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AndyH

16 Year Teacher - Starting more aggressive retirement

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Ed, I was just taking the top recommendations from this thread and looking at them to see what the best option is.  To me, it seems Security Benefit is the best option and can't see myself why I wouldn't go that route.   I didn't realize that Admiral Shares were available with DirectInvest.  I thought that was a competetive advantage that Aspire had.... but it appears I was mistaken.

For now, I think Security Benefit Direct Invest will be the direction I go with the 403b, but I'd also like to setup a 457,  which I don't believe is available in DirectInvest.   

 

While I understand this is a 403b website, curious if there are any top 457 opinions, or a site like this specifically for 457s.

 

Thanks


Andy

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It looks like Aspire is probably your best 457b vendor with PlanMember Direct coming in 2nd place. If you could get Fidelity added then they'd be the clear winner.

...you'll have to fact check me though because I haven't studied all of your plans. Think of my opinions as a great starting point.

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On 8/7/2018 at 10:39 AM, AndyH said:

For now, I think Security Benefit Direct Invest will be the direction I go with the 403b, but I'd also like to setup a 457,  which I don't believe is available in DirectInvest.   

While I understand this is a 403b website, curious if there are any top 457 opinions, or a site like this specifically for 457s.

Thanks

Andy

AndyH, I was out of the country with very limited access to the internet this last summer and was unable to post on your thread. I’m a retired WA teacher and so your thread is especially interesting to me.

For other readers, here’s a link to the website for WA State 457 fee table that you posted:  https://www.drs.wa.gov/dcp/investments.htm

An Administration fee of 0.1283% is added to the fund’s “Investment fee” (expense ratio or ER). The total fee for one of the Target Retirement funds (they call them “Retirement Strategy funds”) would be the fund’s ER of 0.15 to 0.17%, plus the Admin fee of 0.1283%, or about 0.29% total.

The fees on $10,000 of the 2035 Retirement Strategy fund would be $29.44/yr. The annual fees on the WA State Bond fund and the US Large-cap Equity fund would be much less, only $13.69 and $13.13 respectively. Their ERs are 0.0%!

You can compare the WA 457 fees on $10,000 with those of the Security Benefit NEA Direct Invest 403b, which are very low. Its Vanguard Total Stock Market fund has an ER of 0.05% and the admin fee is $35/yr for balances less than $50,000. So (0.0005)(10,000) = $5. Add in the $35 admin fee that will apply for at least several years, and that’s $40/yr.

A 403b account with Vanguard (through Newport Group with whom they outsource their 403b) would cost a $10,000 balance the $5 ER plus an admin fee of $60, for a total of $65. (Which is still a bargain!)

I’m trying to convince you that the WA State 457 is a very low-cost plan.  I suggest you consider your and your wife’s accounts together. The WA State Bond fund is a very low-cost bond fund that is 100% high grade corporate bonds, while SB NEA Direct Invest’s Vanguard Intermediate-term Bond Index fund is about 47% Treasury bonds and 53% corporate bonds. I prefer the VG fund, but using some combination of the 2 funds might be worth considering. Or you can just use one of the Retirement Strategy funds in the 457 and call it good.

Your plan to contribute to both a tax-deferred 403b and 457 as well as a Roth IRA is a good one in my opinion. Staying below $77,200 in taxable income tax bracket is also a great idea. Especially if you have a taxable account where long-term cap gains and qualified dividends on stock funds are taxed at 0%.

The folks here at 403bwise are knowable about 457 plans as well as 403b plans. In fact there's a forum platform for each but we all participate in both platforms. 

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