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Everything posted by krow36

  1. krow36

    403b - 457

    IRS regulations of 403b plans do not allow investing in individual stocks. You’ll have to lobby Congress if you want to change that.
  2. Fidelity has a low-cost target retirement fund that is index-based called Fidelity Freedom Index Fund that is available for her Roth IRA. Amelia's current Freedom fund uses actively-managed funds to make up the Freedom fund. Amelia, Security Benefit's NEA Direct Invest is certainly the lowest cost 403b option she has. I didn't mention it because its service has been reported as sometimes unhelpful. However, if you are willing to be persistent and keep at it, with our help if you need it, you can get a very low-cost 403b using just 3 Vanguard Admiral class funds. If you Google the plan name, you will find a number of threads from several forums including this one.
  3. Amelia, welcome to the forum. Aspire is can be self-directed, without using an advisor. Just write "I wish to self-direct" in the space for the advisor's name on the application form. Have you checked out Aspire's FAQ? There's good information there. Have you found the application form? You'll also need to fill out a Salary Reduction form from your district's Third Party Administrator (TPA). You can use either Fidelity or Vanguard funds with an Aspire 403b.
  4. I don't think there is usually a fee to transfer funds within any account. The exception would be if the fund had a rear-end load. These are called class B or C I think, and the load is applied for a year or more after buying.
  5. Transaction fees are caused by buying and selling in a brokerage account. Unless you are using a Self-directed brokerage account within your Valic 457 account, there should not be any transaction fees. As Ed mentioned, a Total Stock Market Index fund is more diversified than 500 Index fund which holds about 80% of TSM fund.
  6. I think Scott's statement that I bolded covers it. It means that you can change providers within a 403b, or within a 401k. But if the plans are different types with the current employer, you cannot move a plan balance into a different plan type. So, no 403b -> 401k or visa versa, and that goes for other plan types. If the plan is with a previous employer, it can be allowed by the plans.
  7. Tony I emailed Scott D and he replied: I bolded what holds if the plan types are both with the current employer. So it's clear that tormand should pursue the transfer of his Valic 403b balance to a TIAA 403b during the next open period. For those readers who aren't familiar with ScottyD, his user name on this forum, Scott Dauenhauer is a Certified Financial Planner and long-time advocate for better 403b plans. He is Dan Otter's partner in their 403bwise podcasts: https://teachandretirerich.libsyn.com/page/1/size/25 Dan and Scott are the administrators of the FaceBook 403b Group:
  8. Yes, it IS confusing, and I have searched repeatedly over the years for IRS information on this question. Without luck! That IRS rollover chart would seem to say 403b to 457b is allowed if the 457b plan will put the 493b in a “separate account” within the 457b. However posters have confirmed that the 403b must be with a prior employer. So the IRS chart is incomplete on that detail, probably because in the for-profit world, an employer would not offer 2 different plan types?? Maybe you are right and it’s not an IRS rule but the employer’s 457b plan rule? This IRS publication discusses 403b to 403b contract exchanges within an employer’s plan, but there is no mention of exchanges between a 403b plan and a non-403b plan, both with the current employer. https://www.irs.gov/publications/p571#en_US_202001_publink1000239748 I’m going to ask Scott D about this because it comes up frequently doesn’t it?
  9. It's great that you got the 401a shifted from Valic to TIAA during the open period. The Valic 403b can't be shifted to anything other another 403b plan as long as she is with the same employer. Those are IRS rules. I think you should talk to TIAA and ask if you can transfer her Valic 403b balance to their 403b. You might have to wait until the open period if the Valic 403b is part of ORP. https://peba.sc.gov/state-orp-enrollment
  10. This thread started by GSCalifornia is 3 years old, but you are certainly welcome to add to it with your own questions (or start a new thread?). If you send a personal message to GSCalifornia, it will generate an email to them, and they may respond to your query. I have no doubt that the transfer was completed, and that there was the surrender fee, and probably an account closing fee.
  11. Roughly, if your employer says your basic income (before taxes) is 70k/yr, and you contribute 30k to tax-deferred accounts (traditional IRA, 403b or 457), then your Adjusted Gross Income (AGI) would be 40k. Your Taxable Income is your AGI minus your Standard Deduction (12.5k). So your taxable income would be 27.5k, which is towards the bottom of the 12% income tax bracket. Check your Form 1040 to see your Taxable Income. Tax deferred accounts are pre-tax because you won't pay the income tax on the money you put in them until you take a distribution in retirement. They reduce your taxable income for the year of contribution. Roth accounts and taxable brokerage accounts are post-tax because the money you put in them is taxed (or will be at tax time). They do not reduce you taxable income. It's very desirable to be in the 12% income tax bracket if you have a significant taxable (brokerage) account. Dividends and capital gain distributions are taxed at 0% in the 12% bracket and at 15% in the 22% bracket. It's not a big deal if your income edges into the next higher bracket, but you should be aware that 22% is almost double 12%. Only the income above the top of the 12% bracket is taxed at 22%.
  12. krow36


