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  2. Agree! keep up the great work.
  3. Yesterday
  4. A great story! GO 403BWISE!
  5. The formula for educating teachers... https://403bwise.org/blog/entry/blog-model-403b-education-plan
  6. Last week
  7. This is really helpful, thanks so much!!
  8. The staffer mentioned "pension issues." So, make sure you and the staffer are on the same page--defined contribution plan (403b) and not the defined benefit plan (pension).
  9. Hi, roughly a month ago I contacted my CT legislators urging them to join the SEC, New York and Delaware investigating the predatory 403b market/practices in our state. I've been asked to call a staffer dealing with pension issues at my Senators office to discuss more. I'd like to keep it simple so, what are the 3 points I might make for them to hop on the investigative bandwagon, my ultimate goal?
  10. Another reminder to people concerned about having "too much" taxable income in retirement... That is likely a very good indicator that you worked much longer than you needed to! Retiring early is always something to consider.
  11. So your current 401k charges 0.50% plus whatever the expense ratios on the funds are. That's a lot and you're right, the three 403b vendors you listed would have lower fees. If I were in your shoes, I'd be generally advocating for lower fees. Moving to a Vanguard 403b is certainly one possible way to get there, but so is moving to a low cost 401k (presumably Vanguard offers that too). I wouldn't limit my focus to one of the many solutions to the overall objective. Don't confuse complexity with effectiveness. All you really need are three funds: Total Market Index Fund for domestic stock. Total International Market Index Fund for international stock. Total Bond Fund for bonds. For those that don't want to manage 3 funds you could throw in all-in-one funds too (they contain those individual funds under the hood): A fixed asset allocation fund like Vanguard's LifeStrategy funds. A target date fund that gets more conservative as you approach the target date like Vanguard's Target Retirement funds. So 29 funds is actually a lot more than you need (provided those 29 funds include the things I mentioned above). The number one thing I'd concern myself with is what tax deferred (401k, 403b, 457b, etc) plans will allow you to build a fully diversified portfolio at rock bottom costs. The number two thing I'd concern myself with is that it would be nice to have a 457b in addition to a 401k/403b because (and fact check me on this) the 19.5k limit is shared between 401k and 403b contributions but the 19.5k limit on 457b plans is in addition to the 401k/403b limit. So I'd be trying to maximize the amount of tax free space my employer provides me. The number three thing I'd concern myself with is the various differences between each type of account. For example the 457b has slightly different withdraw rules than the 403b does. However, this concern would be a distant 3rd.
  12. Hi, I'm not a teacher but an employee at a 501(c)(3) nonprofit. Despite our nonprofit status, we use a 401k retirement plan that charges .25% for advisor fees and .25% for admin expenses. I've been thinking about asking if we can switch to a 403(b) plan, but I'm not sure if there's something I'll lose out on if we move away from the 401k. It seems to me that any of the recommended vendors (Aspire, Fidelity, Vanguard) would all have lower fees. In addition, our 401k plan only allows investing into 29 different funds (bond, equity, money mkt), 22 of which are Vanguard funds. Are there other things I should be thinking about besides fees in deciding whether to advocate for a 403(b)? Thanks so much!
  13. I am in my 8th year of teaching but I have 13 years in the GA system. I need tax breaks by contributing some pre-tax $ to a 457 or 403 and my choices do not appear to be good. I've already fully funded my own IRA/Roth for the year but will need further tax breaks for this year (and need to invest more!). I am not eligible for the HSA (I have an HMO plan with a deductible that is $50 over the minimum to have one- grrrrr) I have tried to avoid these plans until now. Teaching is a second career and I'm late to the game but I do not like what my system has to offer. Which one would be the least costly? What are my options for low cost pre-tax investing without getting ripped off? Any advice is greatly appreciated! 403B 457B Approved Vendor List effective 010120.doc.pdf
  14. I'm sure Skelly has done the math for their situation. As a reminder to others though, if you retire in your late 50's-60ish you could still have over a decade before starting Social Security benefits. This is a great time to spend down an inflated deferred 401k/403b plan and do Roth IRA conversions while you are in a lower tax bracket.
  15. OK, it sounds like you've done the math. Pensions + social security + large deferred-contribution accounts can add up to a high tax bracket in retirement after age 72.
  16. krow36, Thank you for your response, I appreciate it! We are considering going Roth to offset our taxable income in retirement from my traditional 401k. I do like Fidelity better, however.
