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krow36

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Posts posted by krow36


  1. I can't answer questions about the fees that JC pays. After looking at IPX on 403bcompare (sited above), I would stick with Vanguard and skip Fidelity. The difference in expense ratios of their index funds is minor. I'm assuming you are going to use index funds? A difference of 0.02% on 300k is only $60.  

    Third party administrators like OMNI charge for each district employee that has an 403b account. Somebody has to pay the fee. The expensive vendors agree to pick up the tab because they make a lot of profit on their products. Most districts don't want to pay the fee and are happy to have it taken care of by the vendors. The district's are oblivious as to the high fees that their employees are charged.The low-cost vendors like Vanguard and Fidelity won't usually pay the fee. Vanguard and OMNI have recently worked out an agreement to have Vanguard collect the TPA fee from the employee and send it to OMNI. I don't know how IPX is handling the TPA fee.


  2. OR state 457b plan:    https://my.voya.com/einfo/fundinfo.aspx?page=investment_informationfundperformance&cl=oregon&pl=350001PU&domain=osgp.voya.com

    The Fidelity 457b is incredibly low-cost, assuming you use their index funds. (Their fees are probably so low because they hope you will use some of their expensive funds?)

    Their funds and fees are the same for their 403b and their 457b. The only administration fee is $24/yr.  https://www.403bcompare.com/products/68#/investmentoptions

    The OR state 457b has an admin fee of 0.17%. That’s certainly not prohibitive, but I don't think anybody beats Fidelity’s 457b fees. The OSGP fund’s expense ratios vary from very low cost to modest. https://www.oregon.gov/pers/OSGP/Documents/Fee-Structure.pdf

    I don’t know of a reason for working to add the OR state 457b to your district's list.


  3. From reports, they seem to have been somewhat slow in getting the account set up. I'd wait about 2 weeks before calling, but who knows, maybe they've improved their service? Maybe you will be pleasantly surprised? Some posters have had some difficulty getting the district to give them the plan number for Security Benefit's form, but that's something the district has to sort out.


  4. Bashdash, thanks for the testimonial on NEA Direct Invest! Here's my spiel on NEA Direct Invest:

    The only low-cost vendor on your vendor list appears to be Security Benefit’s NEA Direct Invest. It is internet based, not local rep based. It is a SB 403b and NEA has no direct involvement. There is no local rep (salesperson) to ask about it. It offers a small number of low-cost Vanguard index funds and charges only $35 per year for balances under 50k, no admin fee for balances over 50k. Its phone service has been reported as poor at times. With patience and perseverance, you can get the job done. We can help with any questions.

    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 0.99%).

    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:

    Read over Step 1.

    Your district will likely require their own Salary Reduction Agreement. Hold off on giving this to your district.

    Hold off on moving other accounts into this 403b until this account is established.

    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.

    After about 2 weeks, call if they haven’t contacted you, and inquire about your account’s progress.

      6. After the account is set up and you have internet access to it, you can work on moving your wife's Ameriprise balance to NEA Direct Invest.


  5. Yes, she can move her Ameriprise 403b balance to Vanguard if Vanguard is on the district's 403b vendor list. It's called a contract exchange. Call the Ameriprise 800 help # and ask for their transfer form. Also ask for her surrender fee if she has a variable annuity, which is likely. The annuity probably has an M&E fee of 1.10% and the surrender fee runs for 10 years, starting at 8%, decreasing to 1%. Ugly! You can look up the fees at 403bcompare:                          https://www.403bcompare.com/products/145 


  6. 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!


  7. 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. 


  8. 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.


  9. On 4/13/2021 at 10:25 AM, taylor2016 said:

     

    Isn't it true that when I inherited the 403(b) and it rolled over into an IRA it should have been an inherited IRA and I would not be charged the extra 10% for early distribution?  I didn't think it was even allowed to rollover an inherited 403(b) into my own IRA account instead of an inherited IRA.

     

    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. 5 hours ago, Pmolsonmus said:

    Hi,

    My wife and I are both retired teachers on pensions.  We took a 403b withdrawal in January for home improvements. I was working FT in a non teaching situation but have been furloughed since April and receiving unemployment.  With the newly passed bill, we are about 2k over the 150,000 limit to have taxes waived on the first 10,200 of unemployment.  Do we have any options to lower our adjusted gross income by the 2k? The difference is almost $3,000 out of pocket.

    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. 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? 

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