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Everything posted by JudyS

  1. Hi, all, RE: advice, Vanguard offers "Vanguard Finanacial Plannings Services" for their clientele. Ongoing personal portfolio management is also available for an annual fee of 0.75% for the first $1,000,000 and then lower fees as your account is larger than that (I wish!) But I'm going to take a look at the advice site Dan recommended and see how that coincides with Brinker's portfolios. Hmmmmmmmmmmm.......... Judy Schneider
  2. Philothea -- Go to any public library and ask the reference librarian for Morningstar. It's heavy, but you can handle it. Look up all the companies you have mentioned and see which ones are mutual fund companies (I think only one is...) and CHECK OUT THE EXPENSES. The insurance companies will all add expenses ON TOP OF your mutual fund expenses. If you do the research (which should take less than an hour -- and it could be the best paid hour you ever had when you look back on it!) I think things will become more clear. Best wishes, Judy Schneider
  3. If there is enough $$ in your account (I forget the limits) Vanguard will do some advising with you on this issue. They may also advise for a fee. Just ask. Also, Bob Brinker's newsletter ($180 a year at www.bobbrinker.com ) offers suggestions, and there is also a company separate from Vanguard that offers advice. A little work with Google could probably locate that company. Judy S
  4. Blake -- Having lived in WA for so long, I cannot pretend to know how things are working in PA (Except for SPED, which in PA is "peculiar", according to the info we get on transfer kiddoes!!) However, here are a couple of ideas: it has been my experience that the people who are closest to the situation are the payroll folks, and there is usually one person in the payroll office who works with 403(b) issues. I would call until I found that person and then maybe meet them for lunch. The other people who MIGHT know something could be some of the folks from the bargaining unit or union. Unlikely, but possible. In the state of WA any district HAS to offer a product if there are 5 staff members asking for it. You need to learn what the criteria are in PA. On the other hand, everything is about to change because of the upcoming IRS regulations. So are you thinking about that and working up a presentation to make to the local district committees that will be making decisions? Because I suffer from a terminal case of curiosity, I have to ask: how would you expect to offer products with low fees? What would be your wrap or management fee? From a management point of view, I would think that most 403(b) accounts are very small fish.... you have to be with a client for a good long time to get them to the "big fish" status. Most teachers do not qualify as "high net worth" folks. You have your work cut out for you.... but if you intend to be good at what you do AND good for your clients, don't give up! Judy Schneider
  5. JudyS

    Just Boycott

    Steve -- In regard to your first paragraph, I have to tell a story. A few years ago a teacher friend told me invested in no-loads and told me the name of the fund family. Puzzled not to recognize the name, I checked out Morningstar. When I showed him the Morningstar report, he found out he was paying a front end load of around 5%. Not to mention hefty yearly costs. Two years later he stopped me and told me, all upset, how much he had been investing for 25 years and he just figured out that his total amount was quite small... I encouraged him to transfer the funds and offered to go to the library with him to show him around Morningstar. Last week I ran into him again. He said that he had been unable to transfer any $ because every time he came up with what he thought might be a good alternative (S&P 500, for instance) his advisor had a reason not to move in that direction. It took a minute to think this through, but a crazy idea came up: was this the same advisor who had put him in the unfortunate funds in the first place? Chagrinned, he admitted it was. I fail to understand. He seems like a bright enough guy, and he was upset when he realized his returns had been so small. This whole business of being a no-load missionary is so difficult!!! But I'm with you, Steve -- we shall prevail! Judy
  6. JudyS

