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krow36

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Everything posted by krow36

  1. 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?
  2. 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.
  3. You could transfer your 403b account with SB to a Vanguard 403b if Vanguard is on the list. What kind of account did you open at Vanguard? IRA, taxable Individual or 403b? You'll get advice here from other retired and working teachers. This website maintains a list of fee-only Certified Financial Advisors that have been checked out. It's at the top of the forum topics
  4. Because of the ongoing fees of the SB variable annuity (VA), I don't think there's a reason that is good enough to hang on to it. I would guess that you are paying at least 2% per year in fees. Every fund has an expense ratio (ER) and your VA probably has a "mortality & expense" fee of about 1%. By transferring your variable annuity to the SB NEA Direct Invest, your only fees will be the Vanguard Admiral class index fund expense ratio of about 0.05%. That's about $4,100 for the VA, and about $104 for NEA DI, every year! Do you know the surrender fee schedule? If the fee varies over the 9 years, it's probably a rolling surrender fee. That means that last year's contributions might have a 9% fee, and contributions made 8 years ago might have a 1% fee? You really need to know the total surrender fee in order to decide whether to pull the band-aid off and transfer it all, or just transfer that amount that is surrender fee free. You can call SB and ask for this info.
  5. I don't think the @ does anything on this forum, although I could be wrong. A PM generates an email on this forum, and the BH forum works the same way. A quote generates a notice in the upper right corner, but only if someone is checked in.
  6. It looks like the OP last checked in on Jan 24. Maybe you should try a Private Msg which will generate an email?
  7. Sorry I have no experience with your situation, but I'll give your thread a push. In general I would rank your retirement ahead of your child's post-grad schooling. Is your 403b plan with a low-cost vendor? Are you invested with say at least 50 to 60% in equities, so that your account is growing significantly? By withdrawing 24k, you will slow the account's growth rate won't you?
  8. Of course it's legal. Their previous 403b fee was $25 per fund per year I think, which could easily add up to more than $60. There is now no per fund set fee, just the $60/yr and each fund's low expense ratio. Their ERs are still between 5 and 10 times less expensive than the industry's average. Either fee schedule is a bargain. They have added a Roth 403b option and have Admiral class available. Granted, the $60/yr fee is a high percentage of a $10,000 account balance (0.6%), but is only 0.06% fee on a $100,000 account balance. Maybe that will help motivate you get your 403b balance up here! That's how you "can fight it".
  9. Yes, another thread!!? I'm loosing it! My apologies. I'm glad to learn about avoiding the 10% withdrawal penalty for 6 months after April 15. So the 10% penalty is because you are under 59 1/2? And the 6% is the penalty for withdrawing gains from a non-qualified Roth IRA, meaning your first Roth contribution is <5 yrs old. Is that right?
  10. If the NEA Direct Invest plan offered low-cost Vanguard target date funds, I think I would agree with whyme. However, unlike the Lincoln plan's Vanguard TR funds, NEA DI's target date funds are TR Price actively-managed funds with ERs between 0.79% and 0.97%. Suggesting them would conflict with the very low-cost index fund message. None of the links seem to work?
  11. I think you've done a great job, sticking to the essentials. Have you considered placing the "PLEASE NOTE:" after the plans? The LI PDP could include a comment: "This platform is also available for a 457 plan for no additional annual fee." I wish Dan would include an example of lower fees, at least as low as 0.09%, in the bar graph. Of course the average Vanguard fees for a 3 fund portfolio is probably about 0.06% or less? The "average index fund" fees have probably come down since the graph was made? In any case, a difference of over $200,00 should serve to get their attention. In the paragraph below the graph where you introduce the 2 plans, maybe you should mention that Vanguard index funds fees are below average, around 0.05% to 0.10%. That would tie the graph to the reason the 2 plans have outstandingly low cost. Is the LI PDP annual fee $60 or $35 in NJ? Or does it vary? Nitpickings: Make all 403b with small b. " " around the NYT article title. ". . . a rep from either these companies. . ." "The plan gives . . ."
