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ScottO

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Everything posted by ScottO

  1. 2021: https://youtu.be/gx-OzwHpM9k 2020: https://youtu.be/69rm13iUUgE One of the strangest ways I've calmed myself down about investing during this period of uncertainty has been watching Warren Buffet speak during the Berkshire Hathaway shareholder meetings. 2020 included a neat presentation on "the American tailwind" and I'm still working my way through the 2021 video. They are at least four hours long, so maybe it just exhausts my brain on the topic for the year... does anyone else watch these?
  2. Getting employees to go through the trouble of establishing the system is hard enough... I think we have like a 25% participation rate among all groups, 37% among classified staff. It's unfamiliar, so right now I'm thinking baby steps and low-effort/risk introductions to the experience. The calculator might make it all seem to complex, but I do like the chart that summarizes the "annuity, mutual fund, index fund" picture.
  3. πŸ‘ I'll include that in the presentation, great suggestion.
  4. I'm a classified employee and California Ed Code designates the third full week in May as Classified School Employee Week. As a part of this we have a professional development flex day where I get the chance to highlight 403b and 457 plans. I was thinking about giving my colleagues all the answers up front without any background first: Create a 403(b) account with Fidelity using the district plan id # Configure elections for your contributions to go 100% into a target-date index fund (choose the year closest to when you'll retire) Contribute a minimum of $20/mo. to that account automatically no matter what Contact me in 30 years and let me know if this was a good decision How do you all think that would go over? I kind of want to highlight that this can be extremely hands-off and you don't need any knowledge of stocks, bonds, markets, crypto, beanie babies, etc. to get (most likely positive) market returns. It's seems like an low cost ticket to experience the show. I have an hour to work with. The rest could be Q&A or data that supports the argument. It's an opportunity for interaction, so I could get some of the people who've been utilizing the plans to share experiences or ask, "tell me why I shouldn't put money in a 403(b)?"
  5. Have you pointed out your forum marketing and engagement feedback/suggestions to Dan? He doesn't seem like a malicious fellow with a hidden agenda to burn down the message board... @Admin
  6. I prefer the format of forums, but there's not a lot I can do if all the cool kids are giving away their personal information on Facebook and supplying Zuckerberg with ad revenue. Lately much of the investing conversation has been overshadowed by speculation and FOMO. Crypto currency, shorting Gamestop, r/WallStreetBets... it's all too much for a passive Boglehead to comment on. Stay the course and pay attention to the business of living.
  7. Opt-out enrollment is supposed to yield higher participation than opt-in. Getting colleagues started is often the most difficult and confusing part of the process for those who are new to it. I see the advantages, but I also understand those who need their entire paycheck to make ends meet.
  8. Nice! You're ahead of CalPERS - 71% funded I have co-workers who are more stock heavy with their allocations due to having a pension. I know retirees who've never utilized 403b/457 accounts and take home more than 100% of their working salary in retirement (classified staff get social security.) Dan & Scott get asked the question quite a bit during Q&As... I feel like they treat it as a separate component, neither a stock nor a bond, with no affect on asset allocation. Some articles I see argue that the stable income means you have the ability to be more conservative to achieve your desired outcomes, but it probably depends on your timeline, years of service, etc. (it's pretty common for most personal finance questions to be answered with "it depends.") I wish I could find something from Vanguard or the Bogleheads wiki (not the forum) with advice on the topic. I may have to flip through a few books to see if there's advice in them... "Teach and Retire Rich" or ""The Intelligent Asset Allocator"" might mention it. Perhaps the topic is omitted and treated the way you're looking at social security?
  9. https://www.sec.gov/teachers-guide/planning-for-retirement https://www.investor.gov/additional-resources/information/saving-and-investing-resources-teachers https://www.investor.gov/sites/investorgov/files/2019-02/Teacher_Investing_Guide.pdf https://www.sec.gov/teachers https://www.sec.gov/page/teachers-outreach-podcast I always tell employees at my school to consult multiple sources and make up their own minds about how to proceed with financial advice. This could be a new thing to recommend in addition to 403bwise.
  10. *high five* CalPERS members get COLAs after they've retired. I've heard of some pensions that don't. I'm a "classic" member, so my pension is based off the highest single year, .02 @ 55 which grows gradually to .025 @ 63. Sick leave can be used toward years of service if you retire with the district and collect from the pension within a set # of months. It's worth sitting in on a retirement workshop to hear the options you have. Early on when I was hired there was the option to purchase years of service, but that has since gone away. There could be some unique things you can take advantage of. The COLA with my pension is kinda special because our district hasn't been giving COLAs to current employees due to financial shortfalls, so you can get raises that you otherwise wouldn't. What does the 89.6% funded mean? Is that where you need a number of years of service in order to collect? With CalPERS I need a minimum of 5 years to collect. My wife holds me accountable for investment practices we've agreed upon: Maintain 6 months expenses of emergency fund Credit card statement balances paid monthly Contribute to tax deferred retirement plans Contribute monthly to Roth IRAs Anything over that goes into our taxable account monthly There's a set day of the month when the Roths and taxable buys happen... if I'm persistent I get to do it a day early πŸ™‚ I appreciate that she helps keep us on track - consistency is key. DCA. Stay the course. Live long and prosper.
