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whyme

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  1. Just saying amen to the other comments. Disgusted to see 5.50% "class A" sales loads on top of expensive funds and an advisory fee. This sort of sales arrangement was standard in past decades, but should never occur in the present: in my opinion, it should be illegal. Get your colleague away from this "advisor" now. There's no need for an advisor for these purposes, as others have said. But if she (or you) still feel the need for an advisor, make sure the person is a fiduciary who does not accept any commissions or sales fees. An hourly charge for services would be the best arrangement.
  2. Omar, you're in good shape. Vanguard is a fine option. (Calstrs Pension2 is also a decent choice if you want a "stable value" fund option. ) I want to second Ed's comments about the fact that you don't need a financial advisor to set this up (you may want to hire somebody down the road who can help with overall financial planning: insurance, wills, etc., but responsibly investing in a 403b is simple and you'll end up with more money by doing it yourself, even though there's a whole industry telling you otherwise). Vanguard charges a flat annual fee ($60?) to hold your 403b account; otherwise, the fund costs are very low. That is probably your best option if you expect to build up a 403b account of any size. Vanguard is also an excellent place to consolidate all of your accounts in retirement, so you'll have a head start on that (assuming Vanguard maintains its character). Your 70/30 three-fund plan sounds good to me. Increasing your contribution rate is also very good. You should aspire to "max out" the 403b.
  3. Krow and Ed are right on. Two small additions: 1. You may be able to get that list of vendors online, then you can come back here with it, avoiding the sales pitch. The list should show up if you follow "retirement" links on your credit union's website: maybe there'll be different links for 403b and 457. 2. You should also check whether your state has a government-sponsored option. Not all states have these, but where they exist they are often excellent.
  4. I'm pretty sure you are paying an additional fee to use the self-directed option ($50 year? I'm not sure). It's true that Fidelity, so long as you limit yourself to index funds, would cost a bit less: they charge just $20/year custodial fee, on any amount of assets. But the main key to success is what you are doing: consistently investing substantial amounts. You can fuss over the details if you want, but you'll be fine with your existing set up. Fidelity, Vanguard, Pension2, index funds, maxing out... that is an excellent recipe.
  5. Many retirees are in trouble because they tapped their retirement funds before retirement. People need to be educated to the idea of building wealth for the long term. (Obviously, "old" is relative, and there are those who plan to retire at 40 because they are unusually rich or unusually frugal, but for them, too, the need is for this money to stay put until a slow draw down--over decades--begins in retirement.) An emergency fund for potential current expenses should be amassed separately. If you meet the income requirements to have a Roth IRA in addition to your district retirement account, that might be a reasonable place to build a tax-free asset that could be pulled out in a pinch, but only if you aren't counting on it to fund your retirement years.
  6. ScottO: Just reading this now, but if it isn't too late: Why do you feel compelled to use the self-directed option in Calstrs Pension2? I no longer have a Pension2 account, but as I recall they offer a substantial selection of low cost options, including many Vanguard funds. I can't understand why the added cost and complexity of a self-directed brokerage window would be desirable in this case. Though Pension2 is imperfect and it would be nice to get rid of that .25% fee, it is one of the better 457 offerings available. PS: I envy your access to Pension2 in a 457 account. My district has a good selection of 403b offerings, but we are stuck with only the high-priced (most funds end up near 1.00% annually once their vig is included) Nationwide plan on the 457 side.
  7. whyme

    2019 Returns

    Thanks very much, Steve. Yes, I'm happy and excited to see the portfolio grow at this rate after so many years. Congratulations on your engagement news!
  8. whyme

    2019 Returns

    With my usual caveat that a calendar year is a very short-term measurement from which one can't really draw any conclusions: yep, this was an unusually good year for the portfolio. The increase of my 75/25 portfolio for the year is approximately 20%. This was the first year when the increase in portfolio value exceeded my gross salary for the year. I hope to be able to report that in coming years as well...
  9. Of course you are correct, Tony, that a portfolio of index funds at Vanguard or Fidelity (or index ETFs from Schwab, iShares or State Street for that matter) would be wildly superior to the high-cost insurance products and managed funds peddled to so many 403b holders. But I don't think we're having an argument at all, just a low-key conversation about changes at Vanguard and cost-cutting competition. We're assuming that fund costs do matter and that we are making DIY choices about our portfolios. I know that doesn't apply to everybody; the range of decent options in most 403b or 457 plans is quite limited. I don't think we're confusing or discouraging newcomers by chatting about this here, I certainly hope we are not doing so.
  10. I'm with you, Ed. Bogle had few if any peers when it comes to lucidity and wisdom. As to Vanguard's current management and loss leaders... I notice that today Vanguard has zeroed out commissions for stock and option trading, obviously in response to competition from Schwab, etc. So I guess we can't rule out zero ER funds from them, or free toaster ovens for opening an account, or whatever they think they need to do to preserve their market share. PS: https://www.cnbc.com/2020/01/02/low-fee-pioneer-vanguard-finally-joins-the-crowd-by-dropping-stock-commissions-to-zero.html
  11. Thanks for that info about the Fidelity funds performance. I suspect we’ve heard or read many of the same Bogle interviews. As I interpret him, he was against anything that promoted trading (this was his problem with ETFs).
  12. I'm not sure what you are including in "all that stuff," but if you mean actively managed funds, Vanguard always had those. Bogle took pride in their low costs (to date, Vanguard active funds are low cost compared to practically any other active funds on the market) and sober management techniques, including minimizing turnover and otherwise focusing on long-term results. There are other money-making add-ons post-Bogle, though, including a large fleet of paid portfolio advisors and a much larger overall number of funds. I believe that you are correct, Ed, about Vanguard's structure and philosophy re: each fund being self sustaining, so they are unlikely to offer loss leaders. (As we've discussed before, Fidelity is structured like a trap, they make it difficult to avoid high cost products and services once you are through the door.) I guess it's a matter of opinion whether funds charging a few basis points per year compete effectively with the ZERO funds. It remains to be seen whether the Fidelity funds actually do as well as the Vanguard equivalents: I think they use different indexes, and I'm guessing some behind-the-scenes stuff (such as securities lending) might make a difference at the fractional-point level.
  13. You are correct. According to the article linked below, the average U.S. retirement age (as of 2017) is about 60, the median is 62. Retirement planners advise working extra years beyond basic readiness, and those without a plan say they will work until they drop, but circumstances (health, family responsibilities or workplace changes) often make it impossible to work at a full-wage job as we age. https://dqydj.com/average-retirement-age-in-the-united-states/
  14. No problem on the repost, Tony! One thing that seems increasingly clear about Vanguard: they want their clients to move away from traditional funds and toward ETFs. Now they've built in a web tool to identify opportunities to transfer eligible funds to ETFs. It looks as if their ETF fees are going to continue to be a bit lower than those of many of the equivalent traditional funds. (I guess it is less costly for Vanguard to manage ETFs, though it is slightly more trouble for investors to rebalance or make regular investments in them.) Best wishes to all here for a healthy and prosperous year ahead.
  15. Kudos, Ed, thanks for sharing the good news with us.
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