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krow36

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About krow36

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  1. 2017 Return, costs and asset allocation

    Our asset allocation is 40% equities, 60% bonds and has been for the last 10 years. Prior to that it was 50/50 since we retired. We've been retired 25 years. Vanguard portfolio as of 31 Dec 2017: 1 yr, 11.2% 3 yrs, 6.1% 5 yrs, 8.0% 10 yrs, 7.2% Vanguard (92% of investments) average ER is 0.14% as per Portfolio Watch. TIAA (8%)
  2. TIAA Traditional

    Vanguard's Total Bond Market and Intermediate-term Bond Index funds did not loose much during the 2008-2009 downturn. I can see preferring TIAA Traditional because of it's higher guaranteed 3% return compared to the bond funds present return. Maybe concern for rising inflation that results in rising interest rates would be a better reason to use TIAA Traditional? Is the rate actually 3% on your district's TIAA plan?
  3. 457B State Plans for K-12 employees

    Added the Oklahoma State Teachers Retirement 403b plan. It's run by VOYA, but there is no 457 plan. The lowest ER looks like 0.62%? https://otrs.beready2retire.com/investments/investment-options/666277 https://otrs.beready2retire.com/investments/investment-performance/666277
  4. Who Decides 457 Vendors?

    You are right—that law doesn’t seem to address the question of who determines the providers on the employer’s 403b list, the district or the TPA. I guess your quote from the NYT article explains it—the district may delegate the job to the TPA. Scott Dauenhauer, CFP, (ScottyD on this forum) in his book Wild West, Providing Fiduciary Advice to Public School Employees explains the many conflicts of interest that TPAs can have. Regardless, you have to work with both the TPA office and the HR office. If you continue to talk (nice) to them, I think they will realize that your quest to add a CalSTRS Pension2 457 option is very reasonable. Neither office wants to be accused of having a conflict of interest. There may be a procedure to add a provider, and in some districts it involves the union. Shine some daylight on what’s going on! Yes, it’s pathetic that a teacher has to be the one to work this out—as if you didn’t have enough to keep you busy already?? (I’m a retired teacher.)
  5. What are the expense ratios of your funds? Most of the SB funds have an ER of about 1%, which is added to the “custodial account fee” of 1.00%. Fees of around 2% certainly going to cause your portfolio to underperform a 3 fund index portfolio over time. If you have $150,000 under Option 1, there are breakpoints that reduce the load to 3.75% on your new contributions. If your funds average ER is ~1%, the drag from annual fees would be 1.35%, plus the front-end load of 3.75%. Again, it’s likely to underperform a 3 fund index portfolio over time. If you’d like to see the effect of costs over time, I suggest you check out Vanguard’s compare fund cost tool. You can select a fund from Vanguard and one from another provider. After the calculation, scroll down and change the inputs and recalculate. The tool calculates the costs with inputs of a given amount of investment, an assumed rate of return, over a given time. Notice that it calculates the percent of outperformance needed by the higher fee fund in order to equal the rate of return of the lower fee fund. https://personal.vanguard.com/us/FundsCostCompare There’s little doubt that you would be better off in the NEA Direct Invest plan than in either option 1 or 3!
  6. Who Decides 457 Vendors?

    Of course you are correct that the school district has the responsibility for their list of 403b and 457 vendors. Starting at 403bcompare.com, I found the CA law that applies to this: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=EDC&division=1.&title=1.&part=13.&chapter=39.&article= If I were you, I would go back to the HR office and explain that the TPA told you that the lists are the responsibility of the district. If you talk nice, and maybe ask to see a supervisor, you’ll make headway. Once HR admits that they control the lists, you can find out if there’s a procedure for adding a vendor. Because you want to add the CalSTRS Pension2 to the 457 list, it should be easy because it’s run by the state teachers pension organization, and it’s already on the 403b list! Of course it’s possible that someone has a conflict of interest in keeping PlanMember the only 457 vendor?? Hopefully not. Even if that is the case, if you are persistent, you should be able to get Pension2 457 added. It’s probably more likely that the HR person you spoke to is just misinformed. If you post your request on the 403b board, you’ll get more comments. This sort of thing happens with the 403b vendor lists frequently. Folks (including me!?) forget to check the 457 board because there’s not much activity on it.
  7. Need help choosing 403b Vendor

    Others may disagree, but I think you should consider saving for retirement in a taxable account at Vanguard. As a young single teacher you are probably not earning enough yet to be in a high income tax bracket, which reduces some of the 403b tax-deferral benefit. You can automate a transfer from your bank account to your Vanguard taxable account. You can buy tax efficient funds such as Total Stock Mkt and Total Int'l Stock Mkt. For bonds you could buy iBonds, use longer-term CDs, or use Total Bond Mkt.
  8. Need help choosing 403b Vendor

    I missed the link to the actual plans available to you. Haste makes waste I guess! Sorry. It looks like you have zero mutual fund based options. That sucks. Ed will be your guide in improving your district's offerings. Good luck!
  9. Need help choosing 403b Vendor

