Issue with Financial Planner--looking for thoughts/input

[lifesavacation]

All good steps! My money anxiety goes the other way - I check too often!

Me too! We’ve experienced fraud several times. My anxiety would be through the roof if I didn’t check my accounts at least weekly.

 

[CrystalClear82]

I will try to keep this short. Figures have been changed for privacy...

Every month, DH and I take a withdrawal from his IRA. Taxes are taken out, and the balance, $10,000, lands in our checking account, around the first of the month.

Last week, my bank sends an email, saying I'm about to overdraw my checking account. I freak out, since my checkbook shows a balance in the thousands (yes, I still use paper checks and a paper balance book thingie--no criticism, please! We just don't like online banking.). I call my financial planner, his team works to get several thousand transferred in to the checking account. No overdraft fees or bounced checks--whew! But, I don't know what happened (massive math error? hackers? spendthrift alter-ego?).

This week, I get my monthly checking statement--I must admit, I don't usually check these closely, but I did this week. It showed that our deposit wasn't $10,000, but $5011.38. I look at the August statement: $10,000 deposit, as expected. July statement: deposit is $5082.97. June and earlier are $10k, as they should be.

I sent an email to our financial planner, who is supposed to be handling this, asking what happened. His underling calls me, says it's "an error, deep in their system, that's been corrected", or something like that. That's all the explanation I get.

The more I think about it, the more questions I have. Like, why July and September, but not August? Was there a problem in August that was corrected? If so, why wasn't there more diligence, and why weren't other months looked at? Why the two different, odd amounts? Were taxes taken out? At what rate? Did this happen to other people? Should we be concerned about other accounts? If it was only us, were we hacked somehow? What are they going to do, moving forward to make sure this doesn't happen again?

We were fortunate in that our bank caught it before it became catastrophic. We're also fortunate that we had other money to pull from, to prevent a catastrophe. Others might not fare so well.

I sent my questions to the planner, he's calling me Monday for a full discussion.

So, my question is, what would you do? Would you still have confidence in your financial planner and his team? What other questions should I ask? Any other thoughts? Thanks for reading.

I build retirement plans for a living, so I'm sure you can imagine the look on my face as I read this. Mistakes do happen, but the passive aggressive answer your FP gave you...is bs.

"We" tell your institution how much to send to your bank account every month. Usually set-up in the form of an automated w/d on or around the date that has been discussed... (Which sounds kinda like what was happening.)
My idea of what could be happening, which idk without looking at their process, sounds as though the office wasn't during their part operationally. Which consists of what we'd call "raising cash" for the withdrawal. --- Planners dont like to leave money sitting in cash, bc "we" dont make money on it.
From the time that the stock positions are sold to it hitting your bank account is approx. 3-5 days. Depending when the transaction is done.
If there isnt enough cash available for the w/d, "we" get a notification to rectify it.

The part that is puzzling to me are the odd dollars amounts... again my speculation is that there wasn't enough cash available, and what was they submitted?? i dont know..

Mistakes do happen, but if the FP can't be transparent with you and take ownership of the mistake... I'd start looking....

 

[QueenIsabella]

Yeah, money anxiety is a funny thing. I have 2 kids with generalized anxiety--both are getting help--and I told them, "It's weird. I always thought the money anxiety would go away when, you know, I actually had money. But, it doesn't. I just have to learn to live with it and not let it win. I liken it to going to the doctor's office and not wanting to step on the scale--just because you don't look, doesn't mean you're skinny!

I did take a look at the online investment accounts this morning--again, it's weird, because I feel funny looking at DH's stuff (after 36 years of marriage...), but, he doesn't care at all. His IRA shows "weird" withdrawal amounts, but the tax rates (federal, state) look appropriate for the withdrawals, if that makes sense .

The October withdrawals were even showing up (it's supposed to land today--the 1st, but will likely show up tomorrow, since it's Sunday).

CrystalClear82--I appreciate your insights. I had figured this would be an auto-pilot sort of situation--wouldn't a lot of people do automatic monthly/quarterly IRA withdrawals? We don't typically have a lot of cash in our IRAs--there might be some, if we were re-balancing or otherwise shifting investments. Mostly we have mutual funds in the IRAs. We do have many different accounts, including a money market one that receives dividends, but that's not in an IRA.

