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Everything posted by krow36

  1. I'm not sure how you work it into a 1 hour presentation, buy this calculator is fantastic for showing the effect of fees over time: https://www.360financialliteracy.org/Calculators/403-b-Savings-Calculator3 from the American Society of CPAs, or the same calculator from bankrate.com: https://www.bankrate.com/retirement/calculators/403-b-calculator/ You have to run it twice, once with AXA's 2.0% fee, and again with Fidelity's 0.1% fee. Subtract the 2 balances and you get $100,000s difference over not that many years!
  2. I wonder if you should start off with an explanation of how fees effect the balance over time. That would allow you to show the amazing growth due to compound interest when the fees are low. That's the motivator. Some slides could show what this explains: https://403bwise.org/education#fee-impact
  3. This thread may answer your question: https://board.403bwise.com/topic/2232-default-on-403b-loan/
  4. Teach76, I hope you return and tell us more about your district. You need a low-cost 403b because you can’t do an exchange between a 403b and a 457b unless one is with a previous employer. How many years have you been with AXA? The surrender fee is waived after 12 years. Who is your TPA (third party administrator)?
  5. I’ve been spending time helping folks on the FB 403bwise group. Those asking for information and help are the same as those that come here to the forum. The main difference is the numbers. There are usually 5 to 10 threads going all the time, each with a number of posters. Lots of participants and no doubt many lurkers. A lot of district vendor lists get examined and transfers started and annuities exchanged to index funds! Many topics of interest to teachers are vigorously discussed and are wide ranging. Except for the 403b FB group, I don’t do FB. I think the FB algorithm is a disaster for the world. However Dan and Scott’s group has probably helped more teachers in the last month than the forum has in the last few years. It’s success is undeniable! I would hate see the forum go away! It has some advantages over the FB Group. Hopefully both can survive.
  6. It confused me. A relative's Vanguard incoming transfer form had a place for a Med. Sig. but when called they said they didn't require it, that it was up to outgoing American Funds. AF said they didn't need it if the amount was less than 250k. They might have both required it for larger amounts? I agree that a phone calls to the main offices needs to be made.
  7. Tony, I think the medallion signature is usually required by the company "giving up" the funds, not the one receiving them. I would give the surrendering company a call. The money being transferred would be the net amount after the surrender fee is subtracted.
  8. krow36


    I think you should start out looking for both vendor's fees in 403bcompare: https://www.403bcompare.com/Vendors/Browse Once you know the fees, you can use this calculator to find the balance over time by running it for each vendor: https://www.bankrate.com/retirement/calculators/403-b-calculator/
  9. I think your understanding that your mother's 403b account can't be rolled into your personal IRA is correct, and that it should have been rolled into an inherited IRA. Apparently the IRA isn't titled as an inherited IRA for your benefit (FOB)? It's unfortunate that this wasn't noticed and corrected immediately, before you took a distribution. It seems like both Vanguard departments, 403b and IRA, are at fault. The experts on this sort of problem are on the Boglehead forum. Alan S. and/or Spirit Rider are often asked for advice by professionals on other forums. Their knowledge of the IRS regulations is encyclopedic. https://www.bogleheads.org/forum/viewforum.php?f=1
  10. I don't see any low-cost 403b vendors on the list. They are either annuity sellers (always expensive) or high-cost mutual fund sellers (high expense ratios and front-end or back-end loads). You can look up the fees on many of the vendors in 403bcompare where any vendor selling to CA public school districts must disclose their fees: https://www.403bcompare.com/Vendors/Browse ING often goes by Voya. Oppenheimer is now Invesco. I would ask HR if they would consider adding a low-cost vendor that offers index funds, such as Vanguard, Fidelity or Aspire. Are you contributing 6k/yr to an IRA, the vendor of which you sign up with on your own?
  11. Are you in a non-governmental 457b where the employees' 457b accounts are held by the non-profit employer, not in a custodial account? If that's the case, I'm sorry, that's tough! I suggest you post your question on the White Coat Investor forum. Those types of non-gov 457b plans are much more common there than here with us school district types. Good Luck!!
