Retirement investment advice

HI Terry,
I am planning to retire at the end of this year when I will be 68 yrs. old and, if needed, would start Social Security. I am VERY concerned about loosing my money like what happened in 2008. We have attended MANY investment/retirement seminars over the past years and I am still very confused who to trust with my IRA and 401K.

I thought annuities were the right way to go since I would never loose my principal regardless what happens on the stock market, but many have told me that is not the right thing to do. There are so many choices for investing in the stock market for example, Rick Edelman who the way I understand it has no managers, rather relies on computer programs where to invest money; Wayne Messmer who does not deal with Mutual Funds; Edward Jones or Charles Schwab, etc. with varying stock market advice. I really don’t want to take the risk of the stock market which is why the annuities sound the safest, would you agree with that? Would you recommend we invest in gold or silver per all the dire ads regarding currency problems in the future on the radio?

Can you please suggest how to know where is the best place to put our savings? Should we go with more than one company? How will I know who is giving the best advice on reducing the tax ramifications, opening a trust, etc.?

Terry Says:  Welcome to the world of “What Next?”   This is indeed a challenging time.  In fact, the Department of Labor is about to come out with some strong rules — the Fiduciary Rules — about what advisors must do and disclose when it comes to handling IRA rollover accounts.  There is so much money, about half a billion dollars, expected to roll out of company retirement plans this year.  And much of that money will rollover into the wrong hands of expensive ripoff investments.

I can give you one suggestion without any hesitation.  Contact Vanguard, T. Rowe Price and/or Fidelity and ask them for rollover investment advice now — before you actually do the rollover.  Given that you have substantial assets (I erased that sentence!) you should qualify for their very personal retirement investment and withdrawal planning services, working with a certified financial planner at either or both of these companies.

They will ask questions about your entire financial and retirement picture, and will give you an investment and withdrawal plan with the greatest chance of reaching your goals– whether to make your money last your lifetime(s) or to leave assets to your children and grandchildren.  And you know that all of the suggested investments will be the lowest cost way to invest. Certainly the plan will include some conservative stock market mutual funds, so you can keep up with inflation over the next 25 years that you are likely to live and use your money.

After seeing the suggested plans, you might even decide to put half with one company, and half with the other company, but that is not necessary.  And you might decide to take a lump sum of money — in your case perhaps $100,000 — and just leave it out of the plan you create with the fund company, assuming it is outside your IRA and therefore doesn’t have to be considered in the withdrawal requirements. .  You can put it in a CD or in Treasury bills (www.TreasuryDirect.gov) and call it your “chicken money” because while you won’t earn much on it, you won’t risk any of it!  That will let you sleep at night while you follow the financial plan of your fund company.

And they will also ask whether you have an estate plan, a healthcare power of attorney, plans for covering the costs of long-term care.  These are all expenses and considerations of retirement.   And once handled, you can enjoy the time you have worked so long to achieve.