My retirement fund that I just started was worth $15k in December of 2021. Then, May of 2022, our area was hit really hard. My retirement plan went down to $7k. Today, it’s worth $11k. I lost $4k on my retirement plan. It’s invested in total market funds, some tech, some big cap companies, and healthcare. But every sector has been ravaged by the stock market changes.
I let my bank’s financial advisor handle that. They have apps that calculate everything.
They do. And you can generally trust banks to try and sell you what’s most profitable to them.
They are fiduciaries.
Fiduciary is a legally defined term. Fiduciaries are expected to exercise a duty of care and a duty of loyalty to clients, and as a result, are “held to the highest standard of conduct.” Fiduciaries have a bond of trust with another person (called the beneficiary or principal) and have a legal obligation to act for the beneficiary’s benefit – not their own.
That’s all fine, but just be sure you know how much you’re paying them for that service. Before we switched to self-managed a number of years ago our guys were taking 1.4% off the top of the whole account just to pick a bunch of index ETFs. Market goes up 5% and I only see 3.6% of it. Not good. Plus the ETFs they picked had higher expenses than just going with a whole market choice.
They offered to get us on a plan at 1%. Ha, no thanks.
Yeah that’s bad. We’re with JP Morgan through our local Chase branch and their fee when all is said and done is averaged down to less than 1% of the total account balance.
That’s better for sure. Still too much for me. Our all-in investment cost is 0.05% now. That’s a lot of free compounded yield compared against guided investments which are themselves no better than the average market (on average).
Who are you with?
We are on Fidelity. But self-directed on all the big ones are no fee and free trades these days - Vanguard, Fidelity, Merrill and probably others. Just need to watch the fund/ETF fees to have a total cost.