No. of Recommendations: 2
...Asset allocation...

There isn’t enough information about the rest of your situation to be able to comment on it. For a retired person having 60% in stocks seems on aggressive side which could be OK if that is what you wanted and the rest of your situation is strong financially.

I am lousy at market timing but with interest rates so low right now it seems like a good time to underweight bonds or at least use shorter duration bonds. Do not automatically equate bonds with safety. When inflation and interest rates increase bonds can be very dangerous.

... I will also have a smaller chunk of money which will remain in former employer stock....

Sometimes there are compelling tax reasons to keep the stock but if not then this should definitely not be more than 10% of your portfolio and less than 5% would be even better. If you decide to sell the company stock then you should know exactly what the tax consequences are before you sell it. Company stock is frequently the “exception to the rule” so don’t assume anything about it.

... am working with a fee based planner...

If the planner used the phrase “fee based” could be a red flag that you need to be careful. This is because “fee based” is not the same as “fee only”. You should get a written explanation of how the planner is compensated.

A “fee based” advisor may be accepting other compensation that you may or may not know about for putting your money in a less than ideal investment. When you ask the advisor about how they get paid, ask about “compensation”, not “commission”, there are lots of ways to give compensation other than commission. In the worst possible case they would charge you a fee and also get compensation from the mutual funds they use.

If you retire around the normal age then you can only spend around 4% of portfolio to not be taking an excessive risk of outliving your money. Since you are younger the percentage will be less. (Opinions on the details differ, Google “safe withdrawal rate” for more information.) This means if you are paying your advisor 1% each year then you are paying the advisor 25% of your income each year. That is pretty expensive especially if the mutual funds don't have the lowest expense ratios(and hidden expenses). You could easily end up paying more than 50% of your 4% income to them each year.

It would be good to use a “fee only” financial advisor that charges by the hour.

Greg
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