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Newbee

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  1. Newbee

    Clueless

    Hi guys! Thanks again for all the advice. I really do appreciate the links especially and I will be sure to check out Malkiel's book also. It really helps to be directed to a specific source and the more I read the better I get to know this material. I'm sure I'll be back again when I have more questions stored up... Until then, NewBee
  2. Newbee

    Clueless

    Hi again Thanks for all the advice. Most helpful is the recomendation to look at TIA-CREF more closely. I also did get the feeling that I would need to look at meeting with a financial advisor, I just feel "out of my league" when speaking to finance savvy people and hate that feeling, as I am not used to it. BTW, the only assumption that I think is hilarious is that I am male - I'm actually female! So anyway, the deal is that the University will put the 10.42% whether I contribute or not. So, I could put nothing and they will still put that % away. I think that in all likelihood I will match that money up to the 15,500 that I am allowed. I think that I will PROBABLY also elect to do the 457 thing, although I do need to read a little more about that. Also, I was under the impression that I could still contribute to my IRA, just not as a pre-tax contribution, but that my earnings would be untaxed on that initial investment. Don't know where I got that idea. The 2 reasons that I have been so reluctant with all this is that there is a part of me that wants to keep on living at my current salary lifestyle (48,000). Then, use the rest of the money to pay off the med school loans. I look at those stupid webpages every day and when I see that a loan that I took for 9000 dollars will equal 19,000 when I am done paying it back BURNS me up. So I want it gone. Second, the whole IRA being run for me has given me a feeling of dread when it comes to talking about this issue. My father and I have had some strong conversations about this. Unfortunately, like another post here, my dad, also an immigrant, put three kids through college, stay at home wife, etc, so his decisions carry a whole lot of weight in the family - and, also with me. But sometimes, I wonder if he is NOT always right. Plus, my fiance, who is also a physician, is just CRAZY. He doesn't agree with my investment planning at all. His issue is that he has seen me borrow (interest free) from my dad, brother, him at certain times, like for exam fees, or whatever, and he gets irritated because he sees the money in my IRA as useless since I can't access it. He wanted us to go on a trip to Europe before August and I dont have the cash to do that and so I said no. Well, he thinks neither of us should contribute in addition to the 10.42% of the employer at all. He keeps saying, "What if we need that 15,500 in cash money?" "What if we get cancer and never get to spend it?" Fianlly, my BIGGEST concern when it comes to money and being rich and burning through it is NOT how I will live but the effect that it will have on any kids that I have. I really think its all about how you grow up. Thanks! NewBee
  3. Newbee

    Clueless

    Hi! I need some help and I found this forum on the internet by googling the term 403b. So, I spent some time and have been reading through the posts and hope that I have learned something. I need some advice, but I think it may be frustrating for you guys because I am a little new at all this. Here is the deal: I am a physician and I will finish training (fellowship) June 30, 2007. After med school, I did 5 years of residency and 2 years of fellowship in surgery and I am now going to get a 'real' job, making real money. I took out loans in college and med school. That amount is around 120,000. I have been repaying that. for around 4 years and have consolidated that. With the salary that I have been making, paying these loans, paying other expenses, I have not saved much money. What I did save I put in an IRA, where I have around 15, 000. About 6900 is cash in a money market acct. The rest has been 'invested' for me into stocks by my dad. These stocks are GE, Lucent and Motorola. I didn't really want to invest in these things, but my dad argues that I cant just have the money sitting in an acct and I need to invest so it can earn something. I was against that, because in residency I had ZERO time to watch these investments. The result has been that he fiddles with it once in a while and I have no idea if it is right or wrong. So I bought a book and I have been reading on the internet with the idea that when I graduate I have some time off so I will devote myself to this issue and move that money around to whatever investment I want. Well, the problem is that I will be working for a university in Florida. Part of my contract includes enrolling in a retirement plan. They want me to sign this form and so I thought some other opinions might be useful. They say I must enroll in a program called the State University Optional Retirement Program - it is not optional for me. This is a 403b - Defined contribution plan. They say that the vesting time is immediate. The employer will contribute 10.42% of my gross pay. My pay will be 200, 000, with probably another 20,000 max from on-call pay. I can contribute up to 10.42% also apparently. I guess this means that I will be taxed on 220,000 minus 10.42%. I think from my reading that there is some max amount I can contribute to this each year or that is I can't just put all of the 10.42% away pre-tax. They also say that I am eligible to contribute to a 457 plan. Okay, so within this plan they have a form where they want me to break the employers 10.42% down between 5 marketing companies. These are ING, AIG - VALIC, Jefferson National, Met Life investors, TIAA - Cref. They also want me to break down the 10.42% that I can contribute between these 5 companies. I called the hospital fringe benefits rep and he recommended I meet with a rep from each of these companies to make a better decision. My questions are: 1. Should I be contributing the 10.42% from my salary also? Or I should I put into my IRA? Am I even allowed to put into my IRA anymore? I think I should contribute to match the employer. 2. How do you know how to break down between the different companies? Then, once you pick a company, how do you know what product to buy. On the state of Florida websites they have links to all these companies. I went there and I HAVE NO IDEA WHAT THEY ARE TALKING ABOUT. Example: The AIG-Valic website has a performance sheet. They give a bunch of names followed by a whole buch of numbers. Core Value Fund(American Century), Large Cap Value Fund (State Street Global Adviser), Vanguard Windsor II Fund, Large Cap Blend Core Equity Fund (BlackRock), Lou Holland Growth Fund [70], Social Awareness Fund...There are many, many more. There are 19 names just in this one company! 3. What if I make a mistake, get the wrong thing and later change my mind. Will I have to pay to change? 4. Should I get a financial advisor? One of the senior MD's I work with told me to get a financial planner and that it was the best thing she ever did. So, I called the director of my program in Florida for a referral and she said she just fired hers so she couldn't tell me anyone! Great! 5. I read here that meeting with a fee-only hourly advisor was best. Should I do that when I get to Florida? How do I then make a long term relationship with that person? My problem is that I don't trust anyone. I feel like if I screw up at least I can only blame myself. 6. Should I contribute to the 457 plan? I think I should, right? 7. One of my friends told me that none of this is really that that good for me since I will be a 'highly-compensated' employee so i should not get my hopes up and try to play the stock market more. GREAT! I don't think that I am going to change my habits 100% when I am out of training. That is, I will not be checking the stock market every hour between surgeries and calling a broker like some surgeons do. I dont want to 'play the stock market." 8. Should I get rid of those stocks in the IRA and do something else? Okay, sorry I am so unknowledgable. Thanks in advance for whatever sense can be made from this nonsense newbee
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