Jump to content


  • Content Count

  • Joined

  • Last visited

Posts posted by EdLaFave

  1. 29 minutes ago, NYAdmin said:

    Can I just go to any financial institution to do this (example, I have an existing account with Schwab) or is using a company such as Vanguard easier?

    You can basically use any institution you want. I have an all Vanguard portfolio so I opened mine with Vanguard. I believe some institutions charge fees if you buy another institution’s funds through them (again, not something I’ve had to deal with). The bogleheads have documented how to build a three fund portfolio with funds from various institutions.

    34 minutes ago, NYAdmin said:

    am wondering about your statement that the Three Fund Index takes hours per year to manage. I think I'd go with 50% Total Stock, 25% Total International and 25% Bond.  What is there to manage? Can't I just declare my funds, then let the sit? 

    So the reason it takes a few hours per year to manage is because you need to keep those funds in the right proportion to each other. When your portfolio is small this means putting new money into the funds that are “low” and when your portfolio is large it means occasionally selling what you have too much or to buy what you have too little of. If you wanted to literally do nothing then a target date fund or a fixed allocation fund like Vanguard’s life strategy fund will handle that for you.


    39 minutes ago, NYAdmin said:

    Also, it looks like my husband also has a percentage money from his 401K invested in Vanguard's Total Bond and Total International as well as a bunch of other Vanguard Funds. Is it not wise to both have money going into the same fund?

    Please read my blog post on investing in a marriage that hopefully will last, but may not. I wrote that before I got divorced and I’m happy it is something we considered.

    To answer your question directly, owning a fund in multiple accounts is fine, owning a fund in a single account is fine. That isn’t what matters.

    Let’s assume you won’t get divorced. You and your husband should decide on an asset allocation that works best for you two. You should view your entire portfolio as the summation of each account and buy funds in each account based on how cheap it is. Suppose everything in your husband’s 401k is expensive except bonds, you’d want to keep your bonds there (as much as possible), which would mean your other accounts would have to be more stock heavy in order to reach your overall desired asset allocation.

    ...if your husband has a bunch of funds that either means he is betting on specific sectors/asset classes, which I wouldn’t do, or his account is needlessly complicated, which I also wouldn’t do. It isn’t a huge sin, but it is something to consider. 

  2. To answer your question, yes, this is legal. Your employer can select and/or replace whatever vendor they want for a 403b. The same way they can swap out your insurance company every year. It is an employer sponsored plan; they’re in control. I suppose it is conceivable that a state or local government might voluntarily put restrictions on exactly how and if this is done, but that’s an area I can’t speak to.

    Your post was very short on details...

    100% vesting for what? Employer match to your 403b? Pension? What?

    What was the vesting schedule?

    What do you mean they “dropped” your 403b vendor? They stopped new participants from using it? They stopped existing participants from continuing to use it? They forced existing participants to roll the account over to another vendor? What?

    Your post gives the impression that you worked at this job for a long time after the 403b was “dropped”. So what was happening to the contributions you were presumably making? Did they just stop? Did you not notice? Did they get diverted to another 403b? What?

  3. On 7/10/2019 at 2:05 PM, 403wtf said:

    My wife is a teacher and was contributing to a 403(B) through AXA Advisors

    Sorry to hear that.

    On 7/10/2019 at 2:05 PM, 403wtf said:

    We contacted AXA and the representative is adamant we cannot rollover/convert the 403(B) to an IRA without a qualifying event. She could not give me an example of what this was. I'm afraid she is thinking we are trying to take an early distribution based on the verbiage she used. Does anyone know what she might be referencing? I can't find anything on the IRS website or ERISA that states we cannot convert these funds. Additionally, my wife changed school districts in 2017 and the fund was transferred to the new school district as the employer - I know you can't transfer funds if you are still employed by the same employer but are we able to take the funds contributed (plus earnings) from her first job and rollover to an IRA?

