I’m 70 and weighing whether to ‘sell everything’ and put it all in Treasuries, or hire a financial adviser even though it would cost $20K a year. What should I do? (2024)

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A well known financial services corporation recommended a company that charges 1%, which would be about $20K. But 20 years ago I invested with a large investment firm and they lost half my money investing in companies that went bankrupt, so I still hesitate to turn my money over to a new one. I could also sell everything and put my money in a Treasury money market fund that currently pays 4.5%. What are my options? (Looking for a new financial adviser too? This tool can match you to an advisor who may meet your needs.)

Answer: First off, congratulations on reaching retirement, and don’t beat yourself up too much about the recent stock losses. Indeed, it was difficult to find good returns in 2022 given the increase in interest rates and inflation. And while you don’t need a financial adviser — though you might find one very helpful — you do need a plan that is more comprehensive than putting all your money in a Treasury money market fund, pros say.

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Your desire to invest in Treasuries due to their guaranteed interest payments is understandable, but that guaranteed return may lose ground to inflation. If you are wondering whether a 4.5% money market yield is sufficient, you’ll need to create a financial plan that maps out your lifestyle spending needs along with inflation to see if that makes sense.

“If you determine from that financial plan that to make your money last throughout retirement you need a slightly higher-than-average return than the money market, then consider a balanced portfolio using a mix of index fund ETFs along with the money market to give you the best short at achieving the desired return over time,” says certified financial planner James Faniel of The Advisory Firm.

Looking for a new financial adviser?
This tool can match you to an advisor who may meet your needs.

Indeed, a good mix of equities (yes, even at age 70), bonds and cash can help you achieve long-term success, pros say. One rough rule of thumb is that the percentage of your money invested in stocks should equal 110 minus your age, which in your case would be 40%. The rest should be in bonds and cash.

“I recommend you keep 6 to 12 months of lifestyle cash flow needs in short-term Treasuries or in an online high-yield savings account that’s FDIC insured and install a conservative investment allocation for the balance of your portfolio that includes exposure to global equities. You’ll need that global equity exposure to help you keep up with long-term inflation,” says certified financial planner Bruce Primeau at Summit Wealth Advocates. “My recommendation would be to reduce your investment fees and install a low cost, tax-efficient passive investment portfolio of ETFs and mutual funds.”

Avoid picking individual stocks, pros say. “Being subject to the risk of a singular company is another red flag in my opinion. By investing in broader markets, you can help reduce the impact of any single company underperforming or going out of business entirely,” says Matt Fizell, certified financial planner and owner of Harmony Wealth in Madison, Wisconsin. Adds Primeau: “Stop picking individual stocks as by the time you find out there’s a problem with a particular company, the stock is down 30%-40% and there’s not much you can do then,” says certified financial planner Bruce Primeau at Summit Wealth Advocates.

Should you opt for a financial adviser?

If you’re looking for more than advice-only money management, like assistance with retirement planning, tax planning, estate tax and more, hiring an adviser can take a huge weight off your shoulders. It can also be helpful to have a professional manage your assets, make recommendations and execute trades on your behalf.

Advisers who charge 1% — which is a pretty normal rate — tend to bundle financial planning services with that asset management fee. Look for a fiduciary (they’re required to put your financial interests ahead of their own) and you may want someone who is a certified financial planner, as they have completed extensive coursework and professional work.To find a planner who fits the bill, the National Association of Personal Financial Advisors (NAPFA) offers a free online search tool. But, you’ll need to do a little homework beyond just selecting a name from a list. “[Just because they’re listed on the site] doesn’t mean they’re practicing financial planning —you need to ask questions,” says Fraasa. Here’s what to ask any potential adviser you might hire. (Looking for a new financial adviser too? This tool can match you to an advisor who may meet your needs.)

Alternately, “you can seek out a robo-adviser for a fraction of the cost if portfolio management is the only thing that has you worried. These are perfectly adequate and can manage a retirement portfolio reasonably well, albeit with little customization and no person behind the algorithm if and when you have questions,” says Matt Bacon, certified financial planner at Carmichael Hill & Associates.

Have an issue with your financial adviser or looking for a new one? Email picks@marketwatch.com.