Is Common Sense All You Need to Plan Your Retirement?

I’ve read about what to do with my TSP after retirement, but I believe all we can do is use common sense and hope that our money will grow and last.

Q: I read one of your past articles and I was struck by the statement that the average financial adviser does 3.32% better than a person managing their own investments…I have read all the pros and cons of what to do with my TSP money after retirement…I believe all we can do is use common sense planning, invest in stable funds…and just hope that our money will continue to grow and last. I would welcome any comments you may have.

A: While I had no input on any of the reports that assert advisors add not only intellectual but potentially monetary value to retirement planning, I do tend to subscribe to these findings.

Financial Advisors are forbidden to use “past performance” to influence or persuade anyone to invest with them. And for good reason as, “Past performance is no indication of future results.”

The reason I shared this information is that while I am confident most (if not all) Advisors always believed they provided “real long-term growth” value, they didn’t have any empirical data to back this premise up, even for their own edification…until now. These reports do appear to be sound research that confirms those long-held beliefs.

The two following studies found that using a “COMPETENT” financial advisor adds value between 3 – 3.32%.

Note: Finding a competent advisor is an altogether separate conversation.

  • Vanguard’s Advisor’s Alpha (dated: June 2016), – estimates that advice from a competent financial advisor adds value equal to roughly 3% per year.
  • shared a report by Aon Hewitt and Financial Engines research conducted between 2006 and 2012 – Those receiving help outperformed those that did not by 3.32%, net of fees.

I understand the comfort of leaving money in the TSP after retirement. It is possibly all you have known, it is inexpensive, it seems safe, and it is easy. While I understand these often-accepted ideas, I don’t generally suggest leaving retirement savings in the TSP after retirement or even after turning 59 ½ (if still working for the federal government).

If you are interested in my thoughts on the topic, here are a couple of my pieces that will explain it pretty well: TSP or Not TSP? That is the Rollover Question and Is the TSP Too Cheap?

Finally, your last statement raised a “red flag” for me concerning your retirement planning rationale. You state, “just hope that our money will continue to grow and last.”

Indeed, this is the goal. However, “common sense planning and invest in stable funds” seem to be vague statements to give lack of planning the appearance of comprehensive planning.

If I may be frank about your thoughts as you laid them out: When would you, in any other important aspect of your life, accept “hope” as your core principal for making a plan?

If you have a chance, read the results concluded by Vanguard, Aon Hewitt, and Financial Engines. You will learn the growth conclusions were based in part on the ability of a competent advisor to provide excellent coaching, education, rationale (non-emotional) market evaluations and comprehensive planning.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  Investing involves risks, including the loss of principal.  No strategy assures success or protects against loss. Silverlight Financial, Infinity Financial Services and its affiliates do not provide tax, legal or accounting advice. This material is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. For a list of states in which I am registered to do business, please visit .

About the Author

Randy Silvey is the published author of You FIRST, Federal Employees Retirement Guide, one of the bestselling books of its kind on Amazon and Kindle. For over 18 years, he’s been educating and guiding Feds in pursuing wealthier retirement lifestyles. Randy can be reached at 816-524-1515 or visit his website at Securities offered through Infinity Financial Services. Member FINRA/SIPC.