    Let me make sure I understand. Your wife worked at District A and contributed to a 403b. She left District A for District B and rolled over the 403b to District B's 403b and now she is contributing new money to District B's 403b. Is that right?

    Let's start with new contributions made to District B's 403b...I'm 100% sure you're not going to be able to roll that over to an IRA until a qualifying event happens (probably quitting or being fired).

    The rolled over funds may be a bit more complicated. I'd be willing to bet that it will be treated no differently than the new contributions, but I don't know that for an absolute fact. My current 401k (very different from the 403b world) allows me to roll money into the 401k and then roll it back out whenever I want. I suppose it is conceivable that some 403bs may allow the same thing, but I'm skeptical. You'll have to reach out to the vendor and/or read all of the fine print to know for sure. It's too bad you missed the opportunity to rollover the 403b from District A to an IRA after quitting, that would have been allowable.

    Finally, do you have a better vendor available in District B? You can roll EVERYTHING over to the better vendor if one is available.

  4. There are actually two companies named Lincoln and one of them offers a Participant Directed Plan (PDP) in limited areas of the country. Search the forms to find out if it's Lincoln Investment that offers the PDP plan (I think it is) and figure out if you have access to it. This thread may be a good starting point, I'll leave the homework up to you.

    If not, then ASPire is the best option on the list. I documented their plan here. It isn't as good as Vanguard or Fidelity, but it is reasonable enough, definitely worth using.

    I was able to get Vanguard and Fidelity added to my district's list of approved vendors and I'm happy to help you do it. Somebody recently asked me for general advice on the Bogleheads site and this is what I had to say. Reach out to me if you need help or insight to get the job done. You can do it.

    The other thing to consider is that some states have state sponsored 457b plans (for example, NY has a pretty good one). It is possible that is the best option. Either way, you're in good shape with ASPire being the "floor" of your options.

  5. Is there a reason you're asking what district is the "gold standard" as opposed to what a "gold standard" would look like?

    I certainly haven't reviewed every district in the nation, so I can't award a "gold standard". However, I can tell you what I would do if I were given complete control over a district:

    1. I'd have exactly one vendor for the 403b and one vendor for the 457b...neither would have agents.
    2. That vendor would offered fixed allocation funds (Vanguard LifeStrategy), target date funds, total domestic stock fund, total international stock fund, and a total bond fund. That's it.
    3. Every employee would be automatically enrolled, they'd have a "reasonable" percentage of their salary allocated towards it, and they'd be invested in a target date fund based on their age.
    4. Every employee would be able to override this automatic enrollment.
    5. My Retirement Services department would offer information very similar to what I've posted on my Investing 101 page.

    That is the gold standard, but I'm not aware of any districts that have implemented it.

  6. On 7/17/2019 at 9:06 PM, NYAdmin said:

    it looks like Vanguard is the recommended company??

    I'm not sure how to break the tie between Vanguard and Fidelity. I'll let you decide.

    Vanguard is documented here.

    Fidelity is documented here.

    On 7/17/2019 at 9:06 PM, NYAdmin said:

    recommendations are to roll that over into a traditional IRA and start a new 403B with my new company

    There may be corner cases where that is sub-optimal, but generally that is the right decision because you have total control over an IRA, whereas a 403b is up to the whims of your employer.

    On 7/17/2019 at 9:06 PM, NYAdmin said:

    1. What is the best thing to do with the 200+ Grand?

    I don't understand the question. I assume you're asking what type of account you should move your 200k (from an old employer's 403b) to? I think you've already answered your own question.

    On 7/17/2019 at 9:06 PM, NYAdmin said:

    2. Which investment company is the most recommended for the new 403B?

    Vanguard or Fidelity, pick what feels good to you.

    On 7/17/2019 at 9:06 PM, NYAdmin said:

    3. Is it possible to split the max contribution into both Roth and 403B? I'm aiming for $19,000.  (Combined married income is over 200 Grand, so I read somewhere I can't do that?)

