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  2. I figured as much. And the GWN rep couldn't wait to get me to schedule an appointment with her to go over the paper work. She said she has Security Benefit, as an aggregator, yet was telling me she was unfamiliar with DirectInvest and no one ever asked for it, ever. She is ""required" to sit with me as I cannot fill out the investor risk profiler myself as the FS is a "highly regulated" industry. My confusion was thinking that though SB is not on my vendor list, as long as I was able to create an account with them, I could, as per OMNI. And being the NEA -endorsed product I'd be able to "directly" invest in it. I was a bit surprised that NEA's endorsed product or vendor - Security Benefit -was not on our P3 lineup.
  3. Last week
  4. If SB is not on your district’s vendor list, I think you can’t use SB’s NEA Direct Invest. It sounds like OMNI is giving you the runaround IF SB is on the vendor list. GWN should not be involved?
  5. Thanks for your offer. I’d like to chat about it to see if I understand it clearly.
  6. I read about your successes with keen interest. I know it was time-intensive and required many meetings. With less than half the teacher’s contributing to a 403b or a 457, I’ve been focusing on educating the teachers which I deem an easier battle to win. Aspire is not so bad.
  7. I shortened the name, it’s GWN employee deposit account. I was able to create an account because NEA acknowledged that I am “eligible”. They emailed me the secret code to create a security member 403b account. I sent Omni the salary reduction firm with this number and they told me I had to go through GWN the aggregator. It’s a confusing web.
  8. I’m too lazy to type much, but I got Vanguard and Fidelity added to my wife’s district. Nobody helped me and I wasn’t even an employee. This is achievable. I can help.
  9. I’m confused because I don’t know what an aggregator is and I don’t know what GWN stands for. Didn’t take the time to google, sorry. I’m also confused by you saying that you already have a SB account, but SB isn’t an approved vendor. It would seem you couldn’t have the former without the latter. Aspire is an entirely different vendor that is separate from SB.
  10. Thanks. I’m trying to find time to improve the software, the two big ones: 1. Model social security and possibly pensions. 2. Instead of just calculating a specific outcome if you follow a specific strategy, I want to determine the best outcome by having the software examine a variety of different strategies (take SS early, go beyond the 0% bracket on Roth conversions, etc). ...I haven’t gotten into the Mega Backdoor Roth. My software models Roth conversions. I personally only fully understand the regular Backdoor Roth, I haven’t had the energy to learn the Mega Backdoor Roth yet (maybe never will).
  11. OMNI told me I need to create an account with GWN, our approved aggregator, in order to contribute to SB's DirectInvest. I have already established a SB account and received the plan number. I had to call the GWN number who had to get "the advisor" to call me directly. She stressed she needed to meet me personally to "fill out the highly regulated forms and take a risk assessment". I told her I want the DirectInvest and knew my funds already. She had to research the DirectInvest product because "nobody" ever uses it and call me back. She agreed to mail me the 403b forms after I told her I'd call her if I had a question and that I'd allow her to mail them in for me. She claimed she did not know if the enrollment form has a spot on there to choose the DirectInvest product. Using the SB phone number was helpful but we do not have SB listed as an approved vendor so is this all a useful attempt? I didn't see the the SB DirectInvest option on Aspire's platform, the current aggregator I use for Vanguard Index funds. I think I'm confused if GWN will just act like any other vendor and try to enroll me in SB annuity or if that is indeed the only way to get into the SB DirectInvest product. It is not a big deal for me to get SB but I did want to see first-hand how they handle it.
  12. That was indeed a deep dive. Thanks for outlining the possibilities. You join the ranks of Big Earn and White Coat Investor -if not exceed them - on details, applications and explanations. I love your idea of the Mega Back Door. I asked in my district if we could contribute more non-deductible money into our 403b account and we can't . It does depend on your employer allowing you to do this, as you probably already know.
  13. arich, You've identified a huge part of the problem. The articles and interviews are highlight the annuities that the insurance salesmen sell teachers and their tactics. Today I spoke with the Barron's reporter and though I talked about OMNI being the TPA, I didn't present it as concisely as you. I'd like to learn who owns OMNI and Id like to learn how to go about getting districts (starting with mine) to agree to drop the P3 in favor of a single vendor like Vanguard. Knowing that it doesn't cost the district anything to use OMNI (only the participants) it seems challenging (to say the least). Additionally, the added administrative costs and responsibilities of record-keeping in-house would be their reasoning to do nothing about it. It would take an army, a vocal army, to get my district to stop using OMNI and allowing non P3 vendors, such as Vanguard and Fidelity. Those who had them prior to 2012 are grandfathered in but the rest of us who unwittingly did not jump on board are out of luck. I know it has been done but I just haven't figured out how to teach enough teachers and then get them to join in the battle. My union has been hearing it from me, but told me they don't want to appear to be giving "investment advice". I think they are hiding behind that excuse. I asked admin to let me make a presentation to teachers on the 403(b) and I have included an explanation of OMNI and its role. I will carefully educate and not "advise", of course. And it's not until September. Featuring a story on the TPA is a great idea, IMO.