    Just Boycott

    Steve -- I'm with you. There is very little pressure on the districts to offer low-cost alternatives because most people are not really concerned. Staff members are really resistive to the idea of learning something new in the investment arena and many are perfectly satisfied with their warm and cozy relationship with a vendor rep. When I tack up a magazine or newspaper article in the staff room, people rarely ask about it or -- apparently -- even read it. Even my good friends who are reasonably eager investors, investment club members, and fairly knowlegeable now roll their eyes at me when the subject comes up! One of the articles even had a picture of Dan Otter and no one asked about it!!!!! Can you imagine? So what do those high-cost companies have that WE no-load missionaries don't? Sales techniques, pzzazz, salesmanship, snacks in the staff room, sales strategies.... and the staff members have it all taken care of for them. They don't have to do any work, learning, or figure out what they think is the "rocket science" of it all. So how do we get out an idea that will compete with that? There must be a way. Judy Schneider
  7. Thanks, Tony. But this article can be summed up succinctly: Even under very good circumstances, variable annuities cover the entire range from "awful" to "horrendous". Not a surprise, really. Judy
  8. Hi, there, From my research a year or so ago, I came to believe that the NEA-MB is a wholly owned subsidiary of the NEA and it is structured as an Insurance Trust, whatever that is. You can obtain a prospectus for Valuebuilder from Security Benefits. If there is anyone out there who can read it, understand it, and even explain it, he's a better man than I (figuratively speaking) and I will buy him the biggest Starbucks drink he can find! The copy I got was an incredible piece of gibberish. I reached the sad but inevitable conclusion that the company intended no one to understand. Judy Schneider
  9. Tony -- This is a VERY interesting study!! The net result being that doing less than 2 hours' work per year on fund selection and using index funds, one will likely do reasonably well. Unfortunately, this approach offers no good fodder for cocktail party talk, so the practioner must have something else interesting in his or her life or be a total wallflower! Judy
  10. Jeff -- Sounds like you have a well-thought-out plan. Good ideas! Judy S.
  11. Hi, there, I would echo Tony's advice to just go ahead and build accounts of "personal $" outside of retirement savings for the time being. You will need to take a sharp pencil, a clean piece of paper and your 4th grade math skills and figure out whether it is even worth contributing enough to get the match. It may not be. Tax law changes occur all the time, and we cannot know the implications of various withdrawal strategies years in advance. It may well be that there are more advantages to withdrawing from personal savings, as opposed to retirement accounts, when that time comes. Activism helps. Just look at the NEA class action lawsuit... that's the result of activists. In my school district we have a couple of "good" choices in our menu -- also the result of tireless activists. And my husband, who has a 401(k) with INCREDIBLE expenses (John Hancock, wouldn't you know!), came home delighted the other day. He had rec'd a quarterly statement and his expenses were about $150. High, you think? Well, before last quarter (which came on the heels of a big meeting with the provider, spurred on by the company activists, including my husband) his expenses were in the neighborhood of $450. Absolutely activism works. Finally, this is not the only place you can work. When it is time to negotiate your next contract or raise or evaluation, let them know that the quality of the 403(b) offering is a significant issue. Other places have better choices (you need to do some research here) and that may be a factor in your willingness to stay or move on. It happens. Good luck with this... it isn't easy, but you can do it!! Judy Schneider
  12. Hi, guys, This lawsuit is going to be interesting. I presume they filed in Tacoma because one of the plaintiffs is from WA. I wonder if one district is more sympathetic than another. But here's a weird thing. When I talked to an official of the Washington Education Association (WEA) a few months back, I was suprised to learn that the WEA itself endorses a 403b product. I have never seen it advertised or anything (probably missed it) but was SHOCKED in the discussion to learn that it was VALIC. The fellow I talked to said the company had been very willing and cooperative and put together a plan with relatively low costs. Oddly enough, he did not appreciate any smart comments about foxes and henhouses. So do other states' NEA affiliates also develop their own 403b products to endorse? Judy Schneider
  13. Ultra -- You write beautifully; it is a pleasure to read your posts. I have been a member of NEA for years and continue to be so; I believe that NEA has important functions and in no way would I want to be an educational staff member without them there. That said, we are educators and NEA is there to SUPPORT us, right? So, it would seem reasonable that NEA should engage in EDUCATIONAL practices that specifically benefit us. Instead of doing that, they have taken the easy way out and offered a product instead, when nearly anyone with a solid understanding of basic personal investment principles would see that product as deeply faulty in a number of ways. We need to ask our state, local and regional NEA affiliates to provide an educational service for us instead. They will listen -- maybe now more than ever. To begin, I have ask our regional office to provide a speaker for teachers in the area -- like maybe Dan Otter? Give it a try. Judy Schneider
  14. Tony -- One of the reasons that 401(k) and 403(b) accounts -- and others of a similar ilk -- are less attractive right now is that the tax laws have been changed. So now we have to pay income tax at the usual rate when we take $$ out of those accounts, whereas in regular accounts dividends and capital gains are taxed at a favorable (usually 15%) level. The problem is, there is no way anyone could have predicted changes in tax laws. So just like in the rest of real life, you study up, consider the options, and make an educated guess. Most of the time you end up ahead of the game, but there are no guarantees. Say lah veee... But I do enjoy reading your posts!! Judy
  15. Steve -- This is terrific, and I sure would like to have a copy... but I can't get it to print no matter what I do. Any ideas? Judy Schneider
  16. Ultra -- I agree that doing something is better than nothing, and yes, you probably won't find the absolute best answer. Anyway, the absolute best answer today will not be the absolute best answer tomorrow because things change. But it isn't an all or nothing game... think of it as a scale of 1 (nothing) to 10(the absolute best answer). You're not likely to get a 10 no matter what, but with some homework and forethought you will hit a 7 or 8 or 9 and that will be just fine. Don't waste your time mourning the 10. Judy
  17. Ultra -- I believe you can do both 403b and a 457. (This works especially well if your family doesn't need a place to live or food to eat!) If you have to choose, tho, there would be three considerations -- expenses, ease of working with the company, and expenses. Did I mention expenses? In some places the paperwork piece for the state's 457 seems onerous (takes a month or more to make changes in contributions, for instance, and the same paperwork has to go to back and forth and to the plan administrator and the payroll person and the website is slow, slow, slow) so choosing what's more easy to manage matters. If the differences between the expenses are very small, chosing the one that's easiest to work with will save you some aggravation. Judy Schneider
  18. Hi, Jeff -- I suspect the process varies from state to state. In the districts where I have worked in WA, a new vendor is permitted if 5 people get together and ask for it. Vendors are not selected by committee -- well, except for the 5 who want it/him/her. Thus, most districts have long lists of vendors. In my current district there are quite a number of vendors (20 to 30, I would guess) and I believe only TWO are no-load or lo-load mutual funds, American Century and Vanguard. Judy Schneider
  19. Dear bmklaver -- How unfortunate that you have "poor" choices for your 403(b) and that those have been "pre-decided" at a state level. I am assuming that "poor" choices means that you have no no-load or lo-load fund families like American Century, TIAA-CREF, Dodge and Cox or Vanguard. Right? But remember, PEOPLE made those decisions, and those decisions can be changed via other people (like YOU) asking questions, requesting different options and bringing pressure via interest groups. For teachers, the interest group would mean your union, probably. Do not dispair... decide what you want and go after it. People all over the country are beginning to do that in small ways as well as in ways that involve large numbers of people. Educate yourself and agitate the powers that be. It can and will work. Need inspiration? My husband recently agitated for reduced fees / expenses in his conpany's 401(k). Did a little research on how much the workers were paying (which no on realized!), made a few calls, got a few friends to join in the chorus. In less than 6 months they managed to get the expenses reduced by 30%. So you can do it! Judy Schneider
  20. Rick -- Since I am working after retiring, we take my measly retirement income to live on and put my salary (except for the medical, etc. benefits that we need) and put it nearly ALL into tax deferred vehicles. That would be a 403(b) and "Deferred Comp", which is essentially a 457 plan. That made more financial sense to us that working more years for a very small increment in retirement income. For us. Maybe not for anyone else. Good luck as you explore your options. Judy
  21. Dr. Rick -- A couple of years ago I retired, though have since worked part time in school districts. Upon the occasion of my retirement, Vanguard allowed me to open an IRA, which is eligible for Admiral status, and transfer $$ from the 403(b) to that. So now I have TWO types of accounts, the Admiral IRA and a 403(b) to which I contribute monthly. I wonder if that would work if you moved from one district to another... could you open an IRA in July or August when you were not techneically employed and move $$ then to an account which would be eligible for Admiral shares? Hmmmmmmmmmmm..... might be interesting to ask. Hope there's a kernel in this little story that will give you a way of approaching Vanguagd to get what you want. Judy
  22. JudyS


