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Everything posted by MNGopher

  1. Yep, I saw that and joined the FB group yesterday.
  2. Congratulations! Excited to hear about the changes that are coming. It should be a great help for the K-12 community.
  3. I'm glad it worked out. It's amazing to me that with all our modern technology, a simple transfer of funds is such a time consuming process.
  4. We've had some vendors that have been removed. The people that already had accounts there could keep them, but no new participants were allowed.
  5. I very much respect people that live frugally, save a lot, and invest wisely, but this couple is cutting it way closer than I ever would ever dream of. The numbers say they will live the rest of their life on a little over 30 K annually, adjusted for inflation. What if they have a child or get a pet someday? I can't imagine living with no vehicle other than bikes and bus passes for the rest of my life. What about illness or injury? I didn't see anything about health care in their budget. With stories like this I always suspect that there is more to the story, like maybe an inheritance, windfall, or some income producing gig they aren't telling us about.
  6. For some reason Vanguard will figure out your personal rate of return for each time period except for YTD. However for the two funds I own in tax advantaged accounts, the return at the half way point were as follows. Note this is the funds return, not my personal return, because in the case of the 403b, I didn't put it all in on the same date. The Roth I did put in the first day of the year. 403b VRIVX Vanguard Institutional Target Date Fund 2025 (about 65/35 stock/bond) 13.23% YTD Roth VASGX Vanguard Life Strategy Growth (80/20 stock/bond) 14.36% YTD (This one is now 15.27% as of July 2 😀 )
  7. I think that's the average expense ratio of all his funds.
  8. And yet annuity salesmen are allowed in the schools and give questionable financial advice (if not outright false information).
  9. I don't think that I want to do it (the accelerated pension payout). I was wondering if anyone had a good reason why I should do it. It is an option offered by our state pension, and about one third of Minnesota retirees choose to do it. I assume the reason being they want the extra pension income as a bridge to Social Security.
  10. No, I would get a pension as soon as I retire. It's just that we can choose to take a higher amount early in retirement and less later. But as I mentioned, I am leaning against doing the acceleration.
  11. It's not as good for younger teachers. I was fortunate to start paying in to the pension fund when I did. People who started teaching just a few months after me will have to work many years longer to get the same benefit.
  12. Thanks Tony, I'm not a math whiz either, but my thinking is much the same as my social security thinking, that being that if a person is healthy and doesn't need the extra money right away, well, you might as well let it sit and get a higher lifetime benefit by delaying. We don't have a lump sum option in Minnesota, and there are a bunch a different options on survivorship % payout for the beneficiary. If I just look at the No Refund (no survivor benefit) as a baseline it's basically...Option A: 4,050/mo. for life, Option B: 6,350/mo. until age 62 and 3,100/mo. beyond 62, Option C : 5,800/mo. until 67 and 2,100/mo. there after. I'm rounding numbers off, and all 3 of these projections assume retirement at age 57 with 33 years teaching. The beneficiary options are also good and the monthly amount only drops off about $100-200/month depending on if you choose 100%, 75%, or 50% survivor payout. There is also a "bounce back" so that if your spouse/beneficiary dies first, you automatically bounce back to the highest amount. I'm leaning towards not accelerating the pension. I want some low income years between age 57 and Social Security, where I might be able to take capital gains at 0% and do some Roth conversions from my 403b.
  13. Although I'm still 3-4 years from retirement (when I will be 57-58), I recently met with a counselor from the Minnesota Teacher's Retirement Association, so that I could weigh some options. One area that I could use some feedback on is the option to accelerate my pension. I will have the option to accelerate my pension pay out to 62 or 67 (or anywhere in between), and then for the rest of my life the payout would be lower. They ran several projections, and I assume the numbers are actuarially neutral, for normal life expectancy. I am leaning towards not accelerating, because a.) I am in in good health and have a longer than average life expectancy based on my relatives, and b.) I have enough saved between my taxable and tax advantaged accounts that I don't need the extra pension income for my life style. Is there any good reason to accelerate in my situation? Has anyone else had this decision to make? Of the two retirees that I have talked to that did accelerate, one was happy with it and one regretted it, but they didn't explain further. The stats say that only about 1/3 of Minnesota retirees choose the to accelerate their payout. Anything I'm not thinking of? I will probably wait to take SS until at least my full retirement age.