    It is very common to use the word "Roth" as if it fully describes an account. It does not. Tax advantaged accounts (401k, 403b, 457b, IRA, etc.) come in two variants: Roth and Traditional. Please ask questions if you don't understand that. I assume you're asking if half of your 403b contribution can be Traditional and half can be Roth...yes that is allowable. Is it advisable? Well, you haven't provided enough information to say...again ask questions if that's what you're getting at.

    IRAs have income contribution limits whereas other tax advantaged accounts (401k, 403b, 457b) do not. Some people make too much to directly contribute to a Roth IRA. However, Congress wrote the law in a fairly ridiculous way that allows those folks to contribute to a Roth IRA indirectly through something that has come to be known as a "backdoor Roth contribution".

    On 7/17/2019 at 9:06 PM, NYAdmin said:

    4. If Vanguard is the preferred way, which funds are recommended with my profile?  

    You haven't told us much about you, so I can't answer that really. I think you're going to want to read my Investing 101 page.

    Your main decision is to decide what percentage of your portfolio should be in bonds. I personally do that by recognizing that stocks can drop by 50% fairly quickly and take many years to recover...then I ask myself how much of my portfolio I can financially and emotionally afford to lose. If you would do something foolish like selling stocks during a crash if you lost 50% of your portfolio then guess what, you can't handle a 100% stock portfolio. If you can only handle losing 25% of your portfolio then you need a 50% stock and 50% bond portfolio.

    Once you know what stock/bond split is appropriate for you (something only you can answer, by the way). Then picking the funds is easy. If you want to save a little bit of cash in fees then you invest in what's known as the 3 Fund Portfolio...if you don't mind paying a little extra to not have to manage anything at all (3 fund portfolio takes hours per year to manage) then you can go with an all-in-one fund (fixed allocation or target date).

    In the Vanguard/Fidelity links I gave you, I point out the funds to use. In the Investing 101 link I gave you, I describe all of this in detail. Ask questions.

    ...all my comments are in regard to your entire portfolio as a whole. Each account does not have to be a stand-alone portfolio if you will. Ask questions.

    On 7/17/2019 at 9:06 PM, NYAdmin said:

    5.  If the Traditional IRA is recommend for the old money, does anyone have specific fund recommendations?

    Very generally speaking, it doesn't matter what account type you have, my fund recommendations will be the same.

    However, bond funds in a taxable account can generate "large" tax bills (especially for somebody in a high tax bracket). I'd also like to put my highest performing assets in the account that is guaranteed to never be taxed (Roth accounts) so I'd avoid putting bonds in those accounts (Roth).

    So there are exceptions to the rules, but I can't give comprehensive input because you haven't laid out your entire financial situation.

    On 7/17/2019 at 9:06 PM, NYAdmin said:

    6. Any recommendations for college saving funds. HS Junior and 8th grader. I also have a very large monthly mortgage payment until about retirement age.

    It seems like you've really grabbed onto the idea that some funds are "better" in one type of account than others, but as a general rule of thumb (with a few caveats) that isn't how this works. You build a fully diversified portfolio with rock bottom costs (in short that means, you buy total market index funds). Then you buy those funds in the accounts where they're the cheapest and/or most tax efficient. You view your portfolio as the summation of all of those accounts.

    Yes, you apparently will spend money on your kids college, but it doesn't come from a single fund...it comes from your portfolio as a whole. You may do some mental accounting to imagine it coming from a particular source, but that's essentially a fallacy (one lots and lots of people fall into).

  7. Based on OCPS (FL), which I think is the same everywhere:

    AXA is documented here.

    Vanguard is documented here.

    If your state doesn’t have a great 457b then you’re also going to want to add a vendor for that too. Fidelity is the best, they’re documented here.