    Vickie -- It's easy... call Vanguard and they will send you some forms. Then go to their website and look through some of their offerings (if you are a younger teacher, you probably will want more in stock funds than in bond funds). You will find lots of materials to read on the Vanguard website. Do your best to pick a fund to invest in, and get started. Then, over the next 6-12 months begin to educate yourself (starting with John Bogle's COMMON SENSE ON MUTUAL FUNDS or Dan Otter's TEACH AND RETIRE RICH. ) Once you know more, you might decide to switch your choice -- most people refine their choices as they learn more. Just like your students do!! Judy
  23. AP Teacher and RTS: I could not figure out how to make this link work, through tried and tried again... Yes, the relationship between NEA and SB is problematic, from my perspective. The only thing that it's better than is no 403(b) account at all... The trick is the education of the participants, and neither SB or NEA does a creditable job on the education piece. They should be ashamed. Judy Schneider
  24. JudyS

    403b Abuses

    Hi, John! Didn't you speak at an investors' fair in Bellevue, WA a couple of years ago??? I have your book! (I have a signed copy; if anyone wants to make a ridiculously high bid for it, let me know!) With 403bs, high expenses are THE problem, THE issue, and very few "professionals" are addressing that area because it's not in their best interests. Most teachers get stuck with insurance products, marginally educated "advisors", and the teachers' unions even stand behind some of these products. The high expenses cost teachers many, many $$ each year, but no one, to the best of my knowledge, has calculated how much is lost as a result on a state or national level. It's a disgrace... Thank heavens for the few voices that speak out with knowledge and understanding -- this website among them. Judy Schneider
  25. Hi, Needs Help, Generally good advice is to go to www.Vanguard.com and take advantage of the educational opportunities right there on the website. There are good folks there at the end of the telephone line who will guide you to certain spots or explain points you might not understand, too. You might want to start investing in an index fund while you begin to educate yourself. Or they have a set of funds that contain a predetermined mix, depending on your age. Educating yourself might start with John Bogle's Common Sense on Mutual Funds, and the excellent Swensoe book, Unconventional Success, A Fundamental Approach to Personal Investment. Good luck and good reading, Judy Schneider.
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