 

[dvcgirl67]

Yeah, money anxiety is a funny thing. I have 2 kids with generalized anxiety--both are getting help--and I told them, "It's weird. I always thought the money anxiety would go away when, you know, I actually had money. But, it doesn't. I just have to learn to live with it and not let it win. I liken it to going to the doctor's office and not wanting to step on the scale--just because you don't look, doesn't mean you're skinny!

I understand your money anxiety when it comes to the retirement nest egg. In my case it comes from not having enough as a child. So it's that scarcity mindset. Now...we have enough....more than enough to retire now, but have decided to continue to work because we need to stay in the area for older family members and two old dogs. We don't want to retire here, and so we're just going to continue to work for up to five years and travel more during that time. So, we're effectively padding the nest egg even further and creating a five year "bucket" for those first five years of retirement. I can see our balance and now have looked at pretty sophisticated software projections of lots of scenarios we're playing with.....tending to be ultra-conservative with projections...and we always come out as successful with respect to our spending plan. And still...I know it will be quite an adjustment to begin to withdraw from those accounts. The "black swan" events concern me.

During the times that I worry I remind myself of all that our portfolio has endured over the last 27 years of saving and investing. A recession right out of college, the dot-com bust in 2000, 9/11, a nasty recession from 2001-2002...and ten years of flat returns for the S&P 500. In 2003 my husband was laid off. Then the housing boom, bust and the Great Recession, followed by the worst pandemic in 100 years, a market plunge, then soared, and then the worst inflation in 40 years. After all of *that*....we're in great shape. But, those black swan events still cross my mind. It's one thing to encounter them when you're working and hopefully still employed....quite another when you're living off of that nest egg alone (and SS when it kicks in).

 

[tvguy]

I

During the times that I worry I remind myself of all that our portfolio has endured over the last 27 years of saving and investing. A recession right out of college, the dot-com bust in 2000, 9/11, a nasty recession from 2001-2002...and ten years of flat returns for the S&P 500. In 2003 my husband was laid off. Then the housing boom, bust and the Great Recession, followed by the worst pandemic in 100 years, a market plunge, then soared, and then the worst inflation in 40 years. After all of *that*....we're in great shape. But, those black swan events still cross my mind. It's one thing to encounter them when you're working and hopefully still employed....quite another when you're living off of that nest egg alone (and SS when it kicks in).

We're in the same boat, with a few more years under our belts. Retired two years ago after 42 of saving and investing. Even in the worst year, our total investment portfolio never lost value. Only one fund lost value, yup, a tech fund in 1999 but other investments more than made up for that. Lost my job in 2005 when my employer was sold. 59 of the 105 employees were replaced, but to avoid getting sued, they did offer a nice severance package. 2 weeks pay for every year you were there, and I had been there 16 years. Only unemployed for 4 days.
The key words in investing for us. Conservative, diversified and laddering.
And we retired early, and applied for my full social security last week. I'm eligible come December, so won't get my first check until January. More than I was bringing home working.

 

[CrystalClear82]

Yeah, money anxiety is a funny thing. I have 2 kids with generalized anxiety--both are getting help--and I told them, "It's weird. I always thought the money anxiety would go away when, you know, I actually had money. But, it doesn't. I just have to learn to live with it and not let it win. I liken it to going to the doctor's office and not wanting to step on the scale--just because you don't look, doesn't mean you're skinny!

I did take a look at the online investment accounts this morning--again, it's weird, because I feel funny looking at DH's stuff (after 36 years of marriage...), but, he doesn't care at all. His IRA shows "weird" withdrawal amounts, but the tax rates (federal, state) look appropriate for the withdrawals, if that makes sense .

The October withdrawals were even showing up (it's supposed to land today--the 1st, but will likely show up tomorrow, since it's Sunday).

CrystalClear82--I appreciate your insights. I had figured this would be an auto-pilot sort of situation--wouldn't a lot of people do automatic monthly/quarterly IRA withdrawals? We don't typically have a lot of cash in our IRAs--there might be some, if we were re-balancing or otherwise shifting investments. Mostly we have mutual funds in the IRAs. We do have many different accounts, including a money market one that receives dividends, but that's not in an IRA.

