I’m helping my sister with some retirement planning. Her company has offered her early retirement and a lump sum payout of her pension, or the standard monthly payment. I’m trying to help her understand the differences between the options.
After our talk, I’d like to be able to recommend a fee-only financial adviser in the Portland, OR area. Does anyone have any recommendations for a good one?
Thanks,
J.
Huh, I actually have an answer for this. Neil Berl in Lake Oswego. (503) 922-2463
I don’t know what fee-only means, but give him a try anyway.
Fee-only refers to how the adviser gets paid. Typically there are 3 methods they get paid:
commission: they get a payment from the investment when they sell it to you.
Annual percentage: they take some percentage of your holdings with them every year (e.g., 1%)
Fee-only: they charge you by the hour for their advice.
In the first two, the advisers interests are NOT aligned with yours. They make money only when you trade, or by how much you have invested with them.
In fee-only, their interest is aligned with yours. If their advice does not pan out, you will stop going to them and they will not be paid for their advice. So it behooves them to do the best for you that they can so that you will keep coming back.
Thanks,
J.
Here is the website for the National Association of Personal Financial Advisors (NAPFA), a professional organization of fee-only financial advisors. There’s a search tool on the homepage.
You might want to look into a [robo-advisor](http://boards.straightdope.com/sdmb/Jackknifed Juggernaut Jackknifed Juggernaut). This seems to be the new trend but you’ll need to do your research.
Your URL is broken. (It points to http://boards.straightdope.com/sdmb/Jackknifed%20Juggernaut%20Jackknifed%20Juggernaut)
Pasted it raw to be sure this time. Thanks.
We had something like that at my last job, through Financial Engines. For a small fee, they managed the allocation of the funds in my 401(k). But the OP is trying to help someone figure out whether to take a lump-sum pension distribution or the monthly annuity payout. I think that requires a person to talk to and run some numbers to make the decision.
I had a friend ask me about this once and my main concern was the viability of the company so I advised the lump sum since the alternative would have been payments from the PBGC.
I guess a human adviser might be better in that case if they’re really going to look at the big picture.
Well, you can take the lump-sum distribution and then turn around and buy an immediate annuity from whoever you want. So you get away from a possibly non-viable company but also get regular, guaranteed payments.
My mother had that choice when she retired. But the annuity payments amounted to the equivalent of investing the money and getting only a 2-4% return on it. We thought we could do better.