There are several reasons why you should fire your financial planner.
The most obvious reason to fire your financial planner, is because he or she lost half your life savings in the recession, begging the question why ever seek their advice again?
The not so obvious reason to fire your financial planner, and do your own retirement planning, is because it does not really matter which financial planner you use – almost all financial planners over estimate your retirement savings needs.
When you visit your financial planner, financial adviser, retirement specialist, money manager, or whatever they call themselves, and you ask them how much money do you need for retirement, the answer you receive is wrong. The truth is they do not know how much retirement savings you need – they are guessing.
Your financial planner is using a widely accepted retirement industry formula, that calculates you will need to be able to spend 80% of your current salary in retirement, it is a complete guess.
A guess that forces you to save more for your retirement than is necessary, causing you to work many more years than you need to, that does nothing but earn your financial planner additional commissions and fees. Why are you paying someone a lot of money, to give you a guess, that unnecessarily delays your retirement?
To calculate how much retirement savings you really need, visit the Early Retirement Website and try the Free Retirement Savings Calculator, it compares retirement savings needs using both the Green Retirement and Traditional Retirement formulas. You’re in for a happy shock.
Another truth is that 85% of mutual funds and financial planners do not beat the S&P 500 index. Most financial planners do nothing more than sell clients various mutual funds, the same mutual funds that do not beat the stock market index, so why not do your own investing and save money? The odds are that if you follow the advice found in a basic investing book, you will probably do no worse than your financial planner, and perhaps even better.
Here is a list of reasons why you should fire your financial planner:
Poor Performance
High Fees and Commissions
Inaccurate Retirement Calculations
Faulty Asset Allocation Models
Constant Buying and Selling of Your Investments
In the unlikely event that your financial planner made you money during the recession, then by all means keep him or her, give ‘em a big hug and a box of chocolates. If you insist on not firing the financial planner that lost you money, then at the very least do yourself a favor, and ask them to use the Free Early Retirement Calculator to calculate your retirement savings needs.
Green Retirement offers Early Retirement Planning and Early Retirement Software for only $49. Green Retirement LLC. does not sell investments or offer investment advice.
2 responses so far ↓
1 Spencer Palmer // Nov 17, 2010 at 11:34 pm
Please remove your blog and quit giving godawful advice about retirement! This is one of the worst I have ever seen. Suggesting that a 55-60 year old can retire on less than 3000 a month of income is absurd! Can we say food stamps! That person is going to find out about inflation in a real life lesson around 15-20 years when they go back to work as a Wal-Mart greeter! Of course your plan works fine if you die before age 70! Do you even know what inflation and longevity risk are?
2 admin // Nov 18, 2010 at 4:50 pm
Spencer:
Of course you want this blog removed. You’re most probably a financial planner, who doesn’t want your clients to discover the Early Retirement Blog, who doesn’t want your clients to realize that you are forcing them to keep working, so you can continue to collect big fees and commissions off of them. Your clients can easily and comfortably retire on a $3,000 per month retirement budget. If their assets are properly allocated, another thing financial planners know nothing about, they do not have to worry about running out of savings or inflation, no matter how long they live.
Your profession, financial planning, profits from selling fear, confusion, and false hope. It’s time for you and your cohorts, to stop being greedy and to live up to what you claim to represent, and help people achieve financial freedom instead of keeping people working for your own self interest.
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