hire someone, try to make sure they have the CFP designation, which is the best credential in that business. Rather than a stock huckster, it means they have the training to look at your complete financial situation and advise you not just from an investment standpoint, but from a holistic, financial well being standpoint. That doesn't guarantee good advise or that their choices will perform, but it does mean they cared enough to work at getting the certification.

Then my only other advise here would be to avoid anyone who works on commission. It means they have incentive to push certain products, and that means they aren't necessarily looking out for your interests -- they want to sell products. If you go with a fee-only planner, they will either charge you by a percentage of your assets or a flat fee. And a lot won't touch you unless you have significant assets. I'd also avoid anyone who takes a percentage of your assets, because it creates a conflict of interest for them -- the right thing for you to do might be to liquidate everything you own, for example, but since that will eat into their percentage fee, they may not advise it. Still, they are usually more legit than commission-based planners, so if you do go with one, make sure they don't take too big a fee -- anything more than 1 percent. You're probably best off paying someone a flat fee. I don't know what the going rates are, though, but it's a service, so expect to basically start out with a negative return on whatever investment products they manage for you -- that negative return reflected in what you are paying them for their advise.

Then lastly, make sure they pledge something in writing that they are a fiduciary. This is where a lot of people mess up, in my opinion. You want someone who is working in your best interests. To legally sell someone an investment or insurance product, the standards are pretty low -- it just has to be a product that is suitable for you.

That doesn't necessarily mean it is the best choice for you, though, or that it is in your best interest. If you have someone manage your money, the only way should be if they put it in writing that they will do it with a fiduciary duty to you, which means that they are not just finding products that fit the narrow criteria of "suitable," but using their training to make the best decisions for your situation.

 

See, this is where I worry for people. I am not a financial planner, and I am not the kind of person who will ever put 60 percent or 70 percent of what he owns into treasuries or corporate bonds (unless there are compelling fundamental reasons to do it). ... Especially in this environment, depending on how much you have saved (if it isn't enough), you might be making a stupid financial decision. You are trying to make sure you have enough money to live off of the rest of your life. And that strategy can obliterate your purchasing power. Inflation is higher than rates on treasury bonds right now (and likely will be for a while with the fucked up monetary policy of our Federal Reserve). And with interest rates on treasuries lower than safe withdrawal rates, doing that eats into your principal and erodes your portfolio -- well, at least a large percentage of it.

On the corporate bond side, you see a lot of people who aren't getting the income they need reaching into junk bonds, or even just investment-grade bonds on the lower end, and that is an area that looks like it is bubbling up and ripe for potential disaster. It's not "safe" the way you are representing it. If you go with more corporates, over treasuries, because treasuries are not keeping up with inflation, you introduce default risk and interest rate risk into your assets. The other thing people are doing to try to find yield in an environment in which there is none (and a lot of retirees are getting killed right now) is increasing the duration of their bond holdings. But that makes you more sensitive to interest rates. IF rates go up, your bonds decrease in value. I actually think you are relatively safe (as in, I think rates are not going to go up significantly in the near term, if I had to guess), but it from a risk assessment standpoint, it is more risk than potential reward.That is because rates can't go down much farther. So having long bonds puts your principal at risk. You don't want that because there is always the potential that you are going to need to sell bonds later to live off of.

Then lastly, from a logical standpoint, I have no idea how old trifect is, but if he is a little more than 2 years from retirement, he is not THAT old. Let's say he is in his late 50s. His life expectancy could be another 25 or 30 years. And if I was that age (hell, I am not that age, and I still plan this way), the thing I'd be most concerned about is inflation -- in particular, health care inflation. If he has more money than he will ever have to worry about blowing through over the next 30 years, it's one thing. But that is a fairly long time period, in which it is VERY likely cost of living is going to become much more expensive. If you are not sitting on a pile of gold, I'd be thinking about growing your money, not getting safe and worrying about throwing off an income (which for the reasons I explained on a bond portfolio, is NOT as "safe" as the standard boilerplate suggests).

 

Yup. There is risk in equities. Potentially lots of it.

Another mistake, I believe people make. There are other things to do with your money aside from treasuries, equities and CDs.

Many of them involve risk, but from a risk/reward standpoint, they can have a much better profile than a portfolio full of stocks.