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EdLaFave

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  1. Thanks Tony. I got a little distracted with life and realized I hadn't checked the boards in months!
  2. Just adding to what krow said, you should figure out what 457b options you have available to you. Perhaps you'll have luck there.
  3. If your 403b and 457b are Traditional (i.e. not Roth) then it will reduce your taxable income. I can't speak directly to how the dependent care credit includes (or doesn't include) that deduction in it's income limit.
  4. Security Benefit's NEA DirectInvest is an elite 403b plan that lets you build a fully diversified portfolio with rock bottom fees. I documented their plan here. The self-directed variant of Aspire is worth using, but is clearly a step down. I documented their plan here.
  5. I don't see a moral conundrum. You got the district to add low cost plans in addition to Security Benefit's already low cost NEA DirectInvest. There's nothing wrong with continuing to use the low cost plan you are already enrolled in. I faced this exact same choice and went with option #2, while simultaneously suggesting to folks that they go for the newly added plans because they won't encounter a sales rep that tries to take advantage of them as they may when using Security Benefit.
  6. That's great. I'm really happy to have been helpful. I just want to make sure we aren't having a miscommunication. It is common for people to use the word Roth when what they're actually referring to is an IRA (which can be either Roth or Traditional). Yes, if your tax bracket was artificially low then the desirability of a using a Roth increases, similarly a Traditional becomes more desirable when your rejoin your larger tax bracket. Provided capital gains aren't prohibitively large, I generally support selling taxable shares to fund living expenses while temporarily increasing contributions to tax advantaged accounts. At the very least dividends can be used to carry out this maneuver without impacting your taxes at all. I'll trust your math on the EITC, but maximizing tax credits is generally a great idea. I think the Roth vs Traditional is an optimization that is significantly less important than making sure you're earning as much as you can, saving as much as you can, maximizing tax advantaged accounts, owning enough bonds to prevent behavioral mistakes or poor mental health, and investing in a low cost diversified portfolio. Having said that we can't know what is optimal because it requires information from the future, but you are correctly identifying situations that increase the desirability of a Traditional vs Roth. If it were me, I'd max out my IRA and my wife's IRA before contributing to employer accounts (although that's a moot point if you're going to shift a god chunk of money from taxable to tax advantaged accounts). However, because Security Benefit's NEA DirectInvest is such a great plan, this is just another low level detail. You're going to do great.
  7. Well Security Benefit's NEA DirectInvest is certainly the best plan in your 403b list. I wrote a page to document that plan's fees and how to build a fully diversified portfolio. With respect to whether or not you've made the right decision, I'd need to know how much you're investing every year: If you're investing less than or equal to the IRA maximum then I see no reason to use the 403b at all. The IRA will give you slightly lower costs, but most importantly it is completely in your control rather than in your employer's control. If you're investing more than the IRA maximum then using the 403b in addition to the IRA is the ideal move. If you're investing more than the IRA maximum and 403b maximum then you need to push for access to a 457b. The other thing to consider is that Security Benefit's NEA DirectInvest only comes in the Traditional variant. An IRA on the other hand comes in both Traditional and Roth variants. I argue strongly that most people are better off using Traditional, but the answer to this question can't be known until the game is over. Since you seem to have a Roth preference, I figured I'd point that out. Yes, you can push to have your employer add a 457b. You can also push to have your employer add Vanguard and Fidelity.
  8. That may be true, but you may be surprised. List the approved 403b vendors and the approved 457b vendors. If you don't have that information then tell us what district you're in and together we can try to track the information down. I want to make sure you understand the different types of accounts. At the highest level you have taxable accounts and tax advantaged accounts. As the names imply, the former doesn't give you tax breaks and the latter does. Within the tax advantaged accounts umbrella you have accounts that are associated with an employer (403b, 457b, 401k, etc.) and accounts like an IRA that are not associated with an employer. Tax advantaged accounts, whether associated with an employer or not, often come in two varieties: Traditional and Roth. This specifies exactly how the tax break is applied, but I won't get into the details of that. Within all of these accounts you can buy specific investments. Now more to the point for your specific situation... When an employer offers a 403b, 457b, 401k, etc. you have to keep your money in that account. If your employer has multiple vendors for these accounts then you're allowed to transfer the money between vendors (fees may apply), but you cannot transfer the money to an IRA. Some important questions: How much are you investing per year? How long do you intend to work for your district? After answering those questions your course of action should be to enumerate all of the vendors your district has approved and then we can give additional input.
  9. Interesting because with my relatively small sample set, I've never heard of Fidelity telling that to anybody. I wonder if somehow the two are connected.
  10. Here's a link that explains the fees, how to build a fully diversified portfolio, and the steps I went through to enroll. Wow, if I'm reading this correctly, that is an unbelievable plan (I must have forgot about that). Only a flat fee of $30.50 per year and expense ratios like these: S&P 500 (domestic stock): 0.01% MSCI ACWI ex-US (international stock): 0.06% Bloomberg Barclays US Aggregate Bond (bonds): 0.03% That's incredible. I encourage that. Think about getting Vanguard and Fidelity added as well.
  11. When we start to talk about emotions and psychology, I'm not saying there is a right or wrong. However, I'd more easily relate to the emotional drive to rid yourself of a mortgage if it meant that no matter what happened your housing would be taken care of for life, but property taxes and all the rest make that impossible.
  12. I'm confused. I thought we were talking about whether to carry a mortgage as opposed to whether to live somewhere?
  13. I'd maybe talk to somebody else at Fidelity. They never once told me about such a requirement. Of course OCPS (FL) is a large district. Still, it is common place for people in this industry to say incorrect things with absolute confidence. Also, I know you have an eye toward Fidelity, but don't forget about Vanguard. They'd be a huge benefit to your fellow coworkers.
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