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  1. Yesterday
  2. Hey All, We are launching a new feature called "Teacher Stories." We just went live with our first one. Annie is 25 and teaches in San Francisco. You can read her "story" here. Fiduciary advisor Scott Dauenhauer, CFP® has posted his feedback below. If you would like to share your "Teacher Story" click here. We look forward to your comments and participation. - Dan Note: If you are new to the Discussion Board and would like to post a comment, you can register to post at the top right. Scott Dauenhauer, CFP® responds to Annie's "Teacher Story" First, congratulations on saving in a 403(b). Believe it or not, the vast majority of teachers are not currently saving in a retirement account. The rate of teachers under 30 who are savings is even lower. You are building a great money habit. I understand that you work in the San Francisco Unified School District. In checking 403bCompare.com, a website run by the state of California, I see that your school district offers three high-quality vendors: CalSTRS Pension2, Vanguard and Fidelity. One thing you can do to improve your current and future financial circumstances is to upgrade your current 403(b). Unlike an upgrade at a el or an airline, you don’t need any special status, you just need to fill out some paperwork. Companies like the one you currently have your money in charge high fees, which are often hidden. By upgrading to a high quality vendor, your account balance could be 60% larger over your career than if you stay where you. I encourage you to research those three companies. CalSTRS Pension 2 is run by the state of California. It was created to ensure that California teachers have access to at least one low cost vendor. You can learn more about CalSTRS Pension here. You can learn more about Fidelity's 403(b) here. Vanguard's 403(b) is run by the Newport Group and you can learn more here. All three high-quality vendors offer target date or target risk funds that will manage your money for you at a low cost. 403bwise has information on asset allocation and target date funds which you can access here https://403bwise.org/education/investment. If you need financial advice, you should get one from an advisor who is a fee-only fiduciary. Here is some general information on working with an advisor. Here are three resources for finding fee-only Certified Financial Planners XY Planning Network, Garrett Planning Network, and the Fee Only Network. Always get in writing from your advisor that they are a fiduciary 100% of the time and they will always work to put your interest ahead of their own. You can use the 403(b)wise Fiduciary Pledge. I know you have student loans, look into the PSLF program and keep up your payments, but always put something into that 403(b) (even if it’s just $25 per paycheck). You might also consider starting a Roth IRA. Here's is some general information from Nerd Wallet on the Roth IRA. Scott
  3. The annuity people attend and present at administration associations such as the California School Boards Association and California Association of School Administrators. There are ones in every state.
  4. Congrats Karen. We all have similar stories. Thanks for sharing and reminding newbies that you have to stay on top of this because the 403(b) system, the people and the educational institution will not lift a finger. However, as you and MNGopher found out there is one person somewhere in the system that will help.
  5. I'm glad it worked out. It's amazing to me that with all our modern technology, a simple transfer of funds is such a time consuming process.
  6. Teachers who enter into a degreed or certification program to advance to the administrative level in order to obtain a position as a building principal, administrator or school business leader. To be a school business leader you do not have to be an educator so that is a different program. To my knowledge the programs, like teacher education programs, do not include instruction on choosing 403(b) plans.
  7. Finally have the transfer from SB to Vanguard completed. It took a very looong 2 1/2 months with so many phone calls between SB, Vanguard and the Third Party Administrator that at times I thought this day would never come. If it were not for one woman at Newport Group and her allowing me to ask for her directly, I would still be attempting the transfer. It started with the first check out from SB to Newport Group without the LOCKBOX number. Check returned to SB. Second check issued and it had one digit incorrect in the LOCKBOX number. Third check was promised to be sent overnight since it was SB error but when I called sent out in regular mail. SB did a stop payment and 2 days later did overnight the check. SB confirmed it was at New Port bank NEwport did not have a record of it . Only when the Newport Group woman helping followed up with the bank using the total check amount did we find out the check was sent to right lockbox number but did not have my name on it. The bank had to confirm with SB that indeed the money was for my account. It was maddening because I had to wait 10 days after each time the check was issued without a way to determine where the money was or what the problem was or who how to follow up. Thanks to MN Gopher for the heads-up. "If the time between when Newport Group receives your transfer-in paperwork and SB sends them the money is more than one month, Newport may make you resubmit the form." For some reason when the Third party administrator was sending the updated approval letter the fax got interrupted. Newport was telling me they didn't have the updated form, third party administrator was insisting they sent it. Didn't get that figured out till we did a three way call. Moral of the story for anyone trying to get out of an annuity: follow the advise on the message board above, be persistent, keep calling, document each step and try to get someone from the receiving company to help. MN gopher was right when he warned the outgoing company will drag their feet a bit (or more) with the exchange. I have shared my experience with my co-workers. Many did not even know about our 403b options except for what the cafeteria salesman offered. I will continue to spread the word about 403b Wise and options! Thank You!
  8. Last week
  9. MoeMoney

