Jump to content

DK

Members
  • Content Count

    158
  • Joined

  • Last visited

Everything posted by DK

  1. tony, I don't know what happens in that case because Lincoln is not part of the plan anymore. Just wanted to let everyone know to be careful of what is actually happening (contract exchange, rollover, etc) and to make sure that it's coded correctly so you don't have any trouble later on in the future. Judging from the original poster, it is not a rollover so do not do a rollover unless you have a qualifying event for distribution. The contract exchange, i believe, can happen as long as the investment provider that the money is moving into is part of the approved vendor in the plan and there's an Information Sharing Agreement. So, you can move money into an approved vendor but not into a vendor that's not approved anymore. Check with your plan administrator to see if its part of their rules for contract exchange. But based on what I see, it's definitely part of a contract exchange because no other type of transaction applies to your situation. Rollover must have a distributable event: age 59.5, separate from employer, disability, or death. Transfer is from one employer to a new employer. Anyway, double check with an expert to be sure. But I feel pretty certain though but double check.
  2. DO NOT do any rollover if you don't meet the distribution requirements. If you do, you will have really bad tax consequences. What you need to do is either a "contract exchange" or "plan to plan transfers". A contract exchange is when you move money within the plan from one vendor to another vendor in the plan. There is no tax consequences for this as long as you follow the rules. All that happens is that the money is moved from one vendor into another vendor and no tax form is generated. A "plan-to-plan transfers" is usually when you move your 403b money from one employer into another's employer's 403b plan. If you are with the same employer, you are most like doing a "contract exchange." Make sure that the transfer is coded correctly. Lots of vendors are not knowledgeable about it. My friend did a contract exchange from one vendor into another vendor in the same plan with the same employer. I told him to make sure that they know it's a contract exchange and NOT a rollover. The vendor that he transfer his money out of said that it will be a contract exchange. Guess what, months later and when 1099 forms went out, he got one. It was coded as a rollover. Contract exchange does NOT produce any 1099 form. Now, because of what happened, he would be on the hook for paying taxes on all that because he was not eligible for any rollover. I helped him and we talked to the vendor he moved the money out of. We talked to the supervisor and we told him that he did a contract exchange but they have it as a rollover distribution. They said that we were wrong and they were correct and that they did a contract exchange which is consider a rollover. We told them that if it was a contract exchange, that why was a 1099 form created? He said it gets created because we did a contract exchange and that's the just name for moving money from one account to another. We fought with him and told him that we will make sure that they are liable for any tax consequences. We repeatedly told this supervisor that he was wrong and he better go check with someone who has knowledge of contract exchange. Anyways, he got back to us in a couple of days and left a voicemail all apologetic. He said he consulted their tax attorney and that we were right and he was wrong. He said their attorney said that because the 1099 form was already generated, they will send a correction 1099 with all $0 so that rollover was $0. Then they went and corrected the coding so that it's consider a "contract exchange." This all happened before he did his taxes and they knew once he did his taxes, the IRS would come after him for the taxes on the distribution. Another thing, the form he filled out to do the "contract exchange" was a "contract exchange" form too. I don't think lots of people know about "contract exchange" since it doesn't get done as often as rollover.
  3. DK

    Q1 YTD Report

    25/75 equity/bonds -5.7% for the quarter.
  4. I just deposited $12k ($6k for 2019 and 2020) into my roth ira account. gonna take advantage of this crash. I'll be putting $1k into an equity mutual fund each week over the next 12 weeks. if it goes down, great!! I get to buy low.
  5. Ok. I did something that I should not have done. I switch over to 25/75 stock/equities back in December from 80/20. Afterwards, the market kept going up. I was shooting myself in the foot but than the coronavirus happened and the stock market tanked. So, now I'm down 0.17% for the year instead of 7% if i was in my 80/20 portfolio. I GOT LUCKY. I only switched because the market just kept going up and everyone was greedy, which made me cautious. I was expecting a correction but didn't know when. Again, LUCK. I will probably not do this again. I will switch back to 90/10 in the near future but in progressive steps until I reach 90/10.
  6. “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” Warren Buffett. I'm going to buy, buy, buy.
  7. Agreed with the Target Retirement fund
  8. 85/15 split. Down 8.5%
  9. DK

    Potential crash?

    I used to be 100% stock for years until a year or two ago when I switched over to 90/10. I moved over to 85/15 since the bull market was going on for too long and I just felt cautious. I just wanted to be prepared in case what's happening now happens. Plus, I'm getting older and a year closer to retirement. 😉
  10. DK

    Potential crash?

