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sschullo

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Everything posted by sschullo

  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.
  12. Thanks Tony and Dan, We can learn about organizing for our advocacy by connecting with the FIRE movement. One of their many life-affirming ideals is to require financial literacy in our schools. I mentioned Tim's name to the director and he never heard about Tim Ranzetta's Next Gen Personal Finances. Wow! That's a connection that would be awesome. These young people get it. They are not going to follow the borrow and spend generation. They were negatively affected by 2008 seeing their parents and friends struggle financially, and they are saying there must be a better way to prepare and taking 100% responsibility. Everything is AWESOME!! PS: Dan, the next CampFI conference is returning to Joshua Tree in October and it is been sold out for weeks. Georgiana and I are on the waiting list. This is last years attendance. Nancy of Moe is also there. Steve
  13. Pushing up. Register today, June 18 and 19 is in a week!
  14. Don't I look like an Associate Producer! LOL! Georgiana is with Taylor and I am with the Scott and Taylor! The connection with teachers is the fact that teachers have a pension. The vast majority of the FIRE group have no defined benefit plan. Its all defined and after-tax contributions with the Roth.
  15. Wonderful news! June 1st was the documentary premiere of Playing with FIRE in San Diego. Georgiana and I had the privilege of meeting the stars, the executive director and the director in the documentary because I donated some $$ for production expenses. I was titled, Associate Producer. LOL! I read their book, their gurus books, and watched the documentary with a sold-out crowd of 250. It takes a lot of guts to change from a high spending young couple to a more frugal lifestyle and be public about it. They are on track to reach financial independence in about a decade when they are in their early 40s. These young people in the FIRE got it right out of the gate which took me almost a lifetime to get myself straighten out. However, I was naturally frugal and knew that material things do not make people happy at a young age, however, I was not a naturally born investor until my 50s. Despite it all, I still retired a little earlier than most of my generation. The FIRE folks have already invested in Vanguard low-cost index funds. And they know that material things don't make people happy. We complain that our friends and relatives have no interest in personal finances while these young people take it seriously and ARE doing the right thing at a young age. As I have said before on this board, I have a lot of respect for their courage to go against the consumer, borrow and spend culture. Steve https://www.cbsnews.com/video/f-i-r-e-savers-behind-the-trend-of-aggressively-saving/ Here are the remaining premieres Washington D.C. Thursday, June 13, 2019 6:30 PM 8:30 PM Seattle Monday, June 24, 2019 6:00 PM 9:00 PM New York City Thursday, June 27, 2019 6:00 PM 8:00 PM Atlanta Saturday, June 29, 2019 5:00 PM 7:00 PM Detroit Tuesday, July 16, 2019 6:00 PM 8:00 PM Watch the trailer: https://www.playingwithfire.co/the-documentary
  16. Michael Devault can answer your questions about this. Michael?
  17. Here is his story: https://www.millionaireeducator.com/2018/10/how-to-fire-ontwo-teaching-salariesin-7-years-or-less.html
  18. The millionaire educator Ed Mills quit several districts so he could improve his 403b! And kept moving to very inexpensive rural areas in the deep south, so both he and his wife could save more. The Playing with FIRE documentary producers wanted to feature him in the documentary but he was in Mexico. He retired in his late 40s or early 50s.
  19. Ed, why don't you practice what you preach? Why wait? You put in a lot of time arguing that Fidelity and zero fees are better. OK go for it now. I wouldn't wait. You are paying fees now. As the article says, those fees may be lower now but what if Fidelity raised their fees after a billion or so assets come into their plan? And after the new investors are settled then the brokers go to work trying to convince them to move to one of their expensive funds? The zero fee is a sales pitch. I respect fidelity more if they were more honest about what was going on. As the article implied, you cannot trust anybody with zero fees. It is unsustainable. Something is going on that I am not unaware of. I am keeping my money in Vanguard and TIAA.
  20. Of course, it is only a start, because to do nothing the annuity and high cost active-managed, advisory mutual fund industries win again.
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