  12. pghchrism, welcome to the forum! It looks like the EJ guy has tied up Aspire to some funds he can make a profit from. I'd blame that on the district, although they are probably ignorant of the fact that Aspire self-directed would be most beneficial to their employees. I guess you could take it up with the district, but it might be a fight. The only low-cost vendor on your list is NEA Direct Invest from Security Benefit. The NEA, the national union, has "rented" their name to Security Benefit (SB) for several million bucks a year. SB put NEA on a number of very expensive annuity based 403b plans. Several years ago, NEA arranged for SB to offer a low-cost alternative. It offers a small number of low-cost Vanguard index funds and charges only $35 per year for balances under 50k. It’s based on the internet and does not use a local rep. Repeated phone calls have sometimes been reported as necessary. It’s bare-bones but adequate for those who want very low-cost and can do without handholding. The only NEA Direct Invest funds needed are: Vanguard Total Stock Mkt Admiral, expense ratio (ER) = 0.04% Vanguard Total International Stock Mkt Admiral, ER = 0.11% Vanguard Intermediate-term Bond Index Admiral, ER = 0.07% (a good substitute for Total Bond Mkt Index Admiral fund) You should not use their TR Price target retirement funds as they are too expensive (ER 0.77 to 0.96%). This webpage gives the basics of NEA Direct Invest https://securitybenefit.com/individuals/product/nea-directinvest On this webpage, click on “Enroll Now” to access the steps to get started. https://www.nearetirementprogram.com/nea-directinvest Here’s my interpretation of the Steps: 1. Read over Step 1. 2. Your district will likely require their own Salary Reduction Agreement. Hold off on giving this to your district. 3. Hold off on moving other accounts into this 403b until this account is established. 4. Complete the application form and mail it to SB. If you have questions about the form, ask us rather than trying to talk to SB about it. 5. After about 2 weeks, call if they haven’t contacted you, and inquire about your account’s progress.
  13. If you have income from early 2020, you can contribute to a traditional IRA (not a Roth IRA) for 2020 and lower your AGI by that amount, up to 7k if you are over 50. You can do it for 2020 up until tax reporting day. Just call up Vanguard or Fidelity. There’s an income limit to deductibility of tIRAs, but if you were not covered by a retirement plan with your 2020 job, I don’t think the limit applies. https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-not-covered-by-a-retirement-plan-at-work
  14. Your link doesn’t work: https://www.marketwatch.com/story/want-to-get-more-people-to-save-for-retirement-make-it-the-law-11615990210?reflink=mw_share_facebook&fbclid=IwAR3I74DkDG1Ju83z6y2FZp0OVevVXsIiM8ewD_5iw-0PbzuIWwo-ciOjD1I I don’t think the proposed legislation applies to teachers. It’s for employees who have NO retirement plan. Teachers have a pension , which they are required to participate in. 403b and 457b plans are voluntary unless they are part of the required pension plan. As in a hybrid pension plan.
  15. Hi Amanda, welcome to the forum! The lowest cost vendor on that list is Fidelity. They charge only $24/yr. Their 403b is a custodial account, not an annuity contract. They are internet based, so there are no local reps (salespersons) in the teacher's lounge wanting to do the paperwork for you so they can earn that big commission. Start here on Fidelity’s 403b website: https://nb.fidelity.com/public/nb/ready2enroll/planoptions “Plan Basics” explains their 403b plan and “Investment Options” leads you to the list of all the Fidelity funds. I suggest you use only their index funds, either what’s called a 3 Fund Portfolio like below, or a single Freedom Index 20XX fund, ER 0.12%. Fidelity® Total Market Index Fund, FSKAX, ER 0.015% Fidelity® International Index Fund, FSPSX, ER 0.035% Fidelity® U.S. Bond Index Fund, FXNAX, ER 0.025% The 3 funds or a Freedom Index 20XX give you maximum diversification, which is desirable.
  16. Teach76, welcome to the forum! I don't see any low-cost vendors on that list. The best vendor is probably Lincoln Investment's Solutions Premier. It adds 1.33% to Vanguard funds, plus $65/yr. Your district needs to add a vendor like Vanguard, Fidelity or Aspire! They only get added when employees ask for them. Are you aware of the MA state 457b plan, called MA SMART? If your district doesn't now offer it, you may be able to get the SMART people to help the district add it.
  17. krow36


    I've never heard of an insurance company requirement to have a large sum of money held by them. Is the $50,000 held in a 403b account? Are you referring to a TIAA Traditional account which earns 3 or 4% and which can have restrictions on taking distributions. Some versions require distributions over a 10 year period. Have you talked to TIAA about taking distributions?