  17. Earlier
  18. Pushing Up the Next Gen Personal Finance (NGPF) announcement. Two Financial Literacy Workshops for Teachers 1. As previously announced above: Middle and Senior high school teachers only for the (NGPF) FinCamp all-day paid sub and breakfast and lunch on Wednesday, March 25, 2020, in Glendale, CA. AND! 2. April 25, 2020, United Teachers Los Angeles (UTLA) headquarters: half-day Saturday workshop. Announcing an additional financial literacy workshop for all grade level teachers and all LAUSD employees including support staff, spouses or loved ones. Preregistration is required: https://www.utla.net/contact/2020_apr_25_financial_literacy_1 See attached flyer for details. Phone contact and name: Claudia Padilla UTLA Conference Admin. 213-487-5560 4-25-2020 Investment flyer.docx
  19. Skelly, welcome to the forum. I'm glad to see that you are making use of 403bcompare, a great resource! I don’t think you are missing any of Empower’s fees. It’s the administrator and record keeper for the San Diego Consortium and charges 0.16% as you mention. It’s unfortunate that there’s no low-cost index bond fund. The Fidelity 500 Index, Small cap Index and International Stock Index are very good funds. Can you put your bond funds in another account? If your TPA didn’t restrict your Roth 403b choice to Empower, Fidelity would be my first choice—lower cost and better selection. And they support a Roth 403b option. Are you sure you want Roth rather than traditional 403b contributions?
  20. Hello, My wife is a teacher for Vista Unified in the San Diego, CA area, and we have been looking into starting a 403(b) for her. We have been told by our Plan Admin (SchoolsFirst) that if we want to do a Roth 403(b), we need to use Empower. According to 403(b) Compare, the Admin Fee is .16%, and they offer both Fidelity and Vanguard funds. Does anyone have experience with Empower? We are afraid that we are missing some costs. Their fee seems to compare favorably with CalSRTS Pension2, which is .25% (of course, we would have to go traditional to use CalSRTS.) Thanks!
  21. The FA's response confuses me because there is currently no fiduciary standard as a law. Fiduciary is just an adjective that means only about as much as you trust that individual. Without the fiduciary standard, which has been dropped by the current administration, it's basically the same as saying I'm a "good" or "fair" advisor. It sounds nice but doesn't mean a whole lot. If you have absolutely no interest in personal finance, then it might be worth it to find a good AUM advisor to keep an eye on it for you. I think Vanguard's Personal Advisory Service for .30% is about as much as anyone should pay unless their situation is extremely complicated. Or better yet, read a few books, listen to a few podcasts, etc. and you'll learn more than enough in no time.
  22. Tom Were you looking for an hourly fee-only advisor, or looking for somebody else? If you are looking for yourself, I wonder what you think about what Ed said. I agree with him 100% regarding the investment process and the psychology behind staying the course. But I think is fine to pay for an adviser as long as the client learns enough after a couple of years, and then do it yourself. It makes little sense to have a target-date fund or a balanced fund and have an adviser! I have paid the hourly fee to a financial advisor just to see if my diversified portfolio was on track years ago when I did not know what a diversified portfolio looked like. Nowadays, there is no excuse as hundreds of blogs and financial websites exist today that offer portfolio models. I still pay for help with my taxes and an attorney to set up my trust. But I have also discovered, with my head-scratching, is why so many smart people who have read up on investing and still don't get it (and they are not lazy).
  23. The Trump administration killed the Obama-era fiduciary rule. I won't comment on the effects surrounding the buzz/speculation related to the fiduciary standard. However, for anybody reading this thread I wanted to make a clear point: Either you're paying an ethical advisor on the front end or you're getting a "free" advisor who is selling you conflicted/expensive investments. In both cases it is very much against your interest to hire the advisor because of three things: You're working with small margins because the stock market is a get rich slow scheme; you're not pulling in huge amounts of money in any given year. It costs a lot of money to pay for a "professional's" salary. The professionals cannot beat the total market index funds so they're not bringing anything to the table. You're paying for nothing. You don't need the advisor because: You're clearly smart enough and capable enough to buy 3 total market index funds (bonds, us stocks, and international stocks) and keep them in proportion to each other over the years. Even if you're lazy and don't want to spend the 2 hours a year to keep them in proportion to each other, you can spend an extra 0.10%, buy an all-in-one fund like a target date fund, and literally do nothing (this is your "advisor"). You already know that you should be trying to max out your tax advantaged accounts (IRA, 401k, 403b, etc.) Folks at sites like this one or bogleheads or any number of others will give you free, unconflicted advice! ...the advisor isn't giving you anything, his job should go the way of the travel agent.
