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  1. Conclusion after a year of 403b/457b reform.

    However anybody feels, Rubio hasn’t been reliable. I too would love to see the TSP available to everybody for every type of account. I’m shocked Rubio wouldn’t consider that to be big government, but I’d support him 100%.
  2. Conclusion after a year of 403b/457b reform.

    It is an interesting thought. I wish I could run a simulation to find the answer. I hypothesize that enough workers would stand up and prevent a good portion of the nonsense we see in K-12, but I'm not overly confident in that hypothesis. At any rate, the awful nature of the 403b/457b world can only exist because of teachers' willingness to accept it. I'm reasonably confident that level of acceptance won't change for a very long time (if at all). Hopefully I'm wrong.
  3. Conclusion after a year of 403b/457b reform.

    Yup and I'm happy for them; they're a counter example to some of what I've personally observed. We ought to tie the lower and upper bounds of salaries to inflation. We don't need to beg for random, one-time 5% increases. That's a solid hypothesis. However, I imagine if I had a pension I'd still be very upset that somebody was basically stealing money from my supplemental account. If I could I'd test this hypothesis with another profession that also has a pension, but I don't think I'll ever know for sure why people have behaved the way they have. Rubio is well known in Florida for talking quite a bit and doing very little unless it we're talking about cutting services for everyday people or using deficit spending to finance corporate tax cuts. Having said that, using the TSP for 403b and 457b plans would be genius. Similarly we could expand the FRS Investment Option (alternative to a pension in Florida) to handle 403b/457b plans too. These ideas would be fantastic. Fair enough. I can only gather so much data in my personal life...not nearly enough to come to a scientifically valid conclusion. However, I must note that the non-technical folks were equally receptive as the technical folks. I'm not ready to specify a reason that this problem exists. Resistance to financial knowledge, unwillingness to take action, etc...who knows for sure? Maybe all of the above. Your hypothesis may be true, but I'm still left wondering why the general public has 401ks that are far less awful. I suspect they engage more strongly. To be clear, the population at large does not invest well. I used to be in that group. However, my anecdotal observations show that teachers invest (or don't invest) far worse than any other group that I have personal experience with. It isn't particularly close either.
  4. Conclusion after a year of 403b/457b reform.

    I would have liked to have known you when you were making enemies 😀. I don’t attack anybody, I typically just state the objective truth that Plan A will consume 75% of real investment returns while Plan Z consumes just 3% and I appeal to the idea that you deserve to keep your money. So I haven’t made enemies, but I’ve found an almost aggressive level of indifference. I’ve previously entertained the hypothesis that teachers’ lack of interest in money (something I’m not willing to concede is actually true) is the reason for apathy. However, I’ve found that the teachers yelling the loudest about how poorly teachers are compensated are also the most apathetic about having their retirement accounts raided by fees. So it seems I’ve observed the opposite correlation being hypothesized. Something that I’ve found generally notable about teachers (at least relative to my profession) is a generally strong willingness to voice grievances and a relative unwillingness to act on that discontent. I also see the union as being fairly disconnected from the teachers. I’m not sure if these observations have anything to do with 403b plans, but it stood out to me nonetheless. I’ll still be around to offer my opinions to individuals seeking help, but any optimism for a collective solution has largely been extinguished.
  5. This problem will not be solved for an exceedingly long time because at the end of the day teachers are amazingly apathetic. I think history has shown that ending victimization is nearly impossible without engagement from those most affected. There have been a few exceptions (particularly teachers who’ve found me through my website), but on the whole teachers just don’t care. Surprisingly, I’ve found that teachers who are the most engaged and have the most to say about the plight of teachers, they’re the least receptive to even listening to how they can improve their personal situation, much less how to address the systemic problem. This experience stands in stark contrast with how my coworkers responded to my declaration that our 401k is a rip off. Several people asked me to give a presentation (which was well attended), others stopped by my office for more personal help, most wound up significantly improving their retirement plans (advisers were fired, IRAs/401ks were reallocated, contributions to annuities ended, etc), and there are now jokes about starting the Church of Bogle. This difference in engagement is why 401ks are vastly superior to 403b/457b. I was warned, but I was still surprised by how difficult it is to get a teacher to care about their own exploítation or the exploítation of their peers.
  6. If you buy and hold then you’re fine. However, I’m not sure what an ETF is giving you in that scenario that a mutual fund wouldn’t also provide. I find ETFs to be slightly annoying because I don’t think you can buy fractional shares.
  7. During the next crash, which we may be in right now for all I know, I’ll be publicly documenting my mental state in the form as my 90+% stock portfolio plummets. Maybe that’ll help future readers gain insight into the emotion of it before experiencing it themselves, because you’re right Tony, this is critical and a lot of people haven’t fully and appropriately considered it.
  8. My mutual funds give me quarterly distributions, not annual. An ETF’s underlying investments are the same as a mutual fund; I wouldn’t expect a difference in volatility. Buying and selling an ETF comes with more complexity because you can essentially day trade it. Bogle is against ETFs for this use case, which is the only way ETFs are substantially different as far as I know. ...as usual, I’m with Bogle.
  9. My personal view, ask yourself what percentage of your portfolio you can financially and emotionally afford to lose, recognize that stocks can quickly lose half their value, and work backwards to determine what percentage of your portfolio needs to be bonds to prevent you from exceeding that loss.
  10. Tiaa fixed annuity