  18. Your Equity Indexed Annuity (EIA) is a very complex insurance product that is VERY hard for anyone to fully understand. It is sold as a way to get the benefit of stock market returns while avoiding the downturns that the market experiences from time to time. Although I think you won’t loose your contributions, the positive market returns are severely restricted. Only part of your contributions are tied to market gains, there’s a limit on how much market gain is allowed, and stock dividends are not counted. So while the rate of return of the full S&P 500 Index has averaged over 13% over the last 10 years, and is over 20% some years, the return of an EIA is usually in the 2% to 3% range. You haven't lost your contributions, they haven't grown like they would have if they had been invested in a custodial (non-annuity contract) account.
  19. Roberta, welcome to the forum. I'm glad you finally found us! The products of NLG are usually their Fixed Index annuity or Equity Index annuity, the same sort of thing I think. I know a bit about them and will cover that, but first, please tell us the 403b and 457b vendors that your district allows you to use. You may be able to find the list by just googling "your district, 403b plan". Your HR office should have it, or refer you to their third party administrator (TPA) who usually maintain the lists. Hopefully we can find a low-cost non-annuity vendor on the list, and suggest a transfer of your NLG balance. You may have to pay a surrender fee to transfer out, but it's possible you have had the account long enough to avoid the surrender fee? You should call up the 800 help #, not the local rep, and ask for the surrender fees on all your a NLG accounts.
  20. As you know, the backdoor Roth IRA process is a good way to get around the income limit to making a direct Roth IRA contribution. If the alternative is putting the 6k (or 7k if >50) into a taxable brokerage account, it's a no-brainer. But if you can use the 457b to get a fixed income of 2%, I think I'd go for that. Rolling it out to an IRA after age 59.5 would make sense. Here's a good tutorial on the backdoor Roth process: https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/
  21. I think the answer to your question depends on whether your 403b and 457b are both with low-cost vendors. If they are, even if you sure you will continue until you are 60, it might be good insurance, just in case. After age 59.5, the 457b looses its advantage over the 403b. It's usually best to roll both the 403b and 457b into an IRA after you retire after 59.5. The 457b does have an advantage over the 403b during the last 3 years before the age of "normal retirement". You can contribute double the usual amount. If that is something you might want to do, then switching your contributions to a low-cost 457b makes sense. Paying somewhat higher fees for a few years is not as damaging as it is for longer periods. Your title implies that you are considering transferring your 403b account into the 457b account. You probably know that's not possible if they are both with your current employer. I'm guessing you meant changing your contributions?
  22. What are the fees on the 457? Administration fee and fund expense ratio? Are you planning on retiring early? The backdoor Roth IRA is great but be sure you get the Form 8606 done correctly. There’s lots of guidance on the internet.
  23. I think there's a volatility drag that your averaging of the yearly rates doesn't take into consideration. A 50% loss of 100k results in a 50k balance. A subsequent 50% gain on the 50k only gets you back to 75k. If you compare the rate of return of TSM and Small cap Index over 5 and 10 years, TSM comes out a bit ahead, about 1%. As you say, the past doesn’t necessarily predict the future!
  24. Warsad, I'm guessing your wife is a teacher with Houston County school district because "Houston" was on one of the pages you supplied. If that's the case, I was not able to find what administration fee AIG was charging the district. I found mention of the AIG 403b and 457b plans, but no details, which is disappointing, although not unusual with AIG. The list of funds included some excellent Vanguard funds, including their 500 Index fund with an ER of 0.04%. I also saw VG's Total Bond Mkt Index fund and their Developed International Stock Mkt Index fund with low ERs. So the question is, what is the admin fee.
  25. The Callan Period Table of Investment Returns shows how the returns of the various asset classes varies from year to year. https://www.callan.com/research/2020-classic-periodic-table/ It makes sense to me to concentrate on the Total Stock Market fund and not bother trying to guess what will outperform it. The 3 Fund Portfolio also is very diversified and adding a small cap index fund is a bet that may or may not pay off. I’ve been investing (and retired almost) for over 30 years and don’t have one of the Lazy Portfolios, but often wish I did. Our funds are mostly index funds and I try to keep the asset classes balanced close to that of TSM (growth/value, large cap/small cap). I’ve often seen TSM, which I have a lot of, beat the return of many of my funds. I don’t think you need to factor your pension into your asset allocation. Your pension is not a certainty. Hopefully not, but it’s possible that you won’t be able or want to work for a full pension. Your pension will factor in to when it and your investments will support you in retirement. Your asset allocation should be based on years to retirement, and your risk profile. How nervous are you when the stock market drops 50%? Most of don’t know how we’ll react until we experience it, so that’s something to think about.
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