    NYAdmin

    Welcome to the forum, NYAdmin. Just out of curiosity, can you share with us how you came across 403bwise? As an administrator, you have the potential to exert influence over other administrators who evidently do not understand finance like they do education, just like you self-described. Though you will hopefully discover that it is a lot easier to understand than you think. If only administrators could explain the pitfalls of 403b plans to those in charge of choosing the plans, it could do wonders for the balance sheets of themselves, hundreds of teachers and staff members too.
  10. Ed’s answer reminds me that we need to advocate for this gold standard model in the School Business Leader and Administration education programs in addition to the teacher education college programs. Wouldn’t that be marvelous?
  11. Some good info . https://assetbuilder.com/knowledge-center/articles/how-investors-can-win-with-target-retirement-funds
  12. tony

    My vendor list

    I want to emphasize with Aspire you can tap into pretty much any fund you want and won't need a salesperson, so your over all costs will be cheaper. I think Aspire is a doable option and is far from the maddening crowd of annuity products. How do you self-direct? just write it on the application or call them.
  13. Great user name!!! I second that. very appropriate actually
  14. pushing this up. Anne is still looking for people.
  15. Good input and questions, Ed. And thanks for posting 403wtf (an awesome user name, BTW). - Dan
  16. I just wanted to bump this thread because I think I found an error in my initial analysis (see the strikethrough text). I welcome group wisdom to try to get to the bottom of this.
  17. Sorry to hear that. Let me make sure I understand. Your wife worked at District A and contributed to a 403b. She left District A for District B and rolled over the 403b to District B's 403b and now she is contributing new money to District B's 403b. Is that right? Let's start with new contributions made to District B's 403b...I'm 100% sure you're not going to be able to roll that over to an IRA until a qualifying event happens (probably quitting or being fired). The rolled over funds may be a bit more complicated. I'd be willing to bet that it will be treated no differently than the new contributions, but I don't know that for an absolute fact. My current 401k (very different from the 403b world) allows me to roll money into the 401k and then roll it back out whenever I want. I suppose it is conceivable that some 403bs may allow the same thing, but I'm skeptical. You'll have to reach out to the vendor and/or read all of the fine print to know for sure. It's too bad you missed the opportunity to rollover the 403b from District A to an IRA after quitting, that would have been allowable. Finally, do you have a better vendor available in District B? You can roll EVERYTHING over to the better vendor if one is available.
  18. There are actually two companies named Lincoln and one of them offers a Participant Directed Plan (PDP) in limited areas of the country. Search the forms to find out if it's Lincoln Investment that offers the PDP plan (I think it is) and figure out if you have access to it. This thread may be a good starting point, I'll leave the homework up to you. If not, then ASPire is the best option on the list. I documented their plan here. It isn't as good as Vanguard or Fidelity, but it is reasonable enough, definitely worth using. I was able to get Vanguard and Fidelity added to my district's list of approved vendors and I'm happy to help you do it. Somebody recently asked me for general advice on the Bogleheads site and this is what I had to say. Reach out to me if you need help or insight to get the job done. You can do it. The other thing to consider is that some states have state sponsored 457b plans (for example, NY has a pretty good one). It is possible that is the best option. Either way, you're in good shape with ASPire being the "floor" of your options.
  19. Is there a reason you're asking what district is the "gold standard" as opposed to what a "gold standard" would look like? I certainly haven't reviewed every district in the nation, so I can't award a "gold standard". However, I can tell you what I would do if I were given complete control over a district: I'd have exactly one vendor for the 403b and one vendor for the 457b...neither would have agents. That vendor would offered fixed allocation funds (Vanguard LifeStrategy), target date funds, total domestic stock fund, total international stock fund, and a total bond fund. That's it. Every employee would be automatically enrolled, they'd have a "reasonable" percentage of their salary allocated towards it, and they'd be invested in a target date fund based on their age. Every employee would be able to override this automatic enrollment. My Retirement Services department would offer information very similar to what I've posted on my Investing 101 page. That is the gold standard, but I'm not aware of any districts that have implemented it.
  20. EdLaFave

    NYAdmin

    ...also, if you have access to a 457b, then take advantage of that too. You can put 19k in a 403b and another 19k in a 457b.
  21. EdLaFave