  24. Hi Tom, I have a little more to say. Not sure if I answered your question because it is a systemic problem within the financial advice industry and the Garrett Planning Network and the National Association of Personal Financial Advisors. I cannot overemphasize that you brought up a touchy but needed topic. How can genuine fiduciary advisors earn a living for all they do? My discussion with an adviser who rejected the hourly pay model and had the audacity to say to me that "it doesn't work" which directly conflicted with the Garrett Planning Network's requirement that their advisers must provide hourly service, is puzzling to me too. Unless these advisers are reported, nothing more can be done. To be fair, people do not like writing checks either and end up "watching the clock" or go to another adviser who offers advice for "free." It is a complex problem with one possible solution for now. How about this business model, financial advisers? Forget the hour fee model because the vast majority of advisers need the AUM too and clients hate writing checks because they are so diluting thinking that they are getting this service for free! (Many surveys support this mistaken notion!). How about fiduciary financial advisors charging 2.0 or even 3.0% AUM for the first couple of years to cover the initial costs of looking at their client's total financial picture? Financial advisers do a lot because the days of creating a complex portfolio are over. It only takes a few minutes to construct a low-cost fully diversified portfolio. But advisers do other things too: estate planning, tax harvesting and planning, life insurance needs, cash flow especially those of us in retirement, but most importantly they serve as financial coaches and keep clients from panicking when the markets get crazy. Then after a year or two of that 2.0% or more AUM to cover the start-up costs (because people hate writing checks), FA can lower their AUM to under 1.0% because there is less work to do. I also refer to Scott Dauenhauer's book for professional advisers on how to make a living serving the public k12 market. The Wild West: Providing Fiduciary Advice to Public School Employees. He has several additional ideas of making money: https://www.amazon.com/Wild-West-Providing-Fiduciary-Employees/dp/B01F96WA2A/ref=sr_1_1?keywords=scott+dauenhauer&qid=1582117331&s=books&sr=1-1 That financial adviser you talked to will probably never read Scott's book or change his or her business model. We all wonder, I wonder, what is the average AUM for genuine fiduciary advisers who serve the K12 market?
  25. Hi Tom, Yeah, a couple of friends had the same response. They don't charge an hourly fee. Calling attention to the "fee-only," just a ruse that says they don't sell conflicted products. We all know that insurance agents or brokers are not bound by any fiduciary guidelines. And we all know that there is NO fiduciary regulations with annuities in 403(B) plans with public k12 school district 403(b). NONE because the vast majority selling these rip off products are insurance agents. The Certified Financial Planner (CFP) is trained to manage a portfolio and are the most likely to be a genuine fiduciary. Sure, they don't sell commissioned products but they found out they can make more money from the AUM than a one-time commission. Garrett Planning Networks will remove any adviser on their network who declines to service a client who just wants to pay by the hour. I have written a story about one such person and the Garrett Planning Networks was very upset and eventually removed that financial adviser. Read my write up here: https://latebloomerwealth.com/did-garrett-planning-network-pass-the-smell-test/ I am not happy with this development in recent years. Like you, I thought that the hour fee would solve all of the high-cost problems and conflicts of interest in one fell swoop. For the most part, it did solve the conflicts of interest part of the problem with selling commission-based products, but the AUM is WAY too high and merely replaced those hideous commissions. I can understand a .25% or .50% but 1.0% AUM or more is a big problem! That's way too much money. We all know how just 1.0% drains our portfolio over time. My plumber, my tax man or my prenup and estate planning attorney never charge an ongoing fee forever. They charge a flat fee and that's the end of it. Why can't financial advisers do the same? Because people are so intimated by the financial markets and financial planners, most people have little choice but pay the 1.0% or more AUM.
  26. There are two 403bwise podcasts on “What a Fiduciary Advisor can do for Teachers” that cover CFP compensation (#86 and #87): http://teachandretirerich.libsyn.com/page/1/size/25
  27. I asked a local "financial advisor" if they new any fee only (hourly) financial advisors in my community. There response confused me. "No, to my knowledge, I do not know anyone operating like that. Very recently, FINRA and the Department of Labor have really cracked down on advisors not operating according to a Fiduciary standard, thus, I would imagine, anyone who would have been charging like that has had to change their structure. It is difficult to be a fiduciary and offer one off advice. Locally, I have never known of anyone to. In the current regulatory environment, it would be difficult for a licensed individual to do. I thought the fiduciary standard was driving advisors away from commission based structure and to more transparent fee based model. Is this not the case?
  28. I agree with whyme that a single target date fund with an ER of 0.10% is a very good option. Sorry that the link to the fee schedule didn't work. It's fixed now.
  29. Amen to Krow36's comments. The performance difference over time of the total market vs. the SP 500 is not significant. If you really feel you are missing something, you could add a dollop of the Vanguard midcap fund, which will add a bit of diversification (but probably won't make a big difference in your ultimate result). Avoid the higher fee T Rowe Price small cap, I'm surprised Minnesota put that in there instead of Vanguard's small cap fund. The individual Vanguard funds will give you the most control and rock-bottom cost, but it appears those target date funds have a very reasonable expense ratio of about .10%, so if the set-and-forget simplicity of the Target Date fund appeals to you, I think that would be a fine option as well.
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