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  1. My wife checked again and found that she was mistaken. Whew! The WEP docs on the Social Security site says: If you work for an employer who does not withhold Social Security taxes from your salary, such as a government agency or an employer in another country, any pension you get based on that work may reduce your Social Security benefits. Since my paychecks always had SS deductions, I'm ok.
  2. I've recently retired and am getting a pension through CalPERS. Although Social Security is several years away for me, my wife mentioned something that gave me pause. After looking at the Social Security website, she said that if you were receiving a pension, your SS payout would be decreased. I haven't been able to find that information on my own. The closest I see is the provision that if you received a pension from a job in which you did not have to pay SS, your SS payments would be reduced( Windfall Profit Elimination). Every job I've had, though, I have paid into SS. Does anyone know whether I'll see a reduction in SS given my circumstances? Thanks!
  3. For quite a while now, my main 403(b) vehicle has been a low cost 500 index fund. I am a "Random Walk" believer although it has been harder to keep the faith lately. At the end of last year, the system I work for eliminated my 403(b) provider and I have since enjoyed two nice paychecks that are fatter for having no 403(b) deductions. I've been on the verge of opening a 403(b) with Fidelity, but somehow watching the meltdown has made it easy to procrastinate. I don't know if the Boggle way conceived or was meant to deal with a meltdown of this scale. I am no economist, but I read a lot, and I cannot see any development that will stop the destruction. I'm doing well now. It seems likely that I will keep my job since I've recently added the duties of a departed employee to my own. I don't see needing my 403(b) until twelve or fifteen years, and I have non-retirement assets that would tide me over for a decent amount of time. I have cut back on my discretionary spending for reasons of psychology and not financial necessity. Millions of other people are doing the same, and the vortext just gets deeper and faster. Maybe the trick is to be a contrarian. I certainly was in regard to the housing bubble, and that worked out well for me. If the masses are flooding towards the exits, maybe this is the time to buy more of the market. Hard to find the conviction to do that after reading the papers. Interesting times, eh? -John
  4. I'm still trying to work out what to do about my 403(b) now that the CSU has eliminated my current company. One possible piece of good news is that Fidelity will offer the Spartan Index Fund (according to a FAQ at http://www.calstate.edu/hr/benefitsportal/tsa/faq1.shtml#Q5 A customer service representative at Fidelity indicated that the U.S. Spartan Index Fund is one of the fund investment choices effective January 1, 2009, but it is not listed on Fidelity’s fund sponsor insert that is included in the Enrollment kit. Is this fund available? Yes, the U.S. Spartan Index fund is an available fund investment choice as of January 1, 2009. Fidelity has confirmed that the U.S. Spartan Index fund was inadvertently omitted from the fund sponsor insert. If this is the same as Fidelity Spartan 500 Index Investor FSMKX, it has even lower costs than the USAA index fund. -John
  5. I'm with the CSU as well and have been investing with USAA in a Index 500 fund. Not much joy there at the moment, but expenses are very low. I called Fidelity to get information on their 403(b) offerings. The rep told me that, being with the CSU, I could get all of Fidelity's funds and agreed to send me information right away. He was at least wrong about getting all Fidelity funds, since the online brochure looks like a rather small subset (that does not include a 500 index fund). Also, a week has passed with no sign of the promised information. I don't think that they are deceptive, just incompetent. What little I understood of the changes in 403(b) regulations made them sound like a good thing. In the CSU offerings, at least, it has removed a lot of options (mainly variable annuity junk, but also low cost providers like USAA). I liked the way the memo from the CSU said that they were doing this to help us poor confused investors who were bewildered by the many choices. Right. -John
  6. This is a pretty elementary question, but I don't know the answer. My 403(b) in invested in an index fund with USAA. If I wanted to take some of that money out of the index fund and put it in a USAA CD, or Treasury fund, how much is protected should USAA go under? I know that in a non-retirement account, only $100k is insured through FDIC. What sort of insurance exists for a 403(b), not against market loss, but against the collapse of the 403(b) company? Thanks, John
  7. I contacted HR at the Chancellor's Office again, quoting the email from Vanguard saying that they don't require a guarantee to become a 403(b) provider. I asked if Vanguard could now be added as an option, or if they could point me to a document in which Vanguard said they needed a guarantee. I was told that a new group of 403(b) providers has just been selected for the CSU, and that a large mailout would take place to let employees know of their options. When that had happened, I could have Vanguard contact the CSU. I will give it a try and see what happens. Either something has changed recently, or there has been some misinformation. How odd is it that a premier mutual fund company like Vanguard would have been excluded as an oversight? -John
  8. I am a CSU employee and have been looking into getting Vanguard added to the 403(b) options. So far, I've gone through two layers of HR at the Chancellor's Office, only to be told that: "Vanguard wants the CSU to guarantee a certain amount of transferred funds in order for them to even consider signing an agreement with the CSU. The 403(b) plan is voluntary, and our office is prohibited from soliciting business on behalf of any TSA vendor, and we are also prohibited from providing a guarantee of the number of participants or funds to be deposited with any particular TSA vendor." I checked with Vanguard, though, and they said that this was incorrect and that no guarantee was required. I'm not too unhappy with the USAA Index fund that I have for my current 403(b), but I wonder why it is such a big deal to get Vanguard as a choice? -John
  9. My wife has started teaching high school in San Diego and wants to open a 403(b). On the 403bcompare site, it looks as though she should be able to deal directly with Vanguard. She also met with a salesman at school. When she told him "no annuities" he showed her a list of companies, including Vanguard, that he could provide (for .7 percent). I'm going to look at the paperwork this weekend, but wondered if I am missing something. Can she go directly Vanguard without a salesman? Thanks, John
  10. I was talking to some people at school about investments and one of them asked me to look at his portfolio. He has one instrument that confuses me (even after wading through the documentation. It is an annuity from AXA called Accumulator Elite. His broker/financial advisor had him move a fair chunk of money from mutual funds in his 403(b) account to the AXA annuity. The selling point was that it would pay out 6% of his original money beginning 10 years after the annuity started, with larger payouts if he waited until later. He is in his early fifties. So, what does this buy him? 1) If he dies, his beneficiary gets his original investment back. (But wouldn't term insuracnce be cheaper?) 2) He gets the 6% payout guaranteed, so no worry about market crashes, etc. (But 6%/yr - 2.5% fees could be beat by an index fund). What I don't understand is that this instrument invested his original money in a series of propriety mutual funds (one of them an AXA fund). I'm calling them proprietary, since I can't find them on Morningstar. For instance "AXA/Premier High Yield" or EQ/Capital Guardian Research." Will the 6% he is guaranteed by increased if these proprietary funds do well? I would guess so, but I'm having trouble finding it in the documentation. Doesn't it stand to reason that the management fees of the proprietary funds are higher, since he is a captive owner? My personal opinion is that he got into an expensive investment and would do better bailing out and going the indexing route, even with the associated fees. This guy is intelligent, but has zero understanding of investing. Thanks, John
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