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Everything posted by EdLaFave

  1. Without getting into the weeds, the Wash Sale is relevant to 30 days before Tax Loss Harvesting and 30 days after. If you wait 31 days after the sale, you could have bought right back into the fund that you sold from. When people tax loss harvest they often want to avoid being out of the market. To accomplish this they will immediately exchange from the fund with a loss to another fund as long as that other fund isn't "substantially identical." This is why whyme talked about exchanging a total market us fund for an S&P 500, they both have extremely similar performance, but you can argue the absence of small and medium size companies in the S&P 500 fund prevents it from being considered "substantially identical." This is a mental accounting fallacy. It isn't logical to treat money that is currently in cash differently than money that is currently in the market. We all have a total portfolio (regardless of what assets it is split between) and we all have to make a decision (every day) as to how that money is or isn't invested. What your portfolio was invested in yesterday has no bearing on what it should be invested in today. Either you think it is a good to have Y dollars in the market or you don't, it doesn't matter where those dollars were invested yesterday. This is absolutely marketing timing and market timing is usually considered cautious/fearful. Decisions you make based on short term market movements and this idea that you can predict the short term future, well that's market timing. Market timers often find ways to do the wrong thing twice. During a bad market they won't put their money in because they're being cautious. During a bull market they'll pour it all back in because things are "good". The proverbial sell low and buy high.
  2. The IRS says that if you buy a "substantially identical" replacement then it'll trigger a wash sale, which you clearly do not want to do. The IRS has not explicitly defined what "substantially identical" means. Somebody could make the proposed exchange and claim a loss. However, in the event of an audit, I sure wouldn't want to be in the position of making the argument that those two funds aren't substantially identical. Just a word for anybody reading these comments. This is a form of market timing and is particularly dangerous because this is exactly how people miss the recovery after a crash. If you want to invest successfully accept the reality that nobody can predict the short term future so all you can do is buy and hold (no matter what is or isn't happening).
  3. Any time you ask yourself a question that begins with “given what the market is doing now” it is almost certainly going to lead you to engage in market timing You have to get comfortable with the idea that nobody can accurately predict what the market will do over the short term. Trying to time the market is probably the number one way people lose money. To answer your question, it’s always a good time to leave a high cost vendor for a low cost vendor.
  4. You haven't spent even a second providing proof at all. You've just gotten exasperated and said I was blatantly wrong without providing any argument.
  5. Tony, when I say something that is false, just provide the evidence and I'll immediately change my mind.
  6. My personal political views aside, the data is clear that we can’t both sides this. Fox News hosts have consistently and repeatedly reported things that are verifiably untrue. The same cannot be said for other outlets like CNN or the NY Times. Biases are subtle and subconscious and professionals do everything they can to overcome it, sometimes swinging too far in the other direction. Propaganda is something else entirely and for the sake of precision alone we shouldn’t confuse the two.
  7. I didn’t know that. I’m cheering for an immediate recovery. I don’t enjoy losing money, but I can think of one consolation prize of this well timed downturn 😁 😈
  8. haha, I’m old enough to remember Q4 of 2018 when we were within a hair of a bear market when the world’s two largest economies were locked in a pointless trade war. Nobody knows the future. I hope things get better quickly, but maybe they won’t. The huge market swings have really been something to see though.
  9. I don’t try to convince anybody to do anything because in my experience 90% of the time it is wasted energy. However, when people ask me how I feel, I tell them how much I’ve lost (usually quite a bit more than them) and how calm I am about dumping my next paycheck into the market. I think people find that level of confidence and emotional stability to be reassuring. I know nothing and I don’t think anybody else does either. For all I know the virus was just the spark that triggered the selling process on an already overvalued market rather than being the main driver behind the selling. Let’s assume the sell off is 100% because of the virus. Financially speaking, it seems like a virus with a low mortality rate is less scary than a fundamentally and structurally unsound financial system where every institution is on the brink of collapse. It wouldn’t surprise me at all if we bounce back from this within the next 12 months.
  10. What do you think is unique about this? Seems quite standard to me.
  11. If you save less than the IRA contribution limit (6k for those under 50, 7k for those over 50) the just stop the 403b and only use an IRA. If you save more than the IRA contribution limit then figure out what 403b and 457b vendors you have access to, stop National Life group, and fund some combination of an IRA and a better vendor (we need more information to be more specific on that split). NOTE: Your IRA doesn't have to be a Roth, it can also be a traditional. The same can be said for most 403b and 457b plans. The choice between Roth and Traditional should be made intentionally, you shouldn't simply default to a Roth IRA and a Traditional 403b.