    I'm just glad I changed my asset allocation at the beginning of this year to 85/15 equity/bond. If the market goes down more next week, I'm moving half of my bonds over to equities. If it continues going down, I'll move the other half of my bonds to equities. I'm in the process of maxing out my ROTH IRA for this year. Just waiting for the money to transfer over any day now. Then, hoping the market continues to go down, will max it out again for 2019. For young folks, this is a great time to buy as it is going down. Love to buy when it's cheaper. To quote Warren Buffett, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
  11. DK

    Potential crash?

    Yes. Stay the course. I have not done anything but staying the course. It could go down more but it could also go back up. I have no idea what's going to happen so I'm not doing anything.
  12. My 90/10 asset allocation returned 19.5% in 2017.
  13. Hi, A friend of mine brought up a couple of questions for contract exchange. He wants to move his balance from two approved vendors to another approved vendor and I told him that is considered a "contract exchange" since all 3 vendors are approved by his district. He asked me about tax consequences and I told him there should not be any. He then mentioned something about the vendors needing to have information sharing agreement on file with the district, about distribution restriction needing to be the same, and balance before and after the transfer needing to be the same. Otherwise, it will be taxed as ordinary income. So, if a vendor is an approved vendor for the district, doesn't that mean they have information sharing agreement on file already for them to be an approved vendor? What's this thing about distribution restriction needing to be the same for both vendors? As for the balance of his account being the same before and after the exchange, what happens if he already contributed to the new vendor? If he transfer his balance over, wouldn't his balance be more in the new vendor than the old vendor since he already started contribution before the exchange? I'm trying to get him all into Vanguard. He first started with Nationwide. Then stopped that and was using Pension2 until recently. Now he is contributing to Vanguard. I'm trying to get him to transfer it all into Vanguard but he's afraid of it being taxed. Thanks
  14. Looking at the expense ratio of the admiral shares compare to the investor shares, it looks like I will be saving an average of 11 basis points. With the $60/year fee, I'll still be saving about $100 per year for now. But when my portfolio grows in the future, the cost saving will be way more.
  15. Sweet. I can't wait. ADMIRAL SHARES!!!!! So excited
  16. Agree with everyone's post above. Showing our ytd return and assets allocations shows people how with riskier allocation will provide more rewards and other useful information. If you look at target date fund, you can probably match what has been posted here to how similar it performs with target date funds. For example, if you look at Vanguards Target date funds by retirement year, you can see the ytd return decreasing for retirement years that are near.
  17. Just keep it easy. [(Total Balance ytd) - (Balance at beginning of year + total contribution ytd)]/[(Balance at beginning of year + total contribution ytd)] = ytd return %
  18. I have 90/10 stock/bond that has a ytd return of 10.6% 40% is foreign
  19. lol. This happened to me too. These guys from AXA came to my school. They approached me asking about saving in a 403b. I told them I have Vanguard already and I'm good. They mentioned that I was probably there for the low fees but then asked if I was meeting with an adviser who can help me out by giving me advice and all? I told him I didn't need any adviser to tell me how to invest. I know exactly what I am doing as I have done my research. I even mentioned that if I wasn't a teacher, I would be a financial adviser instead since I enjoy the world of investing and helping others.
  20. Someone should double check the information on the website. For example, if you go to fees under Vanguard, instead of being $15 per fund; it says 15% per fund. If I saw that and didn't know about Vanguard, I would not sign up for that.
  21. For me, the 403bcompare site doesn't list Vanguard as my provider since (I'm assuming) my TPA hasn't updated it yet but I did ask my TPA directly and they said Vanguard is available for my district. They even show me the list of vendor for my district when I looked on their computer screen when I went in to see them. The link you provider in question 3 for enrolling in Vanguard doesn't seem to work if you have a TPA. I might me wrong but based on my experience, I needed to fill out the 403b enrollment paper form that Vanguard has posted on their website. It is here if you need it: https://personal.vanguard.com/pdf/0020.pdf?2210123018 On the Vanguard form to open your account, it does ask for a Plan Identification Number. The number is district specific. For me, this was a pain to get. I called my TPA and they didn't know what I was talking about. Then I called Vanguard and they referred me back to my TPA to get the information. Then I called my district which referred me back to my TPA. So I called TPA again and told them everyone was referring me back to them to get the ID number. I got bounced around until one person was able to get the number for me. I then tried it out on the website you listed to enroll but it didn't work so I had to fill out the form I listed for you there. You need to establish this Vanguard account first before the SRA can be done otherwise, there's no Vanguard account for the money to go into. I think the code number they ask for is vendor specific so you'll need to figure out what that code is from Vanguard. Hope this help somewhat. Let us know how it goes.
  22. The new 403bCompare site is here!!! It now allows you to search by fees and average expenses. Check it out.
  23. I tell people who are scare of doing their own investing to just put 100% of their contribution into a vanguard target fund and just leave it there
×
×
  • Create New...