Final prep for retirement / retirement withdrawal strategies book recommendations?


#1

Hi all,

Long time FI blog reader, but i’m new to the forums here. I’m hoping this community can help me with some research…

I feel very comfortable with where I am with retirement (still in accumulation phase - i’m mid 30s), but my dad has asked me to help him with retirement (he’s 62, ~3 years out) and eventually take over his money management. He’s been paying a financial adviser for many years, has now realized that I know what i’m talking about, is starting to become skeptical of his adviser, and so wants split his money between them and me for management purposes. Which is great!

I have a few things to do outside of my request here:

  • help him figure out what the heck he’s going to do with his time once he’s retired, and
  • understand what his relationship is with this financial adviser is and if he needs to get out entirely (its a local company that our family has used for years, but that doenst mean its worth it…)
  • better understand what his investments are right now

But in the meantime, I just want to better understand retirement withdrawal strategies and other preparations that are required for someone nearing conventional retirement, so i can start to guide him properly. As stated above, I have mostly researched for myself the accumulation phase, but I havent worried as much about withdrawal since its a ways away for me still.

I have read (and own) both of the bogleheads books (guide to investing, guide to retirement planning) and while the retirement planning book is helpful, there’s only a couple of chapters dedicated to really preparing for retirement. Does anyone know of a book that is focused on the final preparations for conventional retirement, and withdrawal strategies, SSA strategies, etc?

Thanks in advance for your help!


#2

Be careful in taking over your father’s money management. Even though you’d save him a fee (if you’re going to do it for free), there might be hard feelings if the market takes a huge hit. I once took over and managed an IRA account for a relative, and when the market dropped, the relative let everyone at a family party know that I had lost some of his money. The stocks bounced back, but after they did, I returned the account to his management rather than have to potentially deal again with an unhappy relative.

Although the usual approach is to draw down investments during retirement, have you considered an approach that continues to grow his net worth throughout his retirement years? If he doesn’t have hobbies or interests that will keep him happily engaged, another approach is to advise him to keep working part time while letting his investments continue to grow. After retiring from one business, I kept managing a second business simply because it was too profitable to quit and required very little management time. The main advantage to attaining FI is attaining the freedom to do whatever you like, and many people work just as hard after FI as before; they just enjoy what they do more than in the past.


#3

IMHO financial advisers are not worth it, they get paid in commissions to steer clients towards certain funds, and if you poke around here enough, you know as much as they do.

Check out this thread and ALL of it’s links, it is right on point, I think;

http://forums.rockstarfinance.com/t/crazy-idea-drawdown-strategy-series-youre-invited/3043?source_topic_id=4467

#4

Some 20+ bloggers shared their drawdown strategies in this “chain.”

Read through the posts, and you’re bound to learn something.

:beers:
-PoF


#5

Definitely agree with you. I wouldn’t just take over anyone’s money management, and we will certainly be talking about expectations before I do. (I am hoping that others dont hear about this arrangement and start asking as well…) We have a good relationship and I feel comfortable that I could talk him through what I was doing and why. Managing expectations will be the key! If he thinks he’s going to hand me the keys and then think “ok great, I dont have to think about it anymore or budget or worry about anything”, then I have failed before we even start. and i’m handing the keys back.

He is still a few years away from retirement and my main response to him currently is that before he even worries about anything else he needs to decide what he is retiring TO - what hobby, what activity, travel, etc. He wants to be a snowbird, but that only covers a couple of months out of the year. So what else? I definitely think part time work is a good option for him. Would keep the brain occupied and keep him active too.

Appreciate the response! There’s a lot for me to think through here…


#6

Yeah, definitely. I havent gone with an advisor for my investments because I dont think its worth it. But, i can understand why others may go that way when they are getting closer to retirement… there’s a lot to consider here with drawdown strategies. Obviously the fees he has been paying to date are sunk costs (I dont know if they are working on commission or not), but I hate to see his retirement eaten away further, especially if they are doing a bad job. I may try to get more detail from him over the holidays. If they are doing great, and arent charging him a ton of money, then there’s no harm in him sticking with them.

The link didnt work for me. I got an error that I didnt have access to that topic. Not sure why?


#7

You need to join the Blogger Lounge, it is easy to do and will let you join the cool crowd, as far the link, you can find all the same info here, http://othalafehu.com/retirement-schedule/


#8

Thank you! this will be a great resource. I will dig through these over the holidays.


#9

Dana Anspach’s book Control Your Retirement Destiny: Achieving Financial Security Before The Big Transition might be a good fit. Admittedly I have not read it but the author has been recommended to me by Fritz @RetirementManifesto whose opinion I value.


#10

And I thought you had good taste…

In all seriousness, Dana’s book is one of the best I’ve read on retirement withdrawal strategies. Well worth the $20. But it!


#11

OMG thank you both @RetirementManifesto and @Mrs.Groovy. This looks like EXACTLY what I want. Unfortunately the library didnt have it and it was $30 on amazon, but… I trust you guys. When I read this:

While never easy, retirement investing in your 20s to your early 50s has been straightforward. But as you get closer to the big event, retirement, it takes a different kind of planning to align investments, retirement accounts, taxes, Social Security, and pension decisions, all for a single objective: providing reliable, life-long income.Control Your Retirement Destiny teaches you how each part works, how one decision affects another, and–most importantly–how to focus on the items you can control rather than on the items you can’t.

I was sold. I’m looking forward to reading it!