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Engine66

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  1. Good article Steve. I guess I'm more conservative than average. My plan has no fees...if they are, they are outside the yield. I initially was unsure about the yield vs interest rate because performance is listed vaguely. I guess the returns are yields, not rates. No fees. My particular fund was created 8/07...it's brand new since Nationwide revamped their offerings to our agency. Should I go back to the T. Rowe? It's lost several percentage points since last post...I imagine it will come up again, but the economy is not in it's best suit right now...rather have a solid than ? mark if you know what I mean. A small bird in the hand means I still eat...but I might miss out on that fat turkey later huh?
  2. Hi steve, I appreciate the info. Is that T.Rowe not a good plan....seems like Morningstar likes it. Anyway, my current plan according to the Nationwide rep is yielding 4.89 %...not guarenteed forever, just this quarter. The guarenteed rate is 3.50% for this stable value fund...it just happens to be performing better this quarter and will most likely go down to about 3.9% yield. So using your rule of 72...looks like I'm going to double closer to 18 years give or take a few depending on performance. One other question yields/performance...the nationwide verbiage is not specific if this is an APY or an interest rate...makes a difference according to the calculators. Do you know? The statements make references like "performance figures below...blah, blah, blah" and then shows the numbers. Are these yields or rates? Thanks for helping out...I wish I started educating myself a long time ago rather than now.
  3. Hi Steve, Thanks for the input... To answer your questions: 1) T. Rowe is a new option for our plan...it had not been offered previously by Nationwide to our department and it appealed to me because I did not have to pick from all these previously offered options with all these big cap, small cap, specialty stocks, etc....things that I did not understand. So the T. Rowe seemed appealing in speaking with some of my peers. I tried it and felt uncomfortable with the ups/downs...I simply was not used to that. When I saw my deferrals not adding actual increases in my balance, but increases in shares instead, it just didn't make sense at the time. Now I am understanding more and better appreciate how this plays out over the long run. 2) My goals for the 457 were to lower my taxable income which has gone up over the years and that is helping. My target $$$ amount was $300K and I will reach this even in the stable otion fund. The function of this fund is more to cover any unexpected curveballs during retirement and add a cushion to my pension. My pension will be sufficient to cover my expenses as I will be downsizing and paying off certain debt prior to retirement, so the fund does not serve as ###### of income, but just extra available resource. 3) Stable option fund has no fees whatsoever and is currently paying 1.25% per quarter...minumum rate is 3.50 per year, but a Nationwide rep told me it is currently paying 4.89 annually at the current moment...adjusted each quarter to the market. No risk to the principal either. The Nationwide offerings changed late last year for our department after much complaining about their offerings, fees, employee confusion to the plans, etc. They revamped their program for us and so I gave the T. Rowe a try. I'm open to learning more about all of this. In the end, no matter what my balance is in the 457, it will be taxable and any kind of substantial withdrawal will change my tax bracket and the Alternative Minimum Tax will bite deeply the more I withdraw. So this account will be used sparingly...help out with medical expenses, etc. I will not live off of it. On the other hand, I don't want to be stupid with the allocation either. So far, I'm ok with approx 4% growth, no fees, no risk and ability to know exactly where I stand. That helps me sleep better...some of my friends can't sleep as they have seen downward slides in their accounts and pray the future brings them back up. Other guys I know don't care at all...they figure any gains they lost was never theirs anyways. I guess there exists a lot of psychology to the market and the more I understand, the better off I may be. Thanks in advance for any education/experience you can share.
  4. This is my first visit/post to this forum...read some other threads and thought I'd ask a question for some of you who are more knowledgable than I. I am in the fire service and have Nationwide as the 457 provider. Our provider has changed over the years as well as the investment options. We had PEBSCO, NACO, etc. Anyway, back when the market tanked in the dot.com era, I saw losses that made me shy from riskier investments. I moved my $$$ to a fixed account and it stayed there ever since this month I moved to the T.Rowe Retirement account 2010 (PARAX)...however, I saw so much volatility...down $1200 the first day, up the same the next, then up $400, then up again $800, down $400, etc. I understand the risk vs benefit and the advice not to look at the account, but I looked to educate myself to how the market was behaving. Here's the question...I have 145K so far and moved it back to a "Stable Option" fund which is performing at 1.25% per quarter and bares no risk to principal, however, the T.Rowe (PARAX) is rated 5 stars by Morningstar and performed at 6.65% over the last few years (after a .90 fee), but can affect principal. Should I get back in to the T. Rowe or stay in the "fixed" account? I'm not a big stock guy...just a fireman putting the max aside for a decent retirement fund to augment my pension. I have 6+ years to go before I turn in my badge and play things conservative. I'm fun at Vegas, but not a big gambler. Any advise you can share? Thanks.
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