  12. Maybe when the market closes today we will have officially crossed into bear market territory. I haven't looked, but I can do rough math and I know I'm down over 200k. I was/am considering early retirement, my current job is highly insecure, and I'm getting my roof replaced tomorrow. I'm told this is a recipe for emotional disaster, but I feel nothing. I get paid on Friday and I'll be buying stock with whatever is left after I pay my mortgage. If anybody needs a pep-talk to stay the course, let me know. Everybody knew this would happen, we just didn't know when. This changes nothing.
  13. I had to fact check this one after a friend mentioned it to me last night. https://www.snopes.com/fact-check/corona-beer-fear-coronavirus/
  14. I believe you were able to do this because he owned the 401k and you owned the 403b. I suspect if one of you had both accounts then you would have been in trouble.
  15. Another reminder to people concerned about having "too much" taxable income in retirement... That is likely a very good indicator that you worked much longer than you needed to! Retiring early is always something to consider.
  16. So your current 401k charges 0.50% plus whatever the expense ratios on the funds are. That's a lot and you're right, the three 403b vendors you listed would have lower fees. If I were in your shoes, I'd be generally advocating for lower fees. Moving to a Vanguard 403b is certainly one possible way to get there, but so is moving to a low cost 401k (presumably Vanguard offers that too). I wouldn't limit my focus to one of the many solutions to the overall objective. Don't confuse complexity with effectiveness. All you really need are three funds: Total Market Index Fund for domestic stock. Total International Market Index Fund for international stock. Total Bond Fund for bonds. For those that don't want to manage 3 funds you could throw in all-in-one funds too (they contain those individual funds under the hood): A fixed asset allocation fund like Vanguard's LifeStrategy funds. A target date fund that gets more conservative as you approach the target date like Vanguard's Target Retirement funds. So 29 funds is actually a lot more than you need (provided those 29 funds include the things I mentioned above). The number one thing I'd concern myself with is what tax deferred (401k, 403b, 457b, etc) plans will allow you to build a fully diversified portfolio at rock bottom costs. The number two thing I'd concern myself with is that it would be nice to have a 457b in addition to a 401k/403b because (and fact check me on this) the 19.5k limit is shared between 401k and 403b contributions but the 19.5k limit on 457b plans is in addition to the 401k/403b limit. So I'd be trying to maximize the amount of tax free space my employer provides me. The number three thing I'd concern myself with is the various differences between each type of account. For example the 457b has slightly different withdraw rules than the 403b does. However, this concern would be a distant 3rd.
  17. The Trump administration killed the Obama-era fiduciary rule. I won't comment on the effects surrounding the buzz/speculation related to the fiduciary standard. However, for anybody reading this thread I wanted to make a clear point: Either you're paying an ethical advisor on the front end or you're getting a "free" advisor who is selling you conflicted/expensive investments. In both cases it is very much against your interest to hire the advisor because of three things: You're working with small margins because the stock market is a get rich slow scheme; you're not pulling in huge amounts of money in any given year. It costs a lot of money to pay for a "professional's" salary. The professionals cannot beat the total market index funds so they're not bringing anything to the table. You're paying for nothing. You don't need the advisor because: You're clearly smart enough and capable enough to buy 3 total market index funds (bonds, us stocks, and international stocks) and keep them in proportion to each other over the years. Even if you're lazy and don't want to spend the 2 hours a year to keep them in proportion to each other, you can spend an extra 0.10%, buy an all-in-one fund like a target date fund, and literally do nothing (this is your "advisor"). You already know that you should be trying to max out your tax advantaged accounts (IRA, 401k, 403b, etc.) Folks at sites like this one or bogleheads or any number of others will give you free, unconflicted advice! ...the advisor isn't giving you anything, his job should go the way of the travel agent.
  18. If you sign up for it, please report back over time and if there aren’t any catches then I’ll document it and add it to my list of best vendors on my site.
  19. Just to be clear, what I said is that I have every reason to believe they’re unethical because they don’t list any useful information on their website. I reserve my actual judgment until I have the necessary information. I followed the link you sent. I see a $50/year custodial fee and I see a $121 annual cost fee listed at the top. I’m not sure what is what there. I also see you have access to: Fidelity 500 - 0.02% Fidelity Mid Cap - 0.03% Fidelity International - 0.04% Fidelity Emerging Markets - 0.08% Fidelity Intermediate Treasuries - 0.03% So if you only have to pay $50 on top of those expense ratios and there aren’t any other fees then this is a really good plan.