  14. That’s great that you are set up with Fidelity! You have probably figured out that if remaining SB money is charged an average of 3%, you might be better off paying the surrender fees. Thanks for the update.
  15. Holy smokes......It's been over 2 months since my initial post on this thread. I am happy to say that a large chunk of my money has been finally moved to my new Fidelity account. Fidelity was great to work with. My former provider (Security Benefit) was a pain to work with and made things difficult. My third party provider was not as helpful as I had hoped. They helped to answer questions but there was nothing they really did to help make the transfer any easier. I thought they would be more helpful and do most of the work for me. Not the case at all. I was able to transfer $55,000 out as "free money". The remainder would incur the rolling surrender charge. I stopped contributions to Security Benefit and moved those to Fidelity. My plan is to check back in with Security Benefit and have them run my "free money" numbers and repeat this process for the next few years until the surrender charges make sense or I just get tired of getting all of the signatures needed. The process is a pain and takes much longer than I anticipated but worth it in the end and should get easier now that I know exactly what to do. Future years will be a rinse and repeat cycle. I really appreciate the responses on this thread and can't thank krow36 enough for your insight and suggestions. You were a huge help and you were spot on with your advice.
  16. I just called Vanguard and authorized them to convert some Admiral funds to the equivalent ETFs. No cost, quickly accomplished, the transaction is at net asset value and they can convert 100% of the fund, including fractional shares (on both sides of the conversion). In a taxable account, there is no taxable event in the course of this conversion. It looks to me that Vanguard is going to favor ETFs going forward (the new lower fees; I'm also remembering how they converted all of their accounts to brokerage accounts awhile back), so I'm getting with the program (so far just in part). The cost advantage is very small, so I did this out of curiosity about how it works more than visions of future riches. Bottom line: nobody needs to make that switch, but if you do want to swap into the equivalent ETFs, it's easy.
  17. Earlier
  18. I actually have a great idea for an article if anyone wants to run with this. In NY the TPA that many districts use is OMNI. They've gotten VERY big. If you look at what they've done it's criminal. They dangled a carrot in front of districts after the 2008 crash when district were cash strapped and offered to absorb the costs of running the 403/457 programs IF the districts would limit their offerings to only companies that were willing to absorb the TPA fees. This about and RFI that essentially completely eliminated the access to Vanguard and Fidelity in most districts. They called this the Omni P3 Programs and it looks great but it smells like............ My sister in law was caught up in this and was so disgusted that she stop her 403 contributions. LONG STORY. My wife and I happen to be in 2 of the 6 districts in the area that do not offer P3. We have access to Fidelity, Vanguard and the NYSDCP (457) of which we max out both plans for a total contribution of $76,000 to Vanguard and NYSDCP. In a time when we're fighting for better and fewer choices, OMNI is making it easier to insurance companies to build a foothold in the NY schools. It would be interesting to see if local unions are even able to negotiate this. I have tried for 4 years to have Vanguard reinstated at my sister in laws district. all my requests to admin and the local union have fallen on deaf ears because I don't work there. I'm in the finishing stages of putting her in Security Benefit NEA Direct Invest to gain access to to Vanguard Index funds. Hear in my district we've essentially chased out all the insurance companies from roaming our hallways. I don't know how put they still get to my young teachers and then I have to show them the way to low cost investing. What do you think, would this make a good article.
  19. Thanks MoeMoney and Steve, I did go full Liverpool at back end but figured most would turn it off. Reds might argue there wasn't enough Liverpool! 🙂
  20. Its a common practice during negotiations that School board negotiators can claim anything. It's up to the union's negotiating team to decide on whether to deduct or not.
  21. Thanks Dan. Sandy said you were awesome. Sorry I was not there. Two many commitments on the first weekend of every month! All the other weekends are empty. What is it about the first weekend?
  22. Happy birthday Dan! (Why would you want to be 38 again anyway?!) Maybe just a bit of Liverpool FC on the back end, but hey, it's a passion and your podcast:)
  23. Thanks arich. I'll send you a message for contact information.
  24. New pod up http://teachandretirerich.libsyn.com/utla-talk-65 We discuss recent UTLA retirement plan workshop. There's also maybe a little bit of #YNWA #LiverpoolFC talk
  25. I have a question about our contact negotiations. I haven’t been able to find an answer and I know there are many smart people on here that might be able to help out. We have been without a contract for a year now. Recently, we were close to settling when an issue with retro pay came up. The union was prepared to except terms of a new contract. The new contract included retroactive pay for the year we went without a contract. The board claims that we owe money toward the health care premium at the rate we would have paid if we were making the salary that the retro pay covers. The board claims we owe about $150,000 dollars toward health care premiums which they intend on deducting from our retroactive pay. Question: Is it common practice to deduct health care premiums from retroactive pay? As I understand it, the premiums were already paid for.
