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MNGopher

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  1. Ed and Tony are having one of their classic left brain/right brain friendly disagreements. It think it can be shown that mathematically, investing the money will beat paying off the mortgage more often than not, but that doesn't necessarily make it the best choice for everyone. You can't really put a price on peace of mind. Let me be the centrist here. In my case I bought a new construction 2,000 sf home in a medium cost of living area for $104,000. This was in 1995 and my original interest rate was 7 point something. I didn't know a lot about investing and only had annuities through my employer plan, so I plowed most of my extra money into the mortgage and paid it off in a little over 11 years. With the mortgage paid off, I started saving and eventually started investing more around the time of the great recession, which turned out to be a good time to start. Now, I was lucky on the timing here, and looking back at the rate of return of the stock market during the years that I held the mortgage, it probably would have worked about the same if I had invested the money vs. paying off the mortgage. My timing was lucky and it worked out for me, but in today's environment it certainly seems that keeping the mortgage and investing is the better choice. However in the future, who knows? Jim Dahle, "The White Coat Investor", wrote an interesting blog recently on the this topic of paying off debt vs. investing. https://www.whitecoatinvestor.com/pay-off-debt-or-invest/
  2. Yes, this. VFINX is not listed on Vanguard's site as an available fund, but I could still find today's price via google. There isn't a huge difference between the Admiral share S&P and VTSAX. Their performance and expense ratio are very close. I like that you get a little more diversification with VTSAX, and would use it when available.
  3. For what it's worth Vanguard upgraded my investor share fund to admiral shares at about the same time that they started working with the Newport Group. This was a target date fund, so I'm not sure if they also do this for the S&P fund. It does look like VFINX might be a fund that they are phasing out and not offering to new customers. I would get the total stock market (VTSAX) before either S&P fund if given the choice.
  4. Interesting to hear the perspectives from the retirees here. I'm in about the same position as Whyme (1-2 years away from retirement). I have considered going earlier but would take a big pension hit, so I think I'll wait it out until 2022. I'm glad I ramped up my savings in my 40's-early 50's, but wish I would have done more saving in my 30's.
  5. Welcome to the forum! At my school, insurance changes can only be made during open enrollment periods, but 403b changes can be made at any time of the year. It might be worth asking about.
  6. Welcome! I don't think it is "dumb" to be a 100% stock in your retirement accounts at age 35, as long as you have a solid emergency fund. I also don't think there is anything wrong with being 80/20 or 70/30 at that age. Either way, if you are maxing out both your backdoor Roth IRA and 403b, plus maybe a pension, you are going to be very well set for a fairly early retirement.
  7. What is the reason for wanting to move assets from your IRA to your spending account, if you don't need the income? I would just convert traditional to Roth to the top of your current tax bracket, if you are in a lower bracket.
  8. We don't have all the information on the relative, but from the clues given: 1) charter school, 2) young with only a couple years experience, 3) no match, 4) less than perfect 403b vendor, 5) under $6K to invest annually......Roth IRA seems like the logical choice. She can start making tax deferred investments as her income rises.
  9. MNGopher

    Zero fee ETFs

    Many Vanguard funds are covered by a patent that lets them keep their funds more tax efficient than other companies. Bloomberg article about this. https://www.bloomberg.com/graphics/2019-vanguard-mutual-fund-tax-dodge/ I would guess not having shareholders, local offices, or a lot of advertising all help to keep costs low as well.
  10. Ferri interviewed Merriman in this episode of the Bogleheads podcast. https://bogleheads.podbean.com/e/episode-018-paul-merriman-host-rick-ferri/ I'm in the camp that the average investor doesn't need to "tilt". I mean it might work out better and it might not. I think the main thing is that if you decide to do it, you don't chase performance, by changing your tilt every few years, or you are bound to underperform the total market by doing this. You have to commit to it for your investing life, as Rick Ferri often says.
  11. Which is the greater amount? A. Your salary this year. B. Your annual pension income + 4% of your estimated 403B balance when you retire. If A is greater, you are likely better deferring taxes in a traditional 403B, so that you will pay taxes at a lower rate. If B is expected to be greater put the investments in some type of Roth account and pay the taxes this year. If A and B are too close to call, do half of each. This might be overly simplified, but I think it a good general guideline. PS: If you do work until age 75, you could probably take out more than 4% every year and never run out of money.
  12. If there is a bright side to being very poor in retirement (low income), it's that at least you can take money out of a traditional account at a very low tax rate! I don't think you're going to be as bad off as you think. Start upping your contributions to the maximum or near max and your accounts will start accumulating fast.
  13. Fidelity Security Life is not the "good" Fidelity. I think the Vanguard traditional 403B is your best plan. Your income now is probably greater than the combination of your state pension and your withdrawals from your own deferred account will be. If your tax bracket is higher now than it will be when you retire in your 70s (with no SS), then you are better off doing traditional and paying the taxes later at a lower rate. If there is a possibility that your retirement income will be higher than it is now, you could hedge the bet by contributing to a Roth IRA on your own. But if your retirement income is higher than it is now, you might want to rethink working until your mid 70s and retire sooner.
  14. Will you have a pension at some point? Will you have social security? (and how much?) The answer to these questions will help determine if you should do Roth or Traditional.
  15. https://www.wsj.com/articles/aig-unit-to-pay-20-million-to-settle-sec-probe-of-teacher-retirement-business-11595941081?st=450wa1z5z9qabty&reflink=article_imessage_share&fbclid=IwAR3gjMXHvOuGa9m8roP0njjLUzZ8bnELB7-p3o8-Vs1KWFepXKUVPFBhpZw Dan Otter posted this on the Facebook page, in case anyone hasn't seen it yet. Looks like a step in the right direction in placing some accountability on the insurance companies that prey on educators.
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