QueenIsabella,
Yes, a lot of people/clients do take monthly withdrawals on their account(s).
It's auto-pilot process if it's done correctly by the operations team in the office. A good office would have someone who checks on account activity daily.
I'd venture to assume you're not the only client there who has encountered this problem with them.

I'm sorry that you're experiencing this.. no one should have to fear whether or not their money is going to be there when they need it.

 

[QueenIsabella]

I talked to our financial planner. He said they were doing a complete audit of their entire system. In addition, he's on some executive review board, that deals with overall issues, and he's going to bring it up with them.

He said that getting an IRA withdrawal is a 2-step process--Step 1 is converting the appropriate amount of money from stocks/bonds to cash, then step 2 is taking the cash, deducting taxes, and then sending it out to the client. Step 1 wasn't working right--not enough cash was being generated, which is why lesser amounts of cash landed in our checking account. They're looking into why that happened. It seems to me that it should be a simple, automated process.

I have a tough time believing that this is the first (and second) time this has happened in the history of the company.

On the good side, appropriate taxes were taken out for the amounts involved, and October looks okay. I will be looking at the checking account in a day or two to make sure it lands properly--I want to give them a couple days, since the 1st was on a Sunday. And I don't need the money today versus next week.

DH and I are still talking and considering our options.

 

[princesscinderella]

I talked to our financial planner. He said they were doing a complete audit of their entire system. In addition, he's on some executive review board, that deals with overall issues, and he's going to bring it up with them.

He said that getting an IRA withdrawal is a 2-step process--Step 1 is converting the appropriate amount of money from stocks/bonds to cash, then step 2 is taking the cash, deducting taxes, and then sending it out to the client. Step 1 wasn't working right--not enough cash was being generated, which is why lesser amounts of cash landed in our checking account. They're looking into why that happened. It seems to me that it should be a simple, automated process.

I have a tough time believing that this is the first (and second) time this has happened in the history of the company.

On the good side, appropriate taxes were taken out for the amounts involved, and October looks okay. I will be looking at the checking account in a day or two to make sure it lands properly--I want to give them a couple days, since the 1st was on a Sunday. And I don't need the money today versus next week.

DH and I are still talking and considering our options.

Glad to see your FP followed up with you and gave you some answers and the money trail at least was correct.

 

[QueenIsabella]

Minor update...I got a new phone yesterday. DS17 helped me set it up and transfer the SIM card, etc. Then, DD20 stopped by after work and helped me set up the online banking app and a few others--most important, to her--the Chick-Fil-A app! (I get points for free food! Right now, I can get a free brownie, but I've gotten free mac and cheese! Best app ever!)

I also set up auto-pay on the mobile phone account, because you save $10 per month per line. We're a family of 6 (oldest is launched, but somehow still on our cell phone plan...). So, $60 a month in savings--I need to get over my money anxiety on this! They'll send me notices and I'll write it in my (paper) planner to remember that it's coming out.

 

[princesscinderella]

Minor update...I got a new phone yesterday. DS17 helped me set it up and transfer the SIM card, etc. Then, DD20 stopped by after work and helped me set up the online banking app and a few others--most important, to her--the Chick-Fil-A app! (I get points for free food! Right now, I can get a free brownie, but I've gotten free mac and cheese! Best app ever!)

I also set up auto-pay on the mobile phone account, because you save $10 per month per line. We're a family of 6 (oldest is launched, but somehow still on our cell phone plan...). So, $60 a month in savings--I need to get over my money anxiety on this! They'll send me notices and I'll write it in my (paper) planner to remember that it's coming out.

Make sure you don’t save your login information for your banking app on your phone, enter it manually each time.

 

[wabbott]

Minor update...I got a new phone yesterday. DS17 helped me set it up and transfer the SIM card, etc. Then, DD20 stopped by after work and helped me set up the online banking app and a few others--most important, to her--the Chick-Fil-A app! (I get points for free food! Right now, I can get a free brownie, but I've gotten free mac and cheese! Best app ever!)