  11. We'd probably need to know more about you pension to optimize or leverage it and overall financial situation to give accurate advice (as accurate as a rando on the internet can provide.) I'm 38 and have been using the lazy portfolio style setup consistently for a few years. I try to mirror the target date fund investments 90/10:
  12. The book certainly contains a good amount of "gobbledygook" to wade through, but there are also unique concepts inside that make it worth reading. You could find it at a local library and skim through it quickly or not pick it up at all and be fine - I doubt I'll persuade you to and have a feeling that each person posting in this thread probably has their finances in order. Understanding the psychology behind the way you manage money can lead to long-term changes in habits that mathematical reasoning alone may not. "Save what you can, when you can" is a soft introduction to the idea of saving. Hard rules like, "save % of your income," tend to alienate people who currently feel unable to meet that goal. Money is a difficult topic to discuss and a lot of advice tends to come across as shaming. We're all products of a system which is intentionally designed to kick us around as it is. "Do not carry debt on credit cards" could be unrealistic for someone in a crisis (and if they are taking advantage of 0% balance transfers it might not be so harmful [as long as it's paid off before that term ends.]) I even have my doubts about "predictable income" as a dependable thing in the world we live in after going through global and personal catastrophic events. Society continues to evolve in unanticipated ways. Higher education can be slow to respond which may leave it on shaky ground: β€˜No college degree required’: Google expands certificate program for in-demand job skills (msn.com) Values can go beyond creating the ultimate selfie portfolio. An underpinning of many financial movements is environmentalism through reducing consumption and waste. Emphasizing spending in your local community and keeping your money from being extracted from it can also be a value. "Voting with your dollars" by making choices, such as not to get your next pillow from Mike Lindell... All of the beliefs, math, and psychology really take a backseat to this though: Warren Buffett says the most important decision is who you marry (cnbc.com) ("A Random Walk Down Wall Street" by Burton Malkiel is excellent.)
  13. It comes from YMOYL: https://yourmoneyoryourlife.com/book-summary/ There are steps and introductions to the topic in the book that provide context. TL;DR - Money = Time = Life Energy I remember a "fulfillment curve" in the book that showed how you're most satisfied when you have "enough" - that recognition discourages buying more for the sake of seeking the same satisfaction from the original purchase. e.g. 1st car = amazing, 2nd car = less amazing + additional expense and you can only drive one at a time. (Consider having less.) I use the values part quite a bit when making purchase decisions. Do I really believe that I need to keep up with the latest model of phone? No - how do I navigate owning this thing I need, but doesn't necessarily have importance to me? Look for something used, take good care of it, replace when it breaks or when absolutely necessary. It's an easier process than budgeting and comes with a warm fuzzy feeling. I read the book in 2015, we started narrowing some spending and expanding spending in other categories or acknowledging that we shouldn't seek to skimp on things like health & fitness: It's permissive too - if you value supporting phone manufacturers and get your jollies off by having a new one, then do so by all means (unless it causes you to go beyond your means.)
  14. Save what you can, when you can. Spend in alignment with your values. Reflect on your expenses periodically.
  15. +18.9% YTD return in 2020 (403b)... I have trouble comprehending that number given what we've all been living through. Roth IRA was up +22.9%(60/40 VTSAX/VTIAX), Taxable +30.8%(100 VTSAX), 457 +20.8% (10/90 VTSMX/Same as 403b) We keep chucking in our contributions regularly each month regardless of what the market is doing. That projected cost table is wild! It's win or lose too... no matter what, an advisor would take that cut of your account - ouch!
  16. Should You Pay Off Your Mortgage or Invest the Cash? (affordanything.com) I wouldn't accelerate mortgage payments and regret the few times I put extra $ toward my home loan instead of my Vanguard account. All your lender cares about is getting their money on time. I could pony up extra /mo. or pay down 90% of my loan in a lump sum, but if I miss a few payments; foreclosure. Property value goes up or down regardless of a loan balance. All your $ in one house = All your eggs in one basket (poor diversification.) Disasters happen and houses don't recover in two years on their own. Using that same $ toward home improvements would do more to increase your quality of life and the value of the home, but see above. $ in Retirement Accounts > $ in Real Estate (review your state's laws) in the event of bankruptcy, divorce, legal action, etc. Getting money out of a home normally requires a lengthy(costly) process. Selling shares is so much faster. There may be less of a tax advantage to put $ toward a real estate loan than in a 403/457 acct. I just got a loan modification offer from my credit union to go from 2.875% to 2.25%... not rushing to pay that balance off at that rate.