  26. ...a few additional details after looking through the data more: In those first 40 years, thanks to Tax Gain Harvesting, you were able to erase $735,849 worth of capital gains from our taxable account. That represents $1,827,414.26 worth of sales/income. In those first 34 years, thanks to Roth Conversions, we were able to move $290,164.81 from our Traditional account to our Roth account without paying any tax. This demonstrates the immense value of Traditional investing. RMDs generated very little tax, which once again demonstrates the immense value of Traditional investing. $567,206.40 worth of RMDs were issued. $21,130.83 worth of tax was paid, effective rate is 3.7% Two years RMDs didn't generate any tax thanks to the standard deduction. Fourteen years RMDs pushed us into the 10% bracket. Tweleve years RMDs pushed us barely into the 12% bracket. I'm not breaking news, but that Taxable account is a huge tax drag! By our late 70s (just a few years after we started paying taxes for the first time), most of our yearly tax bill is caused by the dividends being produced. By the end we've paid $108,400 due to qualified dividends and $30,235 due to unqualified dividends...that represents 87% of all the taxes we paid! Obviously the ever increasing dividends are expensive, but they have secondary effects. It lessens our ability to perform Roth conversions, which means our RMDs are larger, which means we pay more tax. It also lessens our ability to Tax Gain Harvest (which didn't hurt us much in this hypothetical run). All of that is to say, the taxable account may (in truth) account for more than 87% of the taxes we paid if you include the secondary effects.
  27. I've continued to study how one might minimize taxes in retirement (Part 1 and Part 2). I'm writing software to model the strategies I've previously laid out and eventually to optimize them. The software isn't as sophisticated as it'll eventually be, but it just provided its first bit of interesting data. Suppose the following: You retire at 37 years old on Jan 1. You'll die at 100 years old on Dec 31. You're single. You've got $1,144,198.89 (77.37% taxable, 18.15% traditional, and 4.48% roth) You spend $35,000 per year on living expenses. You follow the basic steps I previously described (no fancy optimizations). Notable results (bugs are possible, I still need to test the software, hopefully this data isn’t errroneous): The first 34 years (without RMDs) are very good to you. You don't pay a single cent in taxes thanks to the 0% capital gains rate! Your balance is now $2,884,664.16 (52.85% taxable, 10.67% traditional, and 36.48% roth). That balance is quite nice to look at, but notice how much the Roth account grew thanks to Roth conversions. Now you're 71 and the next next 30 years (with RMDs) are pretty good to you too. You pay taxes every year. The first 2 years your RMDs are below the standard deduction, but the unqualified dividends from your taxable account push you into taxable territory. You continue to enjoy the 0% capital gains bracket though so no taxes on qualified dividends and you keep Tax Gain Harvesting. You pay less than $500 in tax each year. The next 4 years your RMDs exceed the standard deduction, but you continue to enjoy the benefits of the 0% capital gains bracket. You pay less than $800 in tax each year. Thanks to increasing RMDs and increasing dividends from your taxable account, you're no longer able to take advantage of the 0% capital gains bracket (Tax Gain Harvesting has come to an end after 40 years, not a bad run). The next 2 years your Ordinary Income (RMDs and unqualified dividends) keeps you in the 10% tax bracket. The next 22 years your Ordinary Income (RMDs and unqualified dividends) keeps you in the 12% tax bracket. By the time you're 81 years old your taxable account is a runaway train and you're paying more tax due to qualified dividends than ordinary income (RMDs + unqualified dividends). When everything is said and done: Your portfolio is worth $9,763,150.34 (52.13% taxable, 1.28% traditional, and 46.59% roth), basically the traditional's decrease became the roth's gain. You avoided taxes entirely for the first 34 years. You paid $159,766.00 in taxes during the final 30 years. Taxes started at just $399/year but grew to $12,372/year. Taxes averaged $5,325.53 in those final 30 years. Tax growth was mostly driven by the ever increasing dividends thrown off by the taxable account and not by the fact that the RMDs tended to increase year over year. Since our ordinary taxes eventually bumped into the 12% range, it may be worth experimenting with doing Roth conversions in the 10% bracket in the years when we're leading up to the 12% bracket...that may prevent us from reaching the 12% bracket and that might increase the value of our accounts? This is where a simulation is helpful. 100% of capital gains tax was due to dividends...I'd have to look closer to see if any taxable sales (i.e. the tax gain harvesting) was used to pay bills, but we certainly didn't have to sell taxable shares that would be taxed in order to pay bills. We never had to tap into the Roth Account at all. A few notes on the particulars of the software (some of which introduce small/negligible inaccuracies) that was used to calculate these results: It uses inflation adjusted dollars (2018 dollars). It pretends RMDs are issued on Jan 1. It pretends that dividends are issued all at once on Jan 1. 1.93% of initial taxable balance are dividends. 83.85% of dividends are qualified. It attempts to Tax Gain Harvest right after those dividends are issued. It assumes living expense will remain constant at $35,000 every year. It pays all of the living expenses for the year right on Jan 1 after Tax Gain Harvesting. It pays the tax bill right on Jan 1 even though it isn't due until April of the following year. It reinvests the surplus in the taxable account right away (on Jan 1). It assumes a steady 5% real return every single year. It models RMDs. It does Roth Conversions every year as long as doing so doesn’t generate any taxes. It assumes the tax code never changes (2018 tax code). It does not include social security or pensions yet.
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