    I assume you know that the age for starting RMDs has changed from 70.5 to 72? This is from a Fidelity site: Do I have to take my RMD if I'm still working? Yes, even if you continue working past age 72,* you have to take an RMD from your IRA. However, you may qualify for an exception from taking RMDs from your current employer-sponsored retirement account, such as a 401(k), 403(b), or small-business account, if: You're still working You do NOT own more than 5% of the business you work for You have an employer-sponsored retirement account with the business you work for If you meet all the criteria above, you may delay taking an RMD from the account until April 1 of the year after you retire. Keep in mind that this does not apply to IRAs or other accounts you may hold with companies you no longer work for. https://www.fidelity.com/retirement-ira/required-minimum-distribution-faq
  13. I think 50% in the Fixed Income Option is way too much for someone age 36. Is your 457 plan also with VALIC, with no other vendor choice? I know GA has a state 457 plan but can't remember if it is open to teachers. I'm afraid it is not. I would go ahead and get rid of the advisor and that fee, and change to 100% VINIX for the time being. There shouldn't be any surrender fee to change your funds within the account. If the district improves their plan in the future by adding a low-cost bond index fund, you can make changes. You might push for it?
  14. There’s an annual administration fee of 0.21%. http://publish.gwinnett.k12.ga.us/gcps/wcm/connect/4ce75fac-bf7c-4af5-8655-ea985b2bede9/Announcing+Changes+to+RSP+effective+04+05+2018.pdf?MOD=AJPERES I agree with Tony that you should stick with the S&P 500 Index fund (Vanguard Institutional Index Inst VINIX). It covers about 80% of the total US stock market, and its rate of return has been almost the same as that of the Total Stock Market Index fund. If you are young (in your 20’s?) then you can justify having only 10 or 20% in bonds. Maybe use the Fixed Interest Option for you bonds allocation if you want? Or go 100% VINIX as Tony suggested. I don’t think VALIC is giving your district a very good deal. There should be at least a low-cost bond fund in addition to VINIX!
  15. I think Heather is referring to waiting until age 62 before drawing from her NY pension? Heather, I wonder if the NY pension balance is receiving any increase, while you wait until you're 62? I hope so, because inflation will decrease its purchasing power.
  16. The American Funds American Balanced fund class C (BALCX) is an expensive fund, as you've noticed. It’s expense ratio is 1.33% and it has a load of 1%. The load and high ER are providing the “advisor” with compensation. If you moved your rollover IRA to Vanguard, you will pay no load on any fund, and ERs will be 0.04% to 0.10%. The big advantage of an IRA is that YOU get to pick the vendor, unlike with employment accounts like a 403b or 457b where your employer restricts your choice of a vendor. There’s no reason you should be paying class C loads and ERs! I don't think that it's a good idea to have cash in your IRA.
  17. The Performance Results for the funds in VALIC’s plan for County of Henrico PS 403b: https://my.valic.com/ARO/FundPerformance/FundPerformanceFluent.aspx?q=H1W7wtchY+37B09bn5trVLKC9QjUHoaO2yMAQOjzlmtn9F2unQh5WPGnl8bVV3QwtwxmOzyX7ynDQLcpmDyelw== Notice that near the bottom they give the administration fee: This is a very reasonable admin fee, and I think your district has done an excellent job of organizing their 403b and 457b plans!
  18. Very nice summary Ed! I agree that only the 3 funds are needed, 4 if you want to include small caps. The S&P 500 Index fund (VINIX) is a very good substitute for a Total Stock Market Index fund.
  19. krow36


