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jebjebitz

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  1. Frequent trading policies; Best Fund Family?

    I just finished reading Bogle’s “Common Sense on Mutual Funds”. I highly recommend reading this before pursuing this strategy.
  2. Wow Look At This Chart

    The rise in college costs is absolutely ridiculous. How is this justified? The education students receive today can’t be that much better/different than it was ten years ago.
  3. choosing a 403b plan

    How does the front load work? Do they only take 5.75% from your first contribution?
  4. choosing a 403b plan

    These are some numbers on fees according to MorningStar. If you know your allocation you can get a better idea of the weighted expense average. Capital Income Builder A - Initial Sales Fee: 5.75% Expense Ratio: .59% Management Fee: .23% 12 b-1 Fee: .25% Fundamental Investors A - Initial Sales Fee: 5.75% Expense Ratio: .60% Management Fee: .24% 12 b-1 Fee: .25% Income Fund of America - Initial Sales Fee: 5.75% Expense Ratio: .56% Management Fee: .22% 12 b-1 Fee: .25% Money Market Expense Ratio: .37% Management Fee: .27% Growth Fund of America - Initial Sales Fee: 5.75% Expense Ratio: .64% Management Fee: .27% 12 b-1 Fee: .24%
  5. choosing a 403b plan

    The Lincoln PDP offers Vanguard Target Retirement funds if it is available for your district. I was in Lincoln's PDP but transferred to Security Benefit's NEA DirectInvest. I'm invested in the three funds that Krow listed in bold. The transfer process was frustrating but now that I'm in DirectInvest I am very happy with the service. The website is great, easy to use and I can update account holdings, re-balance etc. The Lincoln PDP doesn't give you the same access to your account that DirectInvest does. You can view statements but you can't update your investments or re-balance without speaking with a representative. This wouldn't be a problem if you were in a Target Retirement Fund though.
  6. 403b Vendors Recommandation

    You will not need a representative from Lincoln if they offer the Participant Directed Platform. Just keep this in mind when meeting with the rep. The PDP is done completely on your own. Anything he/she wants to sign you up for should be examined carefully. Best of luck!
  7. 403b Vendors Recommandation

    Here in NJ, Lincoln Investments offers a Participant Directed Platform that offers a large selection of Vanguard Admiral Funds. You can check to see if they offer that in Illinois.
  8. Q1 YTD Return

    Do you guys rebalance? If so, how often?
  9. A financial milestone to celebrate!

