Is $300,000 enough for a financial advisor?
By Seth Deal, CPA/PFS ·
Yes, if you hire a planner who charges a flat fee. A one-time or yearly planning fee isn’t tied to your balance, so $300,000 is plenty. Where the balance matters is investment management priced as a percentage, since some firms have account minimums and a smaller account pays a larger share of its value in fees over time.
Why the pension changes the question
If you’re a Washington public employee, your savings balance isn’t the whole picture. Your DRS pension pays you every month for life, and for a lot of people it covers more of their retirement than their savings do.
So the size of the decisions in front of you doesn’t depend on the $300,000. Your survivor option is permanent once retirement begins, according to DRS. PEBB gives you 60 days after your employer coverage ends to enroll in or defer retiree coverage, or you lose the right to it. Those choices are just as big with $300,000 saved as with $3 million.
What usually makes sense at $300,000
A one-time plan is often the right fit. You get every major decision worked out in order, then carry out the plan yourself, usually with simple, low-cost investments.
Hourly advice can work too, if you have one specific question and the rest is already settled.
A percentage fee costs more of your savings at this level. At 1%, $300,000 pays $3,000 a year, every year, for as long as the account is managed. That can still be worth it if you truly don’t want to handle the investing. But it’s worth comparing to a flat fee first.
DRS also has a free benefit estimator in your online account, plus free webinars and a half-day seminar for members within five years of retiring. Those are a good first step at any balance.
How I’d approach it
I’m a CPA and fee-only fiduciary. My One-Time Plan starts at $3,000 and my Ongoing Plan is a flat fee, quoted up front, starting at $6,500 a year. Neither is priced on your balance, and neither requires moving your investments.
If $300,000 is most of your savings, I’d usually start with a One-Time Plan. Wealth Management, priced as a percentage of the assets I manage, tends to make more sense once there’s more to manage. The planning fee is waived at $500,000 or more under management.
The first step is a free 45-minute Retirement Clarity Assessment on Zoom. You’ll find out whether paying for a plan makes sense for you before you spend anything.