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tony

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  1. We tend to over analyze scenarios here which can confuse. The only reason we mentioned Roth IRA is because that's the account the young lady is already in. A tax sheltered IRA would have been just as suitable I guess. Which is better depends, but saving in either one is a good move regardless.Considering she won't be saving more than the IRA limit, why bother even considering a 403b that is expensive and roadblocked with possible surrender fees and requiring the hassle of initiating a rollover. Looks like charter schools are just as ignorant about offering its employees decent choices as our public educational institutions. Unfortunate.
  2. Hey A Internet User Since she may be in New York for only a short while and depending on how much she plans to save during this time, continuing in a Roth IRA would be the easy smart answer. We like index funds here so make sure she is investing in a Fidelity Index fund or funds and is diversified across asset classes. We recommend a simple 3 fund portfolio here : 1) A Total Market Index Fund, 2) A Total International Index Fund and 3) a Total Bond Index fund. Or maybe even a target fund that corresponds with an estimated retirement date. Target Funds are my personal favorite for inexperienced/ novice investors who are just now trying to learn the investment ropes. Now if she plans on saving more than an IRA allows, you might want to list for us all her choices available in her school provider list. Also see if her district might have a 457b plan available to her in her school district. Frankly, I wouldn't bother with the 403b if she only plans to be in New York a few short years and if she won't be saving more than the Roth limit allows which is $6,000.00 max per year unless she is older than fifty then she can put in an extra $1000.00. This would especially make sense if all her 403B choices are high fee insurance products. By the way it is rare to find a school system that offers a match within a 403b. Some do but they are few and far between. Regards Tony
  3. On further examination. Actually, your NEA link does show Direct Invest as an option so The NEA Direct Invest is your best option You will have to go to the Security Benefit website , find the direct invest application and send it in. Pick The Vanguard Funds. Don't seek the help of an advisor as this is something you do on your own. I'm afraid they will draw you into the wrong funds. https://securitybenefit.com/individuals/product/nea-directinvest You could pick and be completely diversified at low cost Vanguard Total Stock Market Index Vanguard International Index Vanguard intermediate bond index
  4. NEA choice is not necessarily the best choice If you end up in the wrong funds program. They advocate some high fee choices. I imagine they are getting some kind of kickback for their endorsements. What you need to do is sign up for NEA Direct Invest and pick the Vanguard funds and do this on your own without any financial advisor interference.This will require linkage through Security Benefit which I 'm not sure you have . You will have to do further research. None of your other choices look all that appealing either. Valic might offer some non insurance choices that might be O.K if nothing else pans out better for you. TD ameritrade might allow you to open a brokerage account. If you can do that, that might be your best option but your list has no links to further understand what they are offering your particular school system. What state are you in? Does your state have a 457b plan available to teachers? Give us a little more info please
  5. SC Teacher You can always count on Krow's advice . He is probably the most technically/detail accurate poster on this forum. I think it's good from time to time to show our appreciation to our contributors like Krow on this forum who help others straighten out/ sort through their 403b/457b messes apparent in most school 403b plans. Unfortunately most school systems don't have a Krow on their personal staff. That would be helpful to most teachers but the insurance vendors would probably try and get him fired. So you have to come here which is probably quicker anyway.
  6. A Nice Tribute https://www.forbes.com/sites/johnwasik/2020/08/12/why-vanguards-jack-bogle-matters-in-times-of-global-financial-crisis/#119a8d33244d
  7. Sorry about the repetitive chart. Have no idea why or how it happened or how to fix it. I keep edit and deleting it but it comes back.
  8. For those who do have small cap value or an extended index in their portfolio, its saving grace could come on the other side of this Covid-19 induced bear market.Are we even in a bear market? a recession? Historically small cap stocks have earned a decent amount of their long-term premium in the aftermath of a bear market. Incidentally, to me adding smaller caps is not tilting. It's more like adding a supporting player. If you are going to do this, you need not time the market. You need to just own a slice of extra small caps through an index fund and throughout your investing experience.It might or might not be rewarding.