    Sorry I misspelled Alan’s user name. It’s “Alan S.”
  20. krow36


    I don't understand what happened to your 403b and 457 accounts. Are you trying to make contributions for the year(s?) during which you were unemployed? I agree with Ed that employee contributions cannot be made for years when you were not employed. If you want a definitive answer, you should explain your problem on the Boglehead forum. Posters Spirit Rider and Allan S. are experts on IRS regulations concerning 403b and 457b plans. I believe you'll find that neither 403b nor 457b public school district plans are governed by ERISA.
  21. Your comment about starting next week made me wonder if you realized that setting up an Aspire account is an online exercise and does not involve a conversation with Aspire? Their FAQ will answer most questions you might have. You can find the Application form and Contract at https://www.aspireonline.com/docs/default-source/form-library/403(b)(7)-application-and-agreement.pdf?sfvrsn=44 Be sure to choose the “self-direct” option and avoid the 0.6% fee of an advisor. You can choose any of the mutual funds on Vanguard’s list, but all you need is a Target Retirement fund, or the 3 basic total market funds (Total Stock Mkt Index, Total Int’l Stock Mkt Index and Total Bond Mkt Index). https://www.aspireonline.com/plan-types/403(b)-plan/fund-search If you go with the 3 Fund Portfolio, ask here on the forum if you want to discuss the relative percentages.
  22. Your district should have a list of 457 vendors that you can use. Check and see if the NY state 457 plan is on the list. If it is, check the internet for the application form. If it is not on the district's list, it should be. Try calling the state plan and ask them to help getting the plan set up for your district. https://www.nysdcp.com/iApp/tcm/nysdcp/support/index.jsp I would establish the Aspire 403b plan and then transfer your Ameriprise balance to it. In the meantime, I would establish the NY state 457 plan, contribute, and max it if possible. Then if you can, go ahead and contribute to the 403b plan.
  23. Welcome to the forum, Billy! I agree with Ed and Tony! Aspire is an excellent vendor for you and a good place to move your Ameriprise 403b balance. The NY state 457 plan is very low-cost (lower than Aspire) and a good place to put your further contributions.
  24. This Boglehead Wiki page discusses ways of thinking about your portfolio’s percentage of bonds, and lots of other related topics. https://www.bogleheads.org/wiki/Bogleheads®_investment_philosophy Ed is convinced that he can weather any stock downturn without giving in and selling (low). And he probably can. He’s an unusually rational guy, and has admitted that he may have some Asperger’s qualities to his personality. That can be a great asset. Most advisors, professional as well as amateurs like us here, recommend SOME percentage of bonds in one’s portfolio. As mentioned in the BH philosophy, there are many factors that might justify an ability for a higher percentage of stocks. A couple might have 1 or 2 pensions, might both have social security, might expect an inheritance, . . . . . There may not be a need to take more risk with more stock. And the emotional stress that results when there’s a big market drop may mean that there is no desire to experience a portfolio drop of say 50%. For a couple with 20 years until expected retirement, I think your asset allocation of 75/25 is very reasonable. In 10 years you might pull back to 60/40? There are no hard and fast rules for this stuff!? If you are two teachers with good pensions, you have a lot of options, including possibly early retirement.
  25. FINRA, the Financial Industry Regulatory Authority, has issued a warning on equity index annuities, which I think is what you are being offered. They are very complicated, and hard to understand. They pay a very high commission to the insurance reps that sell them. They are misleading in claiming to protect against a stock market downturn. They do not provide the full upside of the market. These annuities have the worst reputation on 403bwise of all the various types of annuities. Please stay with the investments you are using (403b, Roth IRA, CDs). Hopefully the 403b is a custodial account and not an annuity. I agree with Tony—don’t combine your investments and insurance products. https://www.finra.org/sites/default/files/InvestorDocument/p125847.pdf
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