  12. Unfortunately I think filing an extension on your 2018 return will not allow you contribute to an IRA for 2018 after April 2019. And: I was also under the impression that an extension allowed an IRA contribution so a relative I help missed out on a contribution for 2018. A contribution to their taxable account for retirement was accepted as next best.
  13. Perhaps you could slip in that having access to these two plans is the envy of countless K-12 employees in districts across the nation that have no low-cost mutual fund based option?
  14. As jebjebitz suggested he wanted, keep it short. Maybe just focus on the fact that there are 2 very low-cost providers 403b (and one 457) available. The target is teachers with variable annuities. Both the plans are somewhat hidden aren't they, especially LI's PDP. Maybe mention that expensive accounts can be transferred into a low-cost plan? I think a bar graph illustrating cost over time is necessary! As Steve suggested, anything more is too difficult and complex for a short letter.
  15. First thoughts: Is your audience the 70% who do not have a 403b? Or is it the 25%-30% who have annuity-based, expensive 403b plans? Maybe you should focus on the latter? And of those, focus on those with a variable annuity, not those with a fixed annuity? How about starting out something like: Your national union, the NEA, has developed a super low-cost 403b plan based on Vanguard index funds. It’s the Security Benefit NEA Direct Invest 403b. Why would they do that? They realized that there was a need for a low-cost 403b for K-12 employees. This plan is available in districts where Security Benefit is on the 403b vendor list. Meanwhile, your state union, the NJEA, has arranged for a super low-cost 403b and 457 plan, also based on Vanguard index funds. It’s the Lincoln Investment Group Participant Directed Platform (PDP). This plan is available in NJ districts where Lincoln Investment is on the 403b (and 457) vendor list. In my experience, I get folks’ attention when I show them the large amount of money they are paying in fees, compared to the much smaller amount they would pay at low-cost plan. I think an example is needed, for example, comparing an AXA fund with total fees of say 2%, with a Vanguard fund with a fee of 0.04%. For a $10,000 account, that’s $200 vs $4 in fees per year. For a $100,000, that’s $2000 vs $40 in fees per year. A bar graph is very eye-catching way to illustrate the difference. Maybe use an estimate of the average 403b account balance, and calculate the fees over 5, 10 and 20 years? (The annual account maintenance fee of $35 for NEA Direct Invest for balances under $50,000, and $60 for the PDP are relatively insignificant compared to the fees based on a percentage of the fund’s balance.) I think you can avoid the use of terms like “expense ratio” and others that most teachers are not familiar with, by just sticking to terms like cost, fees, percent and $$$. Make it as simple as possible. Maybe a second letter describing the 2 plans in more detail would be allowed by the union? Or you could provide links to threads on this forum? Trying to convince teachers to invest in a 403b(7) plan that uses the stock and bond index funds, rather than contribute to a fixed annuity, is maybe a discussion best left out of this letter? It seems most teachers prefer the fixed annuity, and we'd like to change that, but that is a complex challenge.
  16. I just occurred to me that you want to do a backdoor Roth IRA (because of your high MAGI) and your tIRA would result in a pro rata tax problem? If that is the reason you want to convert your tIRA to a Roth IRA, have you considered rolling your tIRA into your 403b plan? You would want the 403b plan to be low-cost. (Vanguard does not allow rollovers into their 403b plan.)
  17. I think Ed answered your question. There is an employee contribution limit to employer based retirement 403b plan. For 2019 it's 19k if you are under 50, 25k if you are over 50. The limit applies to any combination of traditional and Roth contributions to your 403b. There is an income limit to contribute directly to a Roth IRA, based on your modified adjusted gross income (MAGI). As Ed mentioned there is no IRS limit if you want to convert a Traditional IRA to a Roth IRA. The conversion will add to your taxable income. It might make sense to wait on conversions until your income tax bracket is lower, say in retirement before you start social security? Or during a year between jobs? But the IRS is always willing to have you pay the tax on the conversion now.