    NYAdmin

    I'm not sure how to break the tie between Vanguard and Fidelity. I'll let you decide. Vanguard is documented here. Fidelity is documented here. There may be corner cases where that is sub-optimal, but generally that is the right decision because you have total control over an IRA, whereas a 403b is up to the whims of your employer. I don't understand the question. I assume you're asking what type of account you should move your 200k (from an old employer's 403b) to? I think you've already answered your own question. Vanguard or Fidelity, pick what feels good to you. It is very common to use the word "Roth" as if it fully describes an account. It does not. Tax advantaged accounts (401k, 403b, 457b, IRA, etc.) come in two variants: Roth and Traditional. Please ask questions if you don't understand that. I assume you're asking if half of your 403b contribution can be Traditional and half can be Roth...yes that is allowable. Is it advisable? Well, you haven't provided enough information to say...again ask questions if that's what you're getting at. IRAs have income contribution limits whereas other tax advantaged accounts (401k, 403b, 457b) do not. Some people make too much to directly contribute to a Roth IRA. However, Congress wrote the law in a fairly ridiculous way that allows those folks to contribute to a Roth IRA indirectly through something that has come to be known as a "backdoor Roth contribution". You haven't told us much about you, so I can't answer that really. I think you're going to want to read my Investing 101 page. Your main decision is to decide what percentage of your portfolio should be in bonds. I personally do that by recognizing that stocks can drop by 50% fairly quickly and take many years to recover...then I ask myself how much of my portfolio I can financially and emotionally afford to lose. If you would do something foolish like selling stocks during a crash if you lost 50% of your portfolio then guess what, you can't handle a 100% stock portfolio. If you can only handle losing 25% of your portfolio then you need a 50% stock and 50% bond portfolio. Once you know what stock/bond split is appropriate for you (something only you can answer, by the way). Then picking the funds is easy. If you want to save a little bit of cash in fees then you invest in what's known as the 3 Fund Portfolio...if you don't mind paying a little extra to not have to manage anything at all (3 fund portfolio takes hours per year to manage) then you can go with an all-in-one fund (fixed allocation or target date). In the Vanguard/Fidelity links I gave you, I point out the funds to use. In the Investing 101 link I gave you, I describe all of this in detail. Ask questions. ...all my comments are in regard to your entire portfolio as a whole. Each account does not have to be a stand-alone portfolio if you will. Ask questions. Very generally speaking, it doesn't matter what account type you have, my fund recommendations will be the same. However, bond funds in a taxable account can generate "large" tax bills (especially for somebody in a high tax bracket). I'd also like to put my highest performing assets in the account that is guaranteed to never be taxed (Roth accounts) so I'd avoid putting bonds in those accounts (Roth). So there are exceptions to the rules, but I can't give comprehensive input because you haven't laid out your entire financial situation. It seems like you've really grabbed onto the idea that some funds are "better" in one type of account than others, but as a general rule of thumb (with a few caveats) that isn't how this works. You build a fully diversified portfolio with rock bottom costs (in short that means, you buy total market index funds). Then you buy those funds in the accounts where they're the cheapest and/or most tax efficient. You view your portfolio as the summation of all of those accounts. Yes, you apparently will spend money on your kids college, but it doesn't come from a single fund...it comes from your portfolio as a whole. You may do some mental accounting to imagine it coming from a particular source, but that's essentially a fallacy (one lots and lots of people fall into).
  22. I have my list from the district. Are any of these good options? I have tried to get Vanguard added, but no luck yet. Thanks for any comments.
  23. Asking for my own research for advocacy in my own district... what districts should I look at to see how it's done right?
  24. I have heard from a teacher in a small school district in San Bernadino county that has School's First (I think) for both the 403(b) and the 457(b) plans. He tried to form a committee to oversee the plans but was s down by the Superintendent and no interest among his colleagues. You are probably the only one who cares enough for you and your colleagues best interests that you reported this. The bigger question is who in the district or the union decided to have National Life Group with another 457 plan. LAUSD also has a policy that no 403b agents selling or talking with teachers on school grounds PERIOD! but the agents violate this all the time. A friend of mine called me and reported that they were presenting at district HEADQUARTERS! I was so angry I wrote an email to the board members about this. Where those agents found and disciplined? Of course not. It was I who was chastised in front of the committee by the chair of the committee for going over her head. I WAS CHASTISED while our teachers are still getting a raw deal and agents violated LAUSD policy. (No worries! I am a big boy). You are just getting wind of just how corrupted the entire defined contribution plans are with public k12 school districts with regard to all of the fees that our teachers are paying and they don't even know it. I have been at this for 25 years and I find it totally fascinating that what you are experiencing is still going on. Just think about this, there are thousands of teachers and administrators across the country who must know what we know, but our educational culture absolutely prevents them from speaking out. I am still not sure why people are so afraid. There are many publications over the years reporting how bad the situation is as you know. But none of the published media print articles made much of a dent yet. The WSJ will be coming out with 2 reports soon and she is looking for teachers to talk to as we speak. She wants to know the connection between the unions and their endorsements of products. The teacher I spoke of above just talked with this reporter. Steve
  25. Admin (Dan I'm assuming from Steve's post), The 457 with Empower is, or I thought, was exclusive. According to this article the 457 is now going to be offered by National Life Group as well, which seems odd as I thought most districts had only one 457 provider. The other issue is in Riverside we were supposed to have a blanket "no commissioned" agents/advisors on school grounds which this will be violating, I assume. I do not really understand how all this works, my other concern would be with regards to these National Life Group advisors writing policies for Empower, which sounds even more confusing. The whole point of using the FBC and Empower plan was to not have commissioned agents on the premises. If you can shed light, thank you. Anon
  26. Hi Anon, Very happy you reported this. Takes a lot of courage, but you are not alone. Teachers everywhere in the country are getting a raw deal. As Dan said, only use Calstrs Pension2, it's a great plan offered by our pension plan. Stay the heck away from all of the rest! Steve
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