    My advice is simple, run.
  11. People have called me a pessimist my whole life, but when I talk to people 45 and younger and when I look at polling for different age brackets...I see SS, Medicare, etc being expanded, not reduced. In the coming decades I’d bet on an expansion of the social safety net...especially if we watch our grandparents work until death, go hungry, go without proper healthcare, and go homeless or live in awful conditions as the article seems to indicate is happening. For example, SS is insanely easy to save/expand. Step 1, don’t exempt income that is over 112k or whatever it is. Step 2, don’t exempt investment income. Step 3, get rid of its flat tax nature and ask people like me to pay increasingly higher rates. Although anything can happen in the short term, specifically 2018 and possibly until 2020 if the Dems can’t retake a chamber. So we’ll see.
  12. This is a national embarrassment. I don’t know what else to say; I’m ashamed.
  13. Teaching Loved Ones About Money

    I know virtually nothing about Twain, but that made me laugh out loud.
  14. Teaching Loved Ones About Money

    I spent a fair amount of time contemplating how to ‘properly’ teach kids things they may not necessarily want to know. I couldn’t find an answer that was particularly pleasing. I eventually settled on the idea that all you can do is make them aware that you have knowledge that you’re happy to share and then stand back as they ignore you and make mistakes. The notion of watching unforced errors frustrates me. The fact that nobody taught me anything about money was also quite frustrating. More power to you Tony, it sounds like a tricky job!
  15. 403b Annuity Salesman Perspective

    To anybody reading this... It is always in your best interest to be in a self-directed plan (meaning you make the decisions, not a so called "adviser"). Also, target date funds aren't just for people who don't know what they're doing, they're for everybody! Don't walk away with the impression that you're settling for an inferior product by using a target date fund or that investing is complicated. A target date fund is just a fund-of-funds that contains a Total US Market index fund, a Total US Bond Index Fund, a Total International Market index fund, and a Total International Bond Fund. It isn't rocket science, the target date fund automatically does the work necessary to keep the 4 funds in the right proportions to each other (one fund may fall while another rises and therefore they need to be brought back in balance). The target date fund also does the necessary work to automatically increase your bond percentage as you approach the retirement date so your portfolio becomes more safe. Target date funds are for people who know exactly what they're doing but want to pay an extra 0.08% per year so they don't have to do the management work that the target date fund does for you.