    I’m happy to help you reform your district’s plans. I’ve successfully done it in my district. You can navigate to my blog to read some of posts about it. I also answered a question about this over on a bogleheads thread

    Reach out if you want help. 

  8. You’re going to want to define terms. What is a straight average fee? Why do I care what the average participant fee is?

    Based on your post, I can’t tell, with any confidence, what you’d be paying at both vendors.

    Lincoln offers a cheap PDP plan in select areas.

    It is a good idea to list all available vendors because we might know something that you don’t.

    have you considered a 457b? Some states sponsor good plans even if your vendor list is bad. 

  9. You can absolutely eliminate a vendor from the approved list. It has happened in many places.

    I’m not sure exactly how it happens. Are people forced to rollover their plan to a currently approved vendor? Are they allowed to keep the account but no longer contribute to it? Are they allowed to keep and contribute to the account, but no new accounts can be opened?

    Maybe the specifics are negotiated on a case by case basis, maybe each vendor has a policy, or maybe the school district has a policy. Let us know what you find.

    Be prepared to counter the argument that removing a bad vendor will be disruptive to employees and is thus a “bad” thing to do. 

  10. 28 minutes ago, tony said:

    So, maybe, if you start them off automatically in a decent plan then MAYBE they will be  too lazy to change it over to something worse.

    Let me go further than Tony has. There is no guess work here. We have the data. This is a proven winner.

    Google it and see or start with what Vanguard has to say on the issue:


  11. I don’t think your hopeful suggestions are hopeful enough. I don’t believe in negotiating with myself. This is where I’d start:

    1. Fidelity is the only approved vendor.

    2. The Fidelity plan only offers target date index funds and the three fund portfolio.

    3. Employees are automatically enrolled into a target date fund based on their age and they default a percentage of their pay into the plan.

    Then the negotiation moves from there. I certainly wouldn’t start by conceding the approval of exploítative plans in the hopes of stopping agents from being on campus.

  12. I totally understand the throwing up and collapsing aspect of the story. Put me under a bunch of pressure and conflict in an environment where neither fight or flight are legitimate options and my body wouldn’t be able to handle it.

    I agree with MNGopher, living on 17k/year per person is risky. Perhaps if they’re living in inexpensive places abroad then it is more reasonable?

    I also wouldn’t feel comfortable with the 3.5% withdrawal rate for a 50-70 year retirement. The Early Retirement Now “study” found that a 75% stock portfolio has a 7% chance of losing value over that period and a 3% chance of reaching $0. I feel much safer at a 3% withdrawal rate.


  13. I don’t have any personal experience with this. Intuit answered this question for a 401k, which I imagine is very similar to a 403b.


    If I were you I’d start googling, read the paperwork you presumably signed, and get a hold of the institution you took the loan from to get details on the exact terms. 

  14. 17 minutes ago, jebjebitz said:

    they have decided that they are unable to post this information on our union website

    Sorry to read that.

    In another life I’m an uncompromising union boss that is entirely focused on teacher pay, benefits, and working conditions. I am 100% behind unions, but sometimes the things they focus on really upsets me.

  15. So most people don’t know math. Depressing.

    I’m always shocked when I hear a full grown adult claim they never use algebra. How different is their life than mine? I use it to properly space out medications, to water and treat my lawn, to plan my investments, to track and adjust weight loss, to adjust my weight lifting program, to determine if purchases (house, car, AC, etc) are worthwhile, to order the proper amount of mulch, and on and on it goes.

    I guess everybody else is just winging it?

  16. 55 minutes ago, tony said:

    Americans definitely suffer from this syndrome. They definitely form an irrational bond with their jobs.We probably spend more time working than any other industrialized nation

    I don’t entirely share this quality, but I can fully understand the basic human desire to do and accomplish things. What fascinates me is that so many people choose to direct this energy towards their employer’s goals and interests rather than their own.