  9. ScottO Thanks for the flashback. Oh wow, I remember that Steve doesn't like Merriman! Investing isn't an exact science, and no one has the exact formula but I do know Steve owns the Extended Market Index now. I was torn between owning small cap value index vs small cap index vs the extended index. I chose the small cap index. From my experience it's been a good performer and it certainly doesn't hurt my performance. It's been a positive. At the same time, I know/knew a fellow teacher years ago now retired who owned only one fund, the 500 index, and did very very well with no diversification beyond the S&P 500.
  10. Scott 0 The simple answer here is diversify diversify diversify!!! You need to take those articles with a grain of salt. These journalists have to write about something to catch your attention. I'm not saying there isn't some truth in the articles just that they can sometimes be sensationalist to attract readership. You can learn from reading them but always stay cynical. Obviously the simple answer is diversify beyond the 500 index . A total stock market index has always been a better choice in my opinion but even there you need to keep your eyes open . Plus as the Morningstar mentions smaller stocks in a portfolio are always a good idea and thats why I recommend a 4 fund portfolio which includes an extended market index or a small cap index fund in the mix. I will hear from Ed about this I'm sure and he will have a pretty good reason why I am out of my mind with my comments, but I'm keeping my small stock allocation. I basically own the Vanguard life strategy fund ( index fund of funds) plus some Vanguard small cap index fund, plus some cash.
  11. This is kinda the hard part to decide.,which target fund would be best for her. I think slightly more aggressive might be best with hopes the market stays on her side. I am worried about our economy short term. Too much politics is in the air as well as this virus's impact on the economy. So far though the market seems to be saying DAMN The Torpedoes. The election results might deflate or spark the market depending on the outcome. I'm glad Whyme is back with us.
  12. Marian I'm late to this discussion so I will give you my two cents quickly and briefly. I don't want to add confusion as these discussions can sometimes get more intense than they need to be although, the advice is always very good if you can dig through all of it. I usually recommend the Roth for most folks. I see much higher taxes in the future based on what I am seeing in politics. In your case Marion I think it's not so much which you choose at your age although I think a Traditional is best for you in your circumstances. What matters now more than anything at your age is saving as much as you possibly can-lights out!! , especially since you say you have a meager pension. Fees, Fund choices, Roth vs Traditional are all important considerations but saving like crazy is what you need to do now. and yes, a Vanguard Target Fund 2040 is a good choice. You don't want too conservative of a target fund mix since you are trying to grow your account. Well not as brief as I wanted to be -sorry Oh one more thing-stay away from these 403b salespeople. They will hurt you more than help you in achieving your goals as contradictory as that may seem. Tony
  13. Ed Are you missing something or am I ? The S&P 500 he has available is not the Total Stock Market Index so a 10% allocation in small caps does help make his portfolio a little more diversified. I was not encourage him to tilt. I was encouraging him to try and be fully diversified considering the funds he has access to. I never recommended he go 50% small cap.
  14. I think you would be wise to keep some small cap allocation because the 500 index is larger cap funds. As far as international goes, I'm not crazy about them and only hold about 20% in my portfolio and they haven't done all that well in the last several years but today's Vanguard ,post John Bogle recommends 30% allocation. The 500 index includes American multi national companies so you are getting some international exposure there. Plus you say you already own some internationals else where. I agree with Whyme about bonds especially if you plan to stay in education and collect a pension/social security. That could count as your bond allocation.. Ultimately you will do fine if you stick with the Vanguard funds.. Let us know how you decide to proceed. Portfolio 3 keep in mind is very aggressive. In down markets that 50% small cap might retreat significantly. If you will be able handle that than it's all good. If losing 40% or more of your portfolio bothers you than I still think portfolio one might be better. You can always lower your small cap exposure when you get closer to retirement.
  15. Cranberry 44 You have some decent choices and you seemed to make a good choice with your selections but they are narrow in scope. I think you would be wise to allocate a portion -atleast 20% to Vanguard Developed Markets(international) Index and at least 10% to the Vanguard Small Cap Index. Something like this might work but keep in mind there is no exact formula for success although sticking to index funds is smart. Diversifying across all assets classes is always a good idea. 60% VFAIX 20% VTMGX 10% VBILX 10% VSMAX I hope I have helped and I wish you my best in your teaching career. I think you will do very well with this allocation long term. Tony
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