    allegory, welcome to the forum! Have you checked out those vendors on 403bcompare.com? Although it is accurate for CA K-12 districts, 403bcompare is very useful if not completely accurate in other states. I suggest you check out VALIC, which offers 2 mutual fund based 403b plans. https://www.403bcompare.com/vendors/1117#/productlist In both cases, there is a management/wrap fee that is specific to your school district, between 0% and 1%. I think it’s determined by the total of all the investments in this plan in the district. You’ll have to ask the VALIC rep for that number and then add that to the expense ratio of the funds you use. In both options you should avoid the extra fee charged for an advisor. I would use the following funds which have the lowest ERs on the lists. Group Mutual Fund Product, Management/Wrap Fee of 0% to 1% Dreyfus S&P 500 Index, PEOPX, ER 0.50% Vanguard Developed Markets Index Inv, VDVIX, ER 0.17% Dreyfus Bond Market Index Inv, DBMIX, ER 0.40% Profile Retirement Program, $20 to $40 Custodial Fee plus the Management/Wrap Fee of 0% to 1% VALIC Company I Stock Index, VSTIX, ER 0.34% VALIC Company I International Eqs Idx, VCIEX, ER 0.45% VALIC Company II Core Bond, VCCBX, ER 0.77% As an example, if your asset allocation is 60% equities and 40% bonds, with 20% of equities in international, that works out as 48% domestic equities, 12% int’l equities, 40% bonds. If you multiply these percents by the ERs, the sum of the products is the weighted ER of the account. It works out to 0.42% for the Group Mutual Fund Product, and 0.44% for the Profile Retirement Program—not much difference. The non-ER fees will determine which plan is a better choice in your district. I agree with Ed that working to get a low-cost vendor added to your district's 403b list is a great idea! Unfortunately that can take a number of months, so in the meantime, you might consider the above. What state are you in? Many states have a 457 plan that is available to K-12 teacher and has very low fees. A 457 plan can be as good if not better than a 403b plan, depending on fees and the funds available. Edit: Ooops! I see you are in FL. I don't think there is a state-wide 457 plan available to you.
  10. What are my options before I leave job?

    grw, I'm impressed with your determination! It's hard not to think the AXA reps you've talked to want your DW to stay in her expensive annuity, and that's why they have never heard of Retirement 360?? We know that at least the AXA Retirement 360 is available in K-12 403b plans in CA. We don’t know the size of admin fees. Here’s a 2017 AXA press release on their Retirement 360SM: https://us.axa.com/news/2017/ar360-release.html It’s hard to tell if 360 is the same as 360SM?? I’m guessing it’s the same. This AXA website on the Retirement 360SM looks like it should be a K-12 403b possibility in IL? https://us.axa.com/axa-products/retirement-planning/ar360.html And this one aimed at teachers? https://us.axa.com/teacher-retirement/403b/ I think that you should be able to find out about Retirement 360 for your district from some of the phone numbers in these websites? The last website indicates you can communicate via email also. That admin fee of $0 to $100 per quarter is critical to knowing if 360 is a reasonable option.
  11. TIAA optional SRA...

    Perhaps you should make a request to HR that the state 457 plan be offered to all employees. As you say, you may be the first to ask for it! Maybe you can find other employees to do likewise? I guess if your institution is a private, non-profit, it can only offer a "non-governmental" 457, which have disadvantages. Thanks for explaining your 2% required contribution and the employer's 5% match as being part of your 403b and not a 401a.
  12. What are my options before I leave job?

    I’ve been trying to help reubenhenriques on the BH forum: https://www.bogleheads.org/forum/viewtopic.php?f=1&t=236099 I’ve suggested that the AXA mutual fund based 403b Retirement 360 should be considered if AXA offers it in his district. OP, does AXA offer the Retirement 360 to your district? According to 403bcompare, it's offered in CA and includes some good low-cost funds: iShares Total US Stock Market Idx K, 0.03% Vanguard Total Intl Stock Index Admiral, 0.11% Vanguard Total Bond Market Index Adm, 0.05% VG LifeStrategy Inv, 0.13% to 0.15% Unfortunately it has an admin fee of $0 to $100 per quarter that varies by district. So OP would need to ask the AXA rep about the district’s fee. Has anyone had experience with the AXA Retirement 360 mutual fund based 403b? If so please post!
  13. TIAA optional SRA...

    It's unfortunate that your employer doesn't make a 457 available to all employees. Is your wife's 457 a "governmental" or a "non-governmental" plan? How about your unavailable 457 plan? Good luck on hearing that you are able to participate in the TIAA "voluntary retirement plan" (a 401a?)! Perhaps it is a plan you didn't sign up for at the beginning of your employment and so don't now have access to? Hope not. TIAA is an insurance company and so their terminology is sometimes confusing, at least to me. My wife has a TIAA Supplemental Retirement Account (SRA) and they seldom if ever label it as a 403b plan, but it is a 403b. I think your 403b account is what TIAA calls a SRA.
  14. TIAA optional SRA...

    The "voluntary retirement plan" is certainly worth using because of the 5% employer contribution. I'm not sure what your contribution limit is on this plan, probably a 401a plan. The employer's 5% isn't part of your limit. Here’s a discussion between professionals on 401a and 403b contribution limits. https://www.whitecoatinvestor.com/forums/topic/voluntary-contribution-limits-to-401a-and-403b/ and also https://thefinancebuff.com/retirement-plans-galore-401a-401k-403b-457-sep-simple.html Ask your HR office about that. It probably depends on how your employer’s 401a plan is written? The "Optional Supplemental Retirement Annuity (SRA)", would be a 403b plan with an 18.5k contribution limit. Of course your IRA with it's contribution of up to 5.5k is completely independent of your employer's retirement plans. EDIT: Here's a more complete and recent article by Harry Sit: https://thefinancebuff.com/401a-plan-contribution-limit.html
  15. This NY Times article on index vs actively managed funds is very convincing to me. https://www.nytimes.com/2015/04/05/your-money/measure-for-measure-index-funds-rule.html?action=click&contentCollection=Your Money&module=RelatedCoverage®ion=Marginalia&pgtype=article&_r=0 The SPIVA table for US stocks shows 85-90% of funds did not outperform their index over 10 or 15 years.
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