  14. tnewin, Setting up a taxable account at a company like Vanguard is very easy. I think you can do it yourself online, or if you prefer call and have them do it for you. I have all three account types, and actually started doing taxable before 403b because Vanguard was not an approved vendor at my district until about 5 years ago. I have since transferred all my "bad" 403b funds to Vanguard like you are planning on doing. A couple key things to remember in a taxable account are, 1.) Buy mostly tax efficient funds. In short this means hold mostly total stock market funds, and avoid bonds or things that kick out a lot of dividends. Dividends are taxed as income in the current year, whereas capital gains are taxed at a lower rate when you sell. You may want to increase your bond holding in your 403b, so that your total portfolio maintains your desired asset allocation., 2.) Hold funds at least one year before you sell so that you qualify for the long term capital gain rate. As far as where as to prioritize Roth IRA vs. Traditional 403b vs. Taxable, reasonable people will disagree. This if far less important decision than contribution rate and low fees. Personally, I like a mix of all, but I would prioritize the tax advantaged (403b and Roth) before the taxable, unless you expect an income throughout your entire retirement that exceeds your current income. Note, however, that this is not what I did originally because of bad 403b choices.
  15. I think the main problem with teacher's pay is starting pay. It starts so low that many don't stick with it long enough to reap the other benefits. I started at 20K back in 1990. That same summer I made more per hour installing low voltage cable with a buddy. For this summer job, I had zero training, no interview, references, or resumes. Just showed up and started working, and didn't even meet the boss until about a month later. I did a few other jobs in the summers during the early years of teaching. Starting pay now in my district is about 40K, which is pretty low for a college grad in a medium cost of living area. Teachers at the top of the pay scale who also coach a few activities can now make over 100K. With salary closing in on 6 figures, full medical and dental insurance, life and disability insurance, great 403B choices (now) with small employer match, approximately 50K pension at age 57, a severance payment, and full "bridge" health insurance until medicare, I can't complain too much about the compensation. I know others have it much worse.
  16. There is no free lunch. I prefer an inexpensive, healthy, and delicious lunch that I know won't cause me digestive issues later. I certainly don't want a lunch that someone is willing to pay me to eat. And seriously, zero isn't that much better than 5-10 basis points, especially when many people may be paying 2-3% annually on their investments.
  17. 100 Grand represents how much the high fees of an annuity will cost you over a career.
  18. Right, some insurance products like a SPIA definitely have a place for investors with no pension or SS, but as you said, not for accumulation.
  19. Great succinct article on the pitfalls of annuities as retirement plan. 1.) High fees, 2.) Surrender charges, 3.) Sold by non-fiduciary commissioned sales people, 4.) The misleading narrative about the benefits of an annuity being tax deferred, when the 403b itself is already tax deferred.
  20. One additional heads-up. If the time between when Newport Group receives your transfer-in paperwork and SB sends them the money is more than one month, Newport may make you resubmit the form. That's what they did do me just about half a year ago when I transferred my last account over to them. (I have done 3 transfer/exchanges total over the last 4 years).
  21. You are making a very good move by switching your 403b to Vanguard. You will be able to invest more of your own money in the next 4-5 years until you retire because of the lower expenses. You will also continue to save on the expense ratio after you retire as you spend down your account. The exchange of funds can be somewhat frustrating, but it's worth it. A few things you may have to deal with when making the exchange... 1. Contact Vanguard/Newport to initiate the process. Since they have the financial interest to help you move the funds, they should be more helpful, although some of the people at the Newport Group that I have talked to are not all that knowledgeable. 2. Vanguard/Newport will have you fill out and sign an "Exchange/Transfer In" form. 3. Vanguard may require a Medallion Signature Guarantee. This is kind of like getting something notarized and can be done at a bank. 4. If you have a TPA (Third Party Administrator), their signature will also be required on the Transfer In form. 5. The out going custodian will probably require a "Transfer Out Form" that may also need to be signed by you and your TPA. 6. Expect the outgoing company to drag their feet a bit with the exchange. This is their last ditch attempt to get you to give up, so that they can continue to rip you off. Be persistent, don't let them do it!
  22. This fee started at about the same time that the outsourced their 403B services to the Newport group. I think they lowered some of their expense ratios held in the 403b plans at that time also.
  23. Teachers salaries continue to drop, relative to inflation. All the more reason to keep investing in low cost choices in you 403b, 457, and IRA's. http://neatoday.org/2019/04/29/national-average-teacher-salary/?utm_source=20190501&utm_medium=email&utm_campaign=nea_today_express&utm_content=educator_pay
  24. I strongly do not endorse VALIC. I had to deal with them for years before getting out. However it is worth checking out what funds they have offered for your district's plan. It could be different in your area.
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