  17. No. Why would I pay off your mortgage? πŸ˜›
  18. While ballet is important, you really should vote too πŸ˜‰
  19. Recent Article: Opinion: Trying to find the most tax-friendly place to retire? https://www.msn.com/en-us/money/retirement/opinion-trying-to-find-the-most-tax-friendly-place-to-retire/ar-BB1aw38S?ocid=msedgdhp Where's the best place for me to retire? https://www.marketwatch.com/graphics/best-place-to-retire/?mod=retirement
  20. Blemishes don't paint a whole picture either πŸ˜‰ I used to have better links for comparing the tax burden between states... https://www.businessinsider.com/all-50-states-and-dc-ranked-from-least-to-most-taxed-2019-3 ^ creating something similar to that where you could punch in your income sources and see what you would pay would be cool. My property taxes are $3,500/yr alone... "Live in Washington, shop in Oregon" was a phrase I used to hear a lot in California from upcoming retirees. I know a few people who decided to move to Nevada for stretching their pension. Many folks I ran into during a Hawaii trip were former Californians.
  21. I'm trying to be less opinion-based by providing evidence from organizations. Misinformed speculation doesn't serve anyone. Being unaware of the actual bottom line impact(personal) and broader impact(society) of taxation also should be addressed. What's currently established is subject to change, so that does complicate long term planning. (lower taxes = smaller government = poorer pandemic response = the world we live in) How's that working out for you? How's that working out for everyone? For an individual, knowing how each of your retirement "buckets" are going to be treated by the IRS is important. https://www.forbes.com/sites/steveparrish/2019/09/10/the-secret-to-retirement-income-drawdowns/ In California, with CalPERS we have the option to meet with a rep to take a look at what our retirement income will look like (there are multiple options, survivor benefits, etc. which make it a complex thing to do solo.) Knowing what age to begin collecting from Social Security and your pension could be something to play with. Financial planners can run different monte carlo simulations to estimate what's best and incorporate investment accounts. This topic could be a great future 403bwise event.
  22. Luckily for those of us who don't know math, there's a handy table that breaks down the data: https://taxfoundation.org/joe-biden-tax-plan-2020/#Revenue Raising the top 37% tax rate to 39.6% would net $25.1 billion in 2021 alone. https://www.brookings.edu/policy2020/votervital/did-the-2017-tax-cut-the-tax-cuts-and-jobs-act-pay-for-itself/ The TCJA hasn't paid for itself, so increases(it's really just the undoing of mismanagement) are to be expected. https://budgetmodel.wharton.upenn.edu/issues/2020/9/14/biden-2020-analysis "Over fiscal years 2021 – 2030, the Biden platform would raise $3.375 trillion in new tax revenue while increasing spending by $5.37 trillion." Spending is a separate conversation from revenue. In terms of taxes for my household, I have no fear: I see significant upside for the country as a result of a change in leadership. If it costs me a few unnoticeable bucks, it's well worth it.
  23. https://taxfoundation.org/joe-biden-tax-plan-2020/ So if you are worried, you must be earning $400k+/yr in taxable income? That 2.6% increase in the top tax bracket... radical progressives sending our top tax rate back to those awful pre-2017 times. Sad. All to fund education, social programs, and government.... communist agenda confirmed πŸ˜‰ Each state taxes pensions, social security and and other stuff differently: https://www.retirementliving.com/taxes-by-state http://www.tax-rates.org/taxtables/property-tax-by-state http://www.tax-rates.org/taxtables/income-tax-by-state You could live in Wyoming and pay nothing, but then you'd be living in Wyoming, which is a choice few people make: https://www.worldatlas.com/articles/least-densely-populated-u-s-states.html https://en.wikipedia.org/wiki/List_of_states_and_territories_of_the_United_States_by_population
  24. Age: 38 (Same as you) My allocation is in the same index funds that make up the early stages of target date funds - typical four fund portfolio. I've maintained it at ~90/10 since moving to Vanguard in 2016. If you're contributing regularly, and well diversified, you shouldn't have a sense of FOMO. I own a little bit of almost everything and stick with it for the market gains and declines. My investing behavior has been the same whether the market is flat, up 20%+ or down 30%+. Stay the course 🀞
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