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sschullo

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  1. You didn't say why you want to do this? Do you think you are going to get a higher return in the market by reinvesting the added benefit? I would stick with your benefit plan. The vast majority of so-called non-fiduciary financial advisers would highly recommend that you accelerate because we all know why! They want to manage that fund for you. Also, the benefit decreases to about half for option A and about 2/3 for option C! That's a huge decrease. Here is where it might make sense for someone with a lucrative pension benefit such as an administrator. If you had 40 years service and had a lucrative pension benefit, acceleration might be a way to lower your income taxes in the future by converting the accelerated money into a backdoor Roth. But this is assuming your benefit is tax-deferred (mine is) and you can convert that money into a Roth (not sure of the regulations).
  2. Thanks Moe, Great meeting you and talking with you last year. Wish we in the advocacy community could meet more often. The FIRE people are meeting all the time. BTW, we just found out that we are going after being on the waiting list!
  3. I get a flat $72.00 per month increase every October. The calculation is 2% times your first benefit payment, and it's fixed forever.
  4. Therese, You wrote: "I'm new to this whole finance thing and It's like a foreign language to me." My esteemed colleagues all want to help you, and you are lucky to have come here to get their wisdom. As this discussion thread has progressed, I may be overly concerned, but FWIW, you don't have to know all of the minutiae of investing right out of the gate. As you said, it is a foreign language. And as Ed said this is getting complex, with words such as qualified vs unqualified, capital gains, ordinary income, roth vs IRA, tax brackets, etc. YIKES! I have a headache. You asked good questions to get you started on the right track by avoiding financial advisers and coming here. IT IS A LOT! Just leave it at that for now and don't be concerned about the perfect portfolio with all of the "t"s crossed and the "i"s dotted. Steve
  5. Hi Thewin, Welcome to the forum. You know more than you think. I agree with all that Tony and Ed already said. What I would add and what you can do right now is start contributing to Pension2 from CalSTRS. Here is the link: https://www.calstrs.com/pension2 Call them up and tell them what district you work in and they will tell you if it is available to you. Trust nobody else except Vanguard and CalSTRS Pension2 people. We have all been where you are at. In fact, I was in a worse situation than you with two horrible fixed annuities. I was a little older than you when I paid $6000 in surrender fees to get out, and I am soooo happy I got out. Made it up in real investments, stocks and bonds index funds. Steve
  6. I agree that the current system sucks for the vast majority of employees. It's way too expensive with many inappropriate investments even some 401k plans. It's expensive because the system is a pot of gold for the financial industry, not employees. However there are exceptions, those of us who educated ourselves about these plans, how to create a diversified portfolio, watch those costs and understand how this thing called the stock market works, and do all of this without an expensive adviser, then these plans are excellent.
  7. In case viewers missed this on the home page: https://reason.org/commentary/california-teachers-may-need-help-to-avoid-retirement-savings-traps/
  8. Well said, Gerry, Welcome back, it's been a long time! I was disappointed you were not able to be in the Playing With FIRE documentary. Scott told me you were in Mexico during filming. I went to one of the FIRE meetings, and not all are filthy rich brats that make huge amounts of money. And so what if they were? Everyone has their version. Some will quit their paying jobs in their 20s, but others as late as their 50s. It all depends. Not all are eating rice and beans or back living with their parents (it was temporary in the documentary). Its the principles of rejecting the consumer culture, living with less stress and material things, and enjoying life with family and friends, and giving back so that the world is a better place. Those are great principles everybody should support. I am reminded of the cliche in Alcoholics Anonymous "Principles above Personalities". I always remember that it's not so much how much you make but what you do with what you make. Heck, I didn't earn much money until I was in my 40s, as a teacher hustling to increase my salary with extra workshops and classes. Steve
  9. We all LOVE your idealism but the financial system has no infrastructure so you can offer financial advice and services for teachers at a low cost. We have a very low cost 457(b) at L.A. unified and the record keeper can only field two agents! They get no commissions or other financial incentives. Our committee which thinks just like you deliberately constructed a very low-cost portfolio of Vanguard and other indices with very low costs. Unfortunately, while we have an Award Winning 457b plan, very few of the 50,000 district employees know about it because there is zero money for financial workshops and to field more reps to talk with teachers. Our third party administer cannot sell any of their expensive products, so they are NOT making much money at all. Meanwhile, on the 403b side, which we have little control, the record keeper, the agents, and the broker/dealer advisers are making lucrative salaries and commissions. As you found out, teachers have no idea they are in a hideously expensive plan. The adviser world has changed. They are finding out that commissions don't pay as much as assets under management. So that's the AUM (or retainer fee) is currently the new business model. There are many great financial advisers who are also fiduciaries and are making the financial world with the 403(b) so much better. But in addition to the hourly fee, they charge an AUM fee up to 1.00% or higher which is superfluous if the teacher has all index funds. As you know, index funds don't require an expensive manager. So, IMO even these ethical advisers would greater improve the financial conditions for all K12 educators if they charge .50% or less. More than .50 AUM almost puts them back in annuity territory. However not all is lost, buy Scott D's book Wild West: Providing Fiduciary Advice to Public School Employees, He shows you how you can supplement your income by consulting and other gigs as a CFP adviser. BTW, I am told earning the Certified Financial Planner (CFP) designation is not easy. But it's a must if you want to be a genuine fiduciary.
  10. Google Matt Lyon's name and there is lots of information about him.
  11. Follow Stephen Baughier on his facebook page: https://www.facebook.com/stephen.baughier Specific information found here including the lineup of speakers: https://www.eventbrite.com/e/campfi-southwest-2019-oct-11-14-columbus-day-weekend-tickets-49212446753?aff=erelexpmlt He is the coordinator. We got to know him well last summer. Tell him you are a friend of Georgiana and Stephen. I'll PM his email.
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