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Everything posted by EdLaFave

  1. The phrasing around FIRE drives me nuts. Was hard work and sacrifice at play, maybe? Was there a bigger factor in saving a million dollars in five years? Absolutely, otherwise we’d have a lot more millionaires running around.
  2. Thanks Steve, I actually just emailed them today. Hopefully, I'll hear back soon.
  3. Just echoing the previous responses. I documented Security Benefit’s NEA DirectInvest plan here. I documented the specific steps I had to go through to enroll here. Blindly investing in something you don’t understand is a great way to be taken advantage of. So I’m going to assume you also want to understand investing. Please read the Investing 101 page I wrote and come back with some questions. It is a quick read that explains the heart of what you need to know, the only thing it doesn’t cover is the types of accounts that exist.
  4. This is the docile attitude that allows the 403b/457b mess to persist. One of the greatest Americans to ever live taught us very plainly that, "Power concedes nothing without a demand. It never did and it never will." OCPS (FL) didn't "want" to add Vanguard and Fidelity when I initially ask and they certainly didn't feel like they "needed" to. However, they relented when I refused to drop the issue. This is just how power dynamics work. If you're quiet and accepting, you'll be taken advantage of.
  5. In my experience it takes the same amount of effort to add any vendor. So choosing to add a vendor that is inferior to Vanguard and Fidelity is not a wise decision. Adding Vanguard and Fidelity to OCPS (FL) was in no way more difficult than it would have been to add Aspire. There is nothing unrealistic about accomplishing this, at all. ...if in some districts adding vendors takes varying amounts of difficulty, then it wouldn't be wise to begin with the inferior choice. Start with the best and work your way down from there.
  6. I just wanted to endorse what Krow said. Also, even if "all" you were being charged was 1%, that is absolutely egregious.
  7. If you're going to go through the process of getting a vendor added to the list, and I highly encourage you to do that, then do not put effort into adding Aspire. Put all of your effort into adding Vanguard and Fidelity. Aspire is needlessly more expensive than both Vanguard and Fidelity. I got OCPS (FL) to add both Vanguard and Fidelity to their list of vendors. I wrote about that in a few blog posts. I'd be more than happy to help you navigate the process.
  8. Security Benefit's NEA DirectInvest is an elite 403b plan. I enrolled my ex-wife in that very plan. I documented the details of the plan here. I documented the exact steps to enroll in the plan through OCPS (FL) here. You may benefit from reading the Investing 101 page I wrote here. Sadly this plan isn't offered as a 457b, so if you're able to max out the 403b then your next best option for the 457b is Aspire, which I documented here.
  9. EdLaFave

    So Many choices

    Security Benefit's NEA DirectInvest is an elite 403b plan. I enrolled my ex-wife in that very plan. I documented the details of the plan here. I documented the exact steps to enroll in the plan through OCPS (FL) here. You may benefit from reading the Investing 101 page I wrote here. Sadly this plan isn't offered as a 457b, so if you're able to max out the 403b then your next best option for the 457b is Aspire, which I documented here.
  10. If you need help choosing a vendor, it would be wise to post the entire list. Security Benefit's NEA DirectInvest is an elite 403b plan. I enrolled my ex-wife in that very plan. I documented the details of the plan here. I documented the exact steps to enroll in the plan through OCPS (FL) here. You may benefit from reading the Investing 101 page I wrote here. Sadly this plan isn't offered as a 457b, so if you're able to max out the 403b then your next best option for the 457b is Aspire, which I documented here.
  11. He is lying. An advisor only has a fiduciary responsibility to a client if they explicitly sign paperwork with the client and that paperwork explicitly defines exactly what it means to be a fiduciary. Still, even with a fiduciary, a client is still paying the salary of another person. That’s expensive, profit margins are already narrow, and anybody can handle an all-in-one fund on their own and most can handle a 3 fund portfolio.
  12. Vanguard is the way to go. I documented their plan here. You may or may not find the Investing 101 page I wrote helpful. One thing worth noting about the Vanguard 403b is that they charge a flat $60/year fee. So if you and your spouse are investing less than or equal to $12,000/year then you’ll be slightly better off using Vanguard IRAs instead of the 403b. On the other hand if you’re already maxing your IRAs then the 403b is an excellent option.
  13. ...you’re playing illogical mental account games by thinking you can treat one pot of money differently from another pot in terms of risk appetite. It is a dangerous game that lots of people play and it doesn’t make mathematical or logical sense. Yes, in my view it is “worth it” to buy the individual funds instead of an all-in-one fund. However, if you’re the type of person who won’t keep buying the under performing asset class or won’t/can’t take take the minimal time to understand what you’re supposed to do and then actually do it, then I’d strongly recommend and all-in-one fund to protect you from yourself.
  14. I think it is useful to address some deeper more fundamental questions than just the ones you asked. If the vendor is charging 0.5% on top of whatever they’re charging for the funds, this isn’t a very good plan. So it would be in your best interest to identify every 403b and 457b vendor your district has approved. Some states have state sponsored 457b plans that are relatively good and sometimes great. Come back and post your options and I can give some further guidance. I think you’d benefit from reading the Investing 101 page because it hits on several of the topics you’re asking about. With respect to which funds you should buy, you definitely want total market index funds because they’re really low cost and fully diversified (that’s how you pick a fund). The following three will give you a fully diversified portfolio: VTSAX, VTIAX, and VBTLX. However, you want your portfolio as a whole to meet your asset allocation, so which funds you should buy and in what percentage depends on what funds you own in your other accounts. It isn’t “correct” to say that having other retirement accounts means you can take on more risk in this account. Everybody has a specific amount of risk they’re comfortable with and their overall portfolio should always reflect that. If you decide to be “more risky” in this account it means one of two things: your other accounts were too safe to begin with or you’d be taking on too much risk. In my view you should recognize that stocks can lose approximately half of their value very quickly and take years (maybe even 10+ in a terrible scenario) to recover. However, stocks have a higher expected return in the long term. You want to own as much stock as you can such that when a crash does happen you keep buying stocks and you don’t do something foolish like sell. Having said that, only you know what that percentage is.
  15. 1. Definitely find and post every 403b and 457b vendor your district has approved. You may want to take a look at my page documenting the best vendors available throughout Florida (a good proxy for the nation). 2. You do not need to pay anybody for advice. The industry makes it complicated, we can cut through the nonsense and make it simple for you. You may want to read the Investing 101 page I’ve written. 3. Don’t feel shame, you may want to read a blog post I wrote that explains how you fell into something tailor made to trap you. 4. I already know everything I need to know about your current plan...I would get out as soon as I identified my best alternative.
  16. EdLaFave


    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. 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. 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.
  17. I’ll add more later, but yes, Fidelity and Vanguard are clearly the best vendors.
  18. Any word on when and how I can watch it from home? Maybe Netflix?
  19. 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?
  20. I just wanted to bump this thread because I think I found an error in my initial analysis (see the strikethrough text). I welcome group wisdom to try to get to the bottom of this.
  21. Sorry to hear that. 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.
  22. 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.
  23. 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: I'd have exactly one vendor for the 403b and one vendor for the 457b...neither would have agents. 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. 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. Every employee would be able to override this automatic enrollment. 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.
  24. EdLaFave


    ...also, if you have access to a 457b, then take advantage of that too. You can put 19k in a 403b and another 19k in a 457b.
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