  18. At the bottom of page 1 of original thread by A440 on the LI PCP, see the posts by HAWK23 from “the Chicago area”. https://www.bogleheads.org/forum/viewtopic.php?f=1&t=175295 Good Luck!
  19. It looks like IL will get a state-run 457 plan in the near future, according to this newspaper article. You will probably learn about its details before we do. Please send us a link to any article on it you come across. Teachers who are part of either the Tier 1 or the Tier 2 pension plans can enroll, although Martwick acknowledged it will most appeal to teachers in the Tier 2 plan that has far less generous benefits. But it’s going to be a while before the new program is available. TRS spokesman Dave Urbanek said it won’t be available before June 30, 2019, the end of the current fiscal year. https://www.sj-r.com/news/20180915/teachers-will-get-new-retirement-savings-plan-eventually The forum discussion of this article is here:
  20. You may have lucked out with the Lincoln Investment Participant Direct Platform! There is at least one Chicago area district that is allowed to use it, but you will have to call to see if your district is allowed. The annual fee is either $35 or $65--it seems to vary. You should call a Lincoln Investment regional office to ask for permission. They are the only source of the application form, which states the rules for the plan. They will email you a link to the application form if they allow your district to use it. A local LI rep can't give you permission but would be able to give you the number to call. You can read about the plan in this thread from last year. https://board.403bwise.com/topic/6780-lincoln-investments-participant-direct/ There is nothing on the internet about this option, except on this forum and on the bogglehead.com forum. Lincoln Investment obviously wants to control its use. I have a link to an out of date form and will send it to you if you send me your email address in a Private Message.
  21. None of those 5 vendors are a slam dunk like Vanguard, Fidelity and Security Benefit (only their NEA Direct Invest) would be. However, if you are teaching in NJ, Lincoln Investment has an excellent low-cost 403b and 457 plan that you could use. It's also available in a few districts in NY and near Chicago. VALIC, and VOYA Financial may offer mutual fund based 403b(7) plans in addition to their very expensive annuity based 403b plans. You would have to talk to each of them and study their admin fees as well as the expense ratios of their mutual funds. Please do not let them sign you up to an annuity 403b!! Lincoln Investment does offer a mutual fund based 403b(7) plan that they call their Retirement Solutions Premier. It has a Management/Wrap fee of 1.25% but does offer many low-cost Vanguard Investor class funds. So this is far from ideal, and getting Vanguard or Fidelity added to the vendor list would be the way to go and worth the effort! Many states have a very low-cost state-run 457 plan that is available to school district employees. Teachers can contribute to both a 403b and a 457 plan (a maximum of 19k to each). What state are you teaching in? Does your district have a 457 vendor list? It’s possible that a state 457 plan would be all you need until later in your career?
  22. I think you've got it figured out--nice job! I've used the 0% cap gains rate and Tax Gain Harvesting to do rebalancing out of some "legacy" funds in our taxable account. Because we have pensions, social security and RMDs, we're in the 12% income tax bracket, 6% effective rate.
  23. I wonder if leaving copies of one or more of the NY Times 403b articles in the Teacher's "Lounge" might snag some interest? You know, where teachers pass some time during their non-teaching periods? Maybe chatting or drinking coffee? I retired 27 years ago so I'm out of touch.
  24. I didn’t answer your question did I? Morningstar says that the Growth of 10K graph does not take loads into consideration. I couldn't find anything about whether the Growth of 10K table in the Performance section used loads or not. I think it's highly likely that loads are not used there either. http://www.morningstar.com/InvGlossary/growth_of_10000_definition_what_is.aspx “The returns used in the graph are not load-adjusted.” I'm impressed with the Vanguard tool for comparing the costs of 2 funds. You can control the inputs, loads included. It tells you the percentage of outperformance needed by the higher cost fund in order for it to equal the performance of the lower cost fund. And you can compare the result over time using a load or not.
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