Use planning tools
When you’re saving for retirement, your children’s college fund and all your other hopes and dreams, it’s natural to worry a little about whether you’re on track. And there’s no shortage of people waiting to give you advice.
For do-it-yourself fund investors who prefer to handle their own money check-ups, the major no-load shops offer a wide range of financial planning tools. Depending on how much hand-holding you want, you can plug your data into online questionnaires for free or schedule an appointment with an in-house financial planner who will assess your progress for a fee and help you figure out what changes you should make to meet your goals.
The Vanguard Group, which has been offering investment advice to clients for about 10 years, recently rolled out a new set of tools aimed at helping retirees and accumulators figure out where they stand. This “financial physical” evaluates your existing portfolio’s asset allocation and tax efficiency, and makes investment recommendations. Clients answer questionnaires on paper or online, and get a 20-page report and phone consultation with a certified financial planner within two weeks.
Two-thirds of those who use the program are in or nearing retirement. The financial plans are complimentary for Vanguard clients with balances of $250,000 or more, and to new clients who bring in at least $100,000; for anyone below those thresholds, there is a flat fee of $1,000.
T. Rowe Price offers a combination of fee-based advisory services and free online tools, including a calculator that helps retiring investors figure how fast they can spend their nest egg. For those in need of more guidance, there’s the firm’s Retirement Income Manager service, in which a financial planner presents a model investment portfolio and dollar amount you can afford to spend every month. There’s a one-time fee of $500, which is waived for clients with sufficient asset levels. Annual reviews are provided to investors with at least $250,000.
For investors who are a bit further from retirement, T. Rowe offers an Investment Checkup for $250, which uses a questionnaire to gather information about investments, risk tolerance and goals. The report includes analysis of the investor’s strategy and holdings, a comparison of their portfolio against the firm’s recommended asset allocation and suggestions for how to adjust it.
At Fidelity Investments, all the retirement planning tools are free, and you don’t have to be a customer to use them, though you might not be able to use all of them online. The Fidelity Retirement Income Advantage, aimed at people who are about 10 years from retirement, is among the best-known, said spokeswoman Jenny Engle. For younger investors, Fidelity offers the Retirement Quick Check, which is a way to see if you’re on track to have enough saved at retirement. Yet another service, Portfolio Review, evaluates asset allocation based on an online questionnaire.