I also set up auto-pay on the mobile phone account, because you save $10 per month per line. We're a family of 6 (oldest is launched, but somehow still on our cell phone plan...). So, $60 a month in savings--I need to get over my money anxiety on this! They'll send me notices and I'll write it in my (paper) planner to remember that it's coming out.

You may want to think about adding a check register page with reconciliation to your "Spreadsheet of Phenomenal Power." Several years ago, my SIL built one for me that has two balance columns, one that has the current balance and the other with the reconciled balance. When the check clears, I put an x in the cleared column and it deducts the amount from the reconciled balance. It has been handy to have all the transactions on the sheet, so I can look at something 2 or 3 years ago when I need to, rather than digging through old paper check registers.

 

[iwannabdduck]

QueenIsabella,

I hope what I have to add is of value and not useless noise, but I read this post from the very beginning because I had the VERY SAME thing happen to me in August with an IRA withdrawal. An new scheduled set of planned monthly withdrawals to my checking account came in at $0.25 in August. No joke. It took a few days for my financial planner to figure it all out, but my mutual fund failed to make the Step 1 action your advisor described in his 2-Step IRA withdrawal process, and the error alert she was suppose to get when that happens, did not happen. Absent the Step 1 action, my 25 cent deposit was simply the small interest balance in my money market settlement fund. This all got corrected, and the September withdrawal worked perfectly. I share that with you to let you know you are not alone. As others have pointed out, the important thing is work through the issue with your advisor directly. Things like this happen.

Years ago, I got an ugly phone call from MasterCard because the check I mailed them to pay the monthly bill bounced for insufficient funds. I knew that wasn't true, but the customer service preps at MC treated me as a guilty customer until I asked them why this would happen when my bank told me they had no record of issuing an insufficient check notice on my account. Boy, did they ever get quiet when I said that. As it turned out, MC used the Automated Clearing House network to cash my check, and ACH sent my check to the wrong bank. Once MC confirmed all this, they rescinded my service charges and penalties, and sent me letter of apology. Auto-pay, online, written check, mailed monthly statement ... it don't matter. Things like this always seem to happen. Whatever system you have to correct mistakes you are comfortable with is what matters.

BTW, since you mentioned a new cell phone ... I don't know about others, but my cell phone seems to be way more integrated into various accounts and companies I do business with than I appreciate. So much so that I specifically told my wife that if anything ever happens to me, don't cancel my cell phone right away. She may need it for 2-factor verification, or some other identify verification requirement. When I casually mentioned this to my tech-savvy kids, they laughingly congratulated me for finally figuring that out.

 

[mjkacmom]

It’s actually easier to prove you made a payment through online banking than mailing a check as the transaction is registered through your online bill pay, they know exactly when you submitted the payment request and when it should have arrived. If there is an issue you can contact the bank through the individual transaction inquiring about it if the intended recipient doesn’t receive it. If there’s fees associated with the payment not being received they will request the fees be waived since technically it should have been paid on time.

I have one medical company that keeps re-billing me even though I paid through online checking. I click on the transaction on my bank’s website, which shows a copy of the deposited check (proof of payment) and email it to the company. Love online banking.

 

[QueenIsabella]

QueenIsabella,

I hope what I have to add is of value and not useless noise, but I read this post from the very beginning because I had the VERY SAME thing happen to me in August with an IRA withdrawal. An new scheduled set of planned monthly withdrawals to my checking account came in at $0.25 in August. No joke. It took a few days for my financial planner to figure it all out, but my mutual fund failed to make the Step 1 action your advisor described in his 2-Step IRA withdrawal process, and the error alert she was suppose to get when that happens, did not happen. Absent the Step 1 action, my 25 cent deposit was simply the small interest balance in my money market settlement fund. This all got corrected, and the September withdrawal worked perfectly. I share that with you to let you know you are not alone. As others have pointed out, the important thing is work through the issue with your advisor directly. Things like this happen.