    Congrats! I’ve learned a lot by reading through your posts on here, thank you.
  10. Krow, Great advice, thank you. Using this formula, I was able to go back into an old AXA statement and figure out my weighted average fee for the portfolio I was in. I was able to find out the fees associated with each fund by searching for it on Morningstar. Morningstar showed the expense ratio, management fee, administrative fee and 12b-1 fee. I had six funds in my portfolio and the weighted average fee was 1.91%. This does not include any other fees I might have been paying within the AXA Equivest Contract and this was always a mystery to me anyway. I also did this for my Vanguard Portfolio and the weighted average fee for my asset allocation came to about .11%. I was able to use these numbers to see the difference between both funds and the effect fees would have on my investments. It's a very powerful and eye opening visual and I'm very happy you were able to help me with this information. Thank you. I was actually doing some research to try to figure out the thinking/strategy involved in picking portfolios by these insurance companies. Like you said, "..it usually doesn't make as much sense as the 3 fund portfolio." But, I think teachers just assume that the insurance salesman must know what he's doing and can't imagine that they'd be able to do a better job. I think if some teachers could see the effect that funds have on their accounts the way I was able to they would be motivated to do some research on the 3 fund portfolio.
  11. The Vanguard Tool is very helpful. I like how you can see side by side how fees impact your investment. I was wondering if there is a way to compare insurance company funds with Vanguard funds or funds with lower fees. You can't really search the AXA funds in this tool and it would be interesting to see what I was invested in compared to what I'm invested in now. I was also wondering if there is a way to find similar funds online. For example, if I took my old AXA statement and wanted to invest in a portfolio exactly like the one they put me in within the annuity, is there a way to find funds similar to that and build an identical portfolio with less fees. I feel like this would help teachers who are hesitant to invest in the three fund portfolio. Maybe there is a way to put them in something identical to what they're in now but at half the cost they're paying in fees.
  12. Three great responses thank you! So there's a lot to break down. First Ed: This is a great explanation, clear and to the point. If I had the ability to explain it like this when asked about my strategy I would. Unfortunately I tend to fumble through my explanation and start to miss key points such as keeping fees low and holding on for the long term. It was a conversation I had with a life-long friend that actually inspired me to start this thread. I asked him about his 403b and he told me he didn't know much about it other than he was invested with VALIC. I warned him about high fees and insurance companies, told him about how I switched my investments to total market index funds and he said he would ask a friend of his who's a financial planner about what I was doing. His friend told him that I was right about the fees but should be careful because index funds are not actively managed. I wanted to offer the "data and explanation" to disprove this but his mind was already made up that I was doing something "risky" that I had learned about on the internet. After all he had spoken to an "adviser". I think like you, with this good friend, I should feel a little more comfortable telling him why this is a good idea but would definitely support it with data. This is great information. Steve, I'm not sure how my pension works here in NJ. The only information I have on it is that it has not been funded for decades. Starting in the 90s, one of the Governors started borrowing from it and since then, there has been a pattern of borrowing and not paying back or funding it properly. I would like to do some research to make sure that it is invested the way you are describing above. If so, this is a great argument for why a teacher should reconsider how they have invested in their 403b. This was the thought they originally caused me to send emails to my co-workers. I was upset that I was taken advantage of and I felt that everyone should know about what they had signed up for and the alternatives. Reading through these threads, it's really interesting to see that this is nothing new. It's also frustrating to see that little has changed to protect teachers. I think this is in line with how I think about offering advice. Once you let people know that there are better options available it's up to them to do the research and choose something that they are comfortable with. I can take a teacher by the hand and get them to transfer all of their retirement savings from an AXA Equitable contract to a three fund portfolio with Vanguard Index Funds but would they be able to handle this mentally. After all, a big part of this strategy is holding on to your investments without flinching through the good and the very bad. Would they be able to withstand a crash knowing in the back of their mind that it was an art teacher, with no prior experience in finance, that convinced them to sign up for this portfolio that is now tanking with the rest of the market? Would they question the move and blame me when things went bad? I am comfortable with this plan because I have read and continue to read information about this strategy. I understand, based on what I have read, that the best strategy is too assess your risk level, develop a portfolio and stick with it through thick and thin. I also understand that as I get closer to retirement it is up to me to reassess my allocation and think about moving some investments to bonds. If people are not willing to read about this on their own, they would not have the resources necessary to see this plan through.
  13. I completely buy into the concept of investing in index funds. In fact, as I read through articles like Ed’s Investing 101, it makes sense to me and I would point to something like this when explaining why I moved my investments out of AXA and into NEA DirectInvest. The problem is, and it has been mentioned on here countless times, that teachers are hesitant/reluctant to follow up with this information and improve their investment strategy. My questions are: 1. Is moving funds out of an insurance company and into a self-Directed plan with low cost index funds always better? I “buy into” this idea. I’m hesitant to use that term because I’m sure there are several people on here that can provide countless links to articles proving that low fee index funds outperform 99.9% of funds over a 30 year period but, the majority of people I talk to don’t want to read about this. They are convinced they won’t understand it and are therefore relying on my word, an Elementary art teacher. 2. Should we confidently back such a move to a colleague if they came to us for advice? Anyone who has come to me after I’ve talked about 403b plans has asked me directly, “what do you think I should do?”. I usually answer this carefully and say something like, “ I’ll tell you what I did but I don’t feel comfortable making that decision for you.” This comes off like I’m uncertain and people freeze up when they realize they would have to make an investment decision on their own. in some cases, colleagues have taken advice to leave AXA and have transferred into something equally bad or worse (MetLife has gotten a number of teachers to transfer into their Lifetime Benefit Withdrawal annuity as they look for a way out of AXA.) I understand that a move may not be suitable for someone who’s five years from retirement but, if someone came to you for advice, how confident would you be in guiding them towards low cost index funds?
  14. Lincoln Investments Participant Direct

    The custodial fee for Lincoln’s PDP was $60 when I transferred out of it 2 months ago. It’s possible they changed it back to $35 if that’s what your paperwork says. No one in my district was in the PDP but there’s no way to really know about it unless you visit this forum or the bogle head forum. I learned about it from Krow.
  15. Lincoln Investments Participant Direct

    Alex, I transferred funds from AXA to Lincoln’s PDP. I am a NJ teacher as well. Lincoln has a small group of individuals who deal exclusively with the PDP customers. They were incredibly helpful and were available for contact through email throughout the transfer process. This is important because if you read through some of these posts you’ll realize how frustrating the transfer process can be. I was emailing one rep and he was able to walk me through the process and help locate paperwork as it traveled from AXA to third party to Lincoln. I paid a surrender fee to AXA of 2%. It was lower because I had my account with them for 10 years. Looking back I would’ve paid 6% to get my money transferred if I had to. Metlife will probably try to talk you into delaying this transfer or keeping a portion of your funds with them etc. I was very pleased with the support I received from Lincoln. i’ll send You a message with the number I called to start the process
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