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  1. True that some would object for ideological "small government" reasons, others because they represent the entrenched players (often attached to direct financial support for their campaigns), but it isn't clear to me that such opposition would be anything like universal on the right. In 2014, Marco Rubio promoted expansion of TSP availability to those who don't have access to existing 401k-type plans. Not exactly your universal TSP/automatic enrollment proposal, Ed, but I think that is a piece of evidence that (some percentage of) conservatives would embrace (some version of) expanding TSP access. Even right wingers who want "right to work" (i.e., union busting) laws and who want to dismantle or privatize social security seem ok with privately owned tax-privileged retirement accounts.
  2. I think the data is clear that people in general save more when the process is automated and by default. (Or mandatory, as in the case of pension contributions.) So that probably needs to be taken into account when reforming the current mess. The ideas here for simplifying and opening up the tax-privileged retirement options, e.g. anybody can direct the full maximum into an IRA, or making the TSP a universally available default plan, are sensible and workable. They would be politically very popular, I think, across most if not all of the ideological/cultural divides in the US. The problem is the money that the existing financial services industry will use to pay lobbyists to stop such changes, to fund friendly congresspeople and to launch misleading fear-based advertising campaigns (think of the TV ads against the fiduciary advisor rule). As with so many other issues, the corruption of democracy by the current funding system (essentially, legalized bribery) stands in the way of reforms that are unambiguously in the interest of the citizenry at large.
  3. This may be behind a paywall. In case the the link doesn't work, the first bit of the article is pasted below. https://www.nytimes.com/2019/06/07/business/fire-women-retire-early.html? By Charlotte Cowles June 7, 2019 Kiersten Saunders stumbled upon the FIRE movement — an acronym for “financial independence, retire early” — the way most people do: by reading about it online. But also like most people, she couldn’t relate to its membership, which seemed largely white, male and based in Silicon Valley. “When I first started looking at the FIRE blogs, it was a bit of a culture shock,” says Mrs. Saunders, 34, a marketing director in Atlanta. “As a black American and as a woman, I knew that I wouldn’t be able to replicate exactly what they did.” FIRE disciples have a reputation as overworked millennials, usually with the word “software” in their job titles, who stockpile 50 percent or more of their six-figure paychecks so that they can quit cubicle life in their 30s. While hyper-frugality is hardly new, the concept recently acquired its catchy name and a cult following on Reddit forums and popular personal finance blogs like Mr. Money Mustache and Early Retirement Dude, both of which are written by white men. Many adherents get competitive, posting monthly spending reports online as they race to hit their FIRE number — a chunk of assets that will theoretically generate enough income through dividends and interest to support them for the rest of their lives. A central tenet of the movement is that with enough grit, financial savvy, and willingness to eat rice and beans, “anyone” can do it. But that’s simply not true. “A lot of FIRE blogs, while well intentioned, can be very tone deaf,” Mrs. Saunders says. “They have these lean plans that are like, ‘Oh, we live on Soylent and frozen burritos, and that’s how we’re able to save 50 percent of our income.’ And it’s like, ‘O.K., but what about the other things that life sometimes requires? Where’s the budget for taking care of your mother-in-law?’”
  4. Amen, Ed. Your voice can provide a valuable counterpoint to those tendencies within the FIRE movement.
  5. I agree, Ed, I don't think it is a real plan, more of an evangelical polemic for belief in his version of FIRE. I'm all for saving aggressively toward financial independence (not necessarily "early," though that's ideal if you can manage it). But some FIRE advocacy strikes me as severely out-of-balance. It promotes an almost cult like us-against-them tone (pretty sure that I'd be labelled as an enemy from "the woe-is-me, whiny-heine crowd"). It dismisses basically all other priorities in pursuit of a nest egg, and uses dubious assumptions while doing it (I hope none of his readers are actually counting on a consistent 10% annual portfolio return). "With a little frugality, two teachers should be able to live on $24-30k a year." Maybe, if you want to relocate to Statenville, Georgia, as the author advocates. But if you want to live near your family or an established community of friends or you value the cultural offerings provided by big cities or you make international travel a priority or you are committed to providing for charitable groups or family members in need or... well, you get the idea: there are many goals, values and pleasures in life, and ruling them all irrelevant in favor of frugal living in the rural south is far from a universal answer.
  6. Just reinforcing what Ed and Tony have been saying: you can cut through this thicket without a scholarly review of the literature. Were you to do the research, you'll find that the data is unambiguous: a buy-and-hold portfolio of low-cost broadly based index funds is likely to outperform the great majority of other approaches while minimizing the risk of permanent loss that can come from concentrated "bets" (such as individual stocks). There is no realistic way to identify the highest-performing future investments (and there are myriad ways to lose money trying), so the goal is to find a simple approach that will capture overall market returns. Index funds offer that approach. There's just one significant allocation decision you need to make: the proportion of stock funds (more volatility, expected higher return) versus bond or "stable value" funds (lower expected return, less volatility). The main thing is to stay the course--it could be disastrous if you pull out of stocks in a panic when the market takes a dive, as it will from time to time. If you are unsure about your tolerance for roller coaster markets, start with 60/40 stocks/bonds. As to your 403b/457 plan, I suspect you have a benefits or fiscal services department where somebody can simply answer the question about whether the state 457 plan is available to you. If it is, that's your choice, set up the account and folks here can help you to identify the fund(s) to purchase. If the answer is no, follow Ed's instructions on using Aspire; it's a little more expensive, but you'll still be fine. I agree with Tony that financial planners can offer a valuable service, as is true for accountants and estate lawyers -- the problem is that (especially in the 403b sphere) there are many of what Ed aptly labels "advisors," in contrast to actual financial planners who will work in your best interest. "Advisors" are salespeople (usually brokers and/or insurance sales) who may be well intentioned but who have a fundamental conflict-of-interest: their job hinges on selling you products that will financially benefit them, through commissions, bonuses, etc.—these are virtually never the best option for you, sometimes they are truly bad investments. The financial planners you may someday want are fiduciaries whom you will probably pay on an hourly or flat-fee basis; they will look at your whole financial picture, planning for family expenses, large purchases, retirement scenarios, Medicare, insurance needs, etc. They may be expensive (again, think lawyers and accountants). I'm a reasonably sophisticated DIY investor with a relatively simple situation (single, no kids). But I intend to seek out a professional to review my plans and assumptions before I retire, just in case I'm missing something. However, my sense is that you don't require that service to set up a retirement investing account now.