Years ago, I got an ugly phone call from MasterCard because the check I mailed them to pay the monthly bill bounced for insufficient funds. I knew that wasn't true, but the customer service preps at MC treated me as a guilty customer until I asked them why this would happen when my bank told me they had no record of issuing an insufficient check notice on my account. Boy, did they ever get quiet when I said that. As it turned out, MC used the Automated Clearing House network to cash my check, and ACH sent my check to the wrong bank. Once MC confirmed all this, they rescinded my service charges and penalties, and sent me letter of apology. Auto-pay, online, written check, mailed monthly statement ... it don't matter. Things like this always seem to happen. Whatever system you have to correct mistakes you are comfortable with is what matters.

BTW, since you mentioned a new cell phone ... I don't know about others, but my cell phone seems to be way more integrated into various accounts and companies I do business with than I appreciate. So much so that I specifically told my wife that if anything ever happens to me, don't cancel my cell phone right away. She may need it for 2-factor verification, or some other identify verification requirement. When I casually mentioned this to my tech-savvy kids, they laughingly congratulated me for finally figuring that out.

I appreciate your insights! Your Mastercard story reminds me of when 3 bills got lost by the post office--when the credit card company called to tell me I hadn't paid, my first reaction was, "Of course I did!". But when I dug further, I figured out that those 3 consecutive checks didn't clear. What a mess, having to put stop payments on the old checks and send new ones.

I'm still getting used to the new phone--today, DS17 and I were unable to hook up the phone to my van (so I can use the phone hands-free while driving). We're still trying to figure that out. When DD20 and I got the online banking stuff worked out, it showed that I had way more money than I knew I did. It turns out, it listed my accounts, DH's accounts (he has a separate one to pay his gym membership), DD20's, and DS17's. The last 2, probably because they were minors when their accounts were established, so my name is on them. So, now I can see their balances, as well. Silly me, I'd just been letting them handle their own money, because their adults (well, 5 months to go on the youngest).

 

[wabbott]

I predict your money stress factor will decline significantly the more you become comfortable with online banking. It did with me - several years before I retired, I knew I would have to watch the funds a bit closer, as there no longer would be a paycheck coming in. I set up spreadsheets for forecasts and started using Microsoft Money (which has since gone the way of the DoDo Bird). It all has served us well in our retirement.

 

[sk!mom]

I predict your money stress factor will decline significantly the more you become comfortable with online banking. It did with me - several years before I retired, I knew I would have to watch the funds a bit closer, as there no longer would be a paycheck coming in. I set up spreadsheets for forecasts and started using Microsoft Money (which has since gone the way of the DoDo Bird). It all has served us well in our retirement.

Completely agree. OP, I think part of your anxiety is just not knowing. I think that you will find that once you’re taking a look at your accounts regularly, making sure that funds are deposited as expected, and generally “keeping up” your anxiety will lessen.

 

[QueenIsabella]

Thanks, guys! I know I need to address this issue--and my anxiety--head on. You've all been so helpful. My family has, too--even if the kids roll their eyes a bit, they're right there to show me what works for them.

 

[Gr8t Fan]

Thanks, guys! I know I need to address this issue--and my anxiety--head on. You've all been so helpful. My family has, too--even if the kids roll their eyes a bit, they're right there to show me what works for them.

When they roll their eyes, remind them that you're the one who taught them how to eat with a fork .

 

[QueenIsabella]

When they roll their eyes, remind them that you're the one who taught them how to eat with a fork .

Actually, I like to say, "I used to feed you with milk from my breasts!" That shuts them right down! I don't use that one real often, or in front of friends or anything, BTW--it sounds creepy, even to me, and I'm a fan of breastfeeding. When I look at my grown, all-taller-than-me children, it just seems...weird.

 

[iwannabdduck]

Thanks, guys! I know I need to address this issue--and my anxiety--head on. You've all been so helpful. My family has, too--even if the kids roll their eyes a bit, they're right there to show me what works for them.

I've learned that when I truly listen to what my adult "kids" are trying to tell me, they are usually right ... 100% of the time. One of them educated me on using "virtual" credit card numbers (re: Capital One Visa Credit Card) when using my credit card for online purchases, such as Amazon, etc. to protect myself from potential credit card fraud. I didn't even know such a thing existed. I do now, thanks to the great job my wife did raising our boys.