  20. I don't know why you're phrasing the expenses this way and I'm deeply skeptical of the "$50 a year for Fidelity funds" phrasing because: Vendors typically charge a flat rate to have the account (like Vanguard's $60/year) and/or an AUM to have the account (like Aspire's 0.15%/year). Furthermore, vendors at least to my knowledge, don't give different fees for a family of funds (like say Fidelity funds in your example)...they may inflate a fund's expense ratios. Additionally, I went to their website and it doesn't provide any useful information despite having pages and pages of "content." This is the same approach used by vendors looking to rip-off investors because they want you to call or they want to send a rep to you so they can apply high pressure tactics to get you to sign up for something you don't understand. They certainly don't want you to understand the product in the comfort of your home and then count on you signing up because it is so awesome. So although I don't have any experience with IPX, I have every reason to believe they're unethical.
  21. That’s great news. Security Benefit’s NEA DirectInvest is an elite 403b plan and I documented it here. The NYS 457b is also a great plan, the details of which have been discussed several times on this forum in the last month or two. Just use the site’s search feature. I feel quite confident that Voya isn’t a better option than NEA DirectInvest, but it won’t hurt to do the legwork to prove that out. Yes, if Voya is more expensive then I’d definitely roll that account over to the Security Benefit’s NEA DirectInvest 403b.
  22. There’s a website called 403bcompare that lists fees for plans offered in California. It isn’t always up to date. Still, that’ll provide a good proxy for the fees you’re likely paying. However, if you’re a K-12 teacher, I can almost guarantee you’re paying high fees with Voya. If you can figure out what vendors your district approved for 403bs and 457bs (the lists may differ from each other) then we can tell you what your best option is. If you have no good options, I can teach you how to get your district to add Vanguard and Fidelity. I don’t know why so many people feel like they have to choose between a Traditional 403b/457b vs a Roth IRA. The decision between Roth vs Traditional should be made independent of whether you’re using a 403b, 457b, IRA, or any other tax advantages account. Generally speaking, you should max out your IRA because it’ll have lower costs than a 493b/457b. One of the exceptions to this rule is if your 403b waives fees when you hit a certain balance, then you might consider dumping money into the 403b until the fees are waived. I’d need to know everything about your circumstances in order to give a well informed opinion. You can’t find the fees because they don’t want you to know what the fees are. Voya is a bad actor, I wouldn’t bother with them or their reps. Like I said, identify all of your available vendors.
  23. I don’t understand why you’re talking as if you’re losing the 40k. I’m going to guess that you’re not saving more than the 6k IRA limit plus the 19.5k limit that applies to 403b/457b plans. Therefore, what you need to do is: 1. Keep maxing out your IRA where costs are lowest. 2. Stop contributions to AXA and direct them to whatever employer plan is the cheapest (it sounds like you’ve said the state run 457b is your best option). 3. Lobby your district to add Vanguard and Fidelity. 4. Rollover your AXA plan to Vanguard or Fidelity and then assuming your state run 457b is more expensive than Vanguard or Fidelity, do the same with that account.
  24. EdLaFave


    It sounds like you've researched the particular differences between 457b and 403b plans and it is worth the extra expense to you. I'm glad you put in that leg work. My personal preference is the lower fees, but as long as you understand everything, it just comes down to preference. Just a warning to you (and something for you to let your teacher friends know about), Aspire also has an "advisor" option that isn't low cost. I've never worked directly with Aspire so I can't comment on how hard they push people towards those more expensive plans, but I'm guessing if somebody calls in then the advisor is pushing in that direction because it makes them money to do so. Number one isn't a problem. There are well defined ways to pull money out of a Traditional 403b/401k/IRA/etc without penalty if you retire early. Some approaches are highly specific like withdrawals for medical debt, but the general approach used for early retirement is known as Rule 72t and can be read about here. Number two was news to me and is a pro in the 457b column. However, I suspect only a small number of people would find it advantageous. According to the IRS page, IF your plan allows you to (you'll need to verify that) then the IRS is okay with you contributing the lesser of: Twice the annual limit $39,000 in 2020 and $38,000 in 2019, or The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions) So if you have lots of previously unused 457b space and enough spare money from your salary to take advantage then this is a good way to go. However, be aware of the fact that 403b and 457b plans have a more well known catch up rule that allows people over 50 to contribute an extra $6,500 (so $13,000 total). Therefore, if you don't have enough expendable money to contribute more than $58,000/year (6k IRA, 19.5k 403b, 6.5k 403b catch up, 19.5k 457b, 6.5k 457b catch up) then this 457b perk is actually meaningless.
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