  7. I found this NY state 457 plan: https://www.nysdcp.com/iApp/tcm/nysdcp/about/index.jsp They have some ultra low cost passive options (this is a good thing!) amid some higher priced funds. If you stick with the "New York State Deferred Compensation Board Equity Index" funds, you'll be in a great situation. (ER on their broad market funds are as low as 0.01%, absolute rock bottom cost.) I haven't looked deeply enough to know whether there are additional fees attached, but I would definitely check whether I was eligible for this, were I in your position.
  8. I have no experience with Aspire, but I have seen it mentioned on these forums as having relatively decent options. I would investigate them, first. (Hopefully someone familiar with Aspire will jump in here to offer a bit of guidance.) Most of that list can be quickly eliminated from consideration: for starters, cross off all of the insurance companies. There are a few names I don't recognize (GWN, for example), but unfortunately so many of the providers in that industry are high-fee (and worse) I think you need to presume them guilty unless shown otherwise. You might also want to ask whether you have different options available if you open a 457b account. It is also good to find out whether your state makes some kind of defined-contribution retirement savings plan available to you inside a 457 or 403b account--those state plans are often excellent, but not all states have them.
  9. Tony! Glad to hear all is well.
  10. I just called Vanguard and authorized them to convert some Admiral funds to the equivalent ETFs. No cost, quickly accomplished, the transaction is at net asset value and they can convert 100% of the fund, including fractional shares (on both sides of the conversion). In a taxable account, there is no taxable event in the course of this conversion. It looks to me that Vanguard is going to favor ETFs going forward (the new lower fees; I'm also remembering how they converted all of their accounts to brokerage accounts awhile back), so I'm getting with the program (so far just in part). The cost advantage is very small, so I did this out of curiosity about how it works more than visions of future riches. Bottom line: nobody needs to make that switch, but if you do want to swap into the equivalent ETFs, it's easy.
  11. For long term holdings in an IRA, I don’t know of any significant disadvantage to ETFs. There’s just the minor bother of having to purchase whole shares when you bring in new money, which sometimes leaves you with a few dollars you wanted to invest lingering in your “sweep” account. My own Roth IRA consists mostly of Vanguard ETFs, plus a bond fund that I usually drop those stray bits into.
  12. 2 cents more from someone who has never been in your position, LGB. My perception is that the only time one would even consider touching 403b funds (other than as income in retirement) is for a genuine emergency that cannot be addressed another way. (Maybe taking some out for a house down payment would make sense in some cases.) Basically, that money should be off-limits before retirement—I'm sure you don't want to have to look to your son for financial support during your retirement years. Ed is correct that there are some public universities that offer grad degrees for a relatively modest cost and those are worth considering. I have no idea what field your son is entering, but speaking as someone who has taught in grad programs at several universities, it is often the case that students who have been out of school for a few years are the ones who make the most of graduate training. Again, I don't know whether this fits your circumstances, but two or three years working (ideally, working in a related field) could potentially be a good solution: he could save money during that period; possibly he could become independent for tax purposes, increasing his eligibility for financial aid, and he is likely to enter grad school a more mature person with a clearer sense of what he wants to get out of post-graduate training.
  13. In a 457 or 403(b) account, there is a good chance you do not have the option of choosing ETFs. In an IRA account the practical distinctions are small (as far as I can tell) and you are likely to do well with either. One advantage to the traditional funds is that you can purchase fractional shares, so you are able to immediately invest your entire amount of available cash, not dependent on share price. Another advantage is that you buy and sell the Admiral funds at net asset value, where the ETFs are subject to additional market fluctuations and bid/ask price spreads.
  14. Hmmm. After this evening's update, the Admiral Funds still show the higher expense ratios. And the announcement of this round of price cuts from Vanguard does not mention the traditional funds at all, it strictly addresses ETFs. https://investornews.vanguard/lower-expense-ratios-on-21-vanguard-etfs-means-more-savings-for-you/ PS: There is a thread about this at Bogleheads forum. Consensus there seems to be that ETFs cost less to manage, so Vanguard is passing on the lower costs for ETFs with no intention of matching those cuts on the traditional fund side.
  15. Good call. Obviously, the advice would have to be based on whatever simple low-cost option is available, though it sounds as if jebjebitz is concerned that including a specific suggestion in the initial note might backfire.
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