    55 minutes ago, tony said:

    we don't complain much but maybe a little more than we used to

    There’s a pretty big difference between my little Millennial bubble, which is overpopulated with software engineers, and my perception of the general population.

    In my bubble there is a significant minority (40% maybe) of people who believe:

    1. Corporations are amoral at best and immoral at worst.

    2. The short term profit motive combined with #1 cultivates a culture where employees are objects standing in the way of additional profit.

    3. The economy is structured against workers and it’s only going to get worse.

    These folks tend to complain loudly and have no problem envisioning and planning for their lives post-FIRE.

  17. The author claims:

    1. Identity crisis.

    2. Lack of productivity leading to doubt, depression, and negativity.

    3. People won’t like you because you’re retired.

    4. You won’t be as happy as you think (or happy at all) and then you’ll beat yourself up.

    5. With nothing to do, you’ll question the point and hollowness of life. 

    I feel like 1, 2, and 5 are all the same point. We really have conditioned society into becoming human machines that find joy in maximizing productivity for their employers. It’s like Stockholm Syndrome, just wild. 

    I think 3 just saves you time from dealing with folks you’re better off avoiding.

    4 is interesting because of course you adjust to happiness, but a lot of people struggle to adjust to their soul sucking jobs. The choice seems obvious.


  18. 20 hours ago, MNGopher said:

    Although I'm still 3-4 years from retirement (when I will be 57-58)...I will have the option to accelerate my pension pay out to 62 or 67

    So you’re going to be retired and NOT receive a pension for several years?

    20 hours ago, MNGopher said:

    I assume the numbers are actuarially neutral

    I think I’d basically ignore what is or isn’t actuarially neutral for them and think entirely about my circumstances.

    The most naive approach is to estimate when you’ll die and calculate (in inflation adjusted terms) which payout gave you more money. Of course this is incomplete because you’d have to model opportunity cost. Delaying will lower your taxes now, but increase them later. Delaying might mean that you can’t take the early pension payouts and invest them for a nice return. I’m sure there are more opportunity costs.

    If you want to be precise you’d have to build them all into a model and see what looks better. Of course at that point you’d want to tweak your assumptions (like life expectancy) to see how much they affect the end result...that’ll allow you to better account for risk/uncertainty. For example it probably wouldn’t be worth delaying to get an extra dollar if your assumptions are right, but risk 100k if your assumptions are wrong.



  19. I suspect I’ll hold the minority opinion here, I didn’t find the 5 listed arguments to be particularly persuasive:

    1. This argument is as old as time and I’m tired of hearing it. Every generation gets labeled as inferior to the last, yet somehow when you look through the volatility, civilization manages to improve rather than regress. In this case, I guess she is arguing that this generation of parents/society is getting it all wrong relative to older generations. I’m not buying it.

    2. She didn’t even provide evidence that relationship building is hindered by preferring teachers with a basic understanding of technology or giving children one to one access to technology. She just states it as fact, a fact that I suspect isn’t actually true. The access I had to technology as a student changed my life and prepared me for my career as a Software Engineer.

    3. She seems to be arguing that training diminishes quality instruction rather than adding to. Obviously that isn’t generally true. It would be reasonable to ask for better training or the ability to “test out” of training that is beneath you, but to argue that training hurts quality instruction conflicts with every experience I’ve ever had with training/education. It’s an investment that generally pays off because you’re able to stand on the knowledge and experience of so many people who are probably smarter than you.

    4. I have no idea how she proposes we hold parents accountable. While I sympathize with the annoyances that the general public (in this case parents) can often provide...that’s part of the job of a teacher.

    5. It isn’t clear what she needed for the kids that was being withheld. I guess dealing with all of the sad aspects of society (poverty, disability, etc) and seeing that show up in children had a negative affect on her mental state, which then affected her physical state. That’s fine, I sympathize. There are lots of jobs I’m not emotionally capable of holding, but it is because of who I am, not a defect in the job. 

  • Create New...