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sschullo

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Everything posted by sschullo

  1. Hi TanP Welcome to the forum. It is very good to see a fellow LAUSD teacher here. I am retired from LAUSD 12 years ago and I am a volunteer member of the advisory committee for the 457b plan. Congrats for stopping money going to that expensive and worthless annuity. I had two annuities way back and I got out and paid the surrender costs, and very happy I did. As I transferred the money into mutual funds that are genuine investments. As you found out, annuities are an insurance product that is NOT an investment, and the "adviser" who sold it to you is a salesperson, not a genuine adviser either. Congrats on starting with the district's 457b plan. Attached is the 457b plan with the fees that you will pay. Until you know a little more about asset allocation, I agree with Tony about selecting one of the Target Date Funds. You have a 100% stock allocation. That's fine if you are under 35 years old and can handle the volatility. Your allocation can be tweaked a little but there is no rush, as there might be some unnecessary overlap between you two large-cap funds. vanguard extended market index is a great fund. I have some of my money in that fund, as well as the total bond market index. Remember I am retired and most of my money is in bonds. I have a 30% stock allocation and 70% bond but that is appropriate for me but not for others. Everybody is different, different needs, different risk tolerance, different goals. My goal is for my money to last the rest of my life supplementing my CalStrs pension, so I have a very conservative portfolio that has been doing well. You also have Vanguard Wellington and Vanguard Wellesley. In the attachment, the table shows the allocation between stocks and bonds in Wellington And Wellesley. As a general rule of thumb Wellington is for younger investors and Wellesley is for older. I have some of my retirement money in Wellesley. Again welcome to the forum and its great to hear from an LAUSD teacher. Lets us know what you are thinking and we can help you decide your stock to bond allocation and your stock allocation. Steve
  2. I believe I did but don't remember the specific city. Yes, I knew that Vanguard's client's money is not directly with vanguard but it held in custodial accounts. I believe their brokerage accounts are held by another firm. But I never knew that these same companies can also receive direct contributions from employees. I have never seen either VG or Fidelity trust on a 403b list until now.
  3. If I am confused after all of these years now I understand why newbies are so confused for months and years. I have never seen a discussion here, at M* discussion, or even at Bogleheads about VG Fiduciary Trust Company and Fidelity Management trust, NEVER! Learn something every day. Thanks, Steve
  4. Hi Egg, Welcome to the forum. Very happy you came here to get more information because you already knew something was wrong. You were about to be sold one of the worst plans for retirement. Most of us, including myself, were sold two annuities in the dark ages of the 1980s, and the same thing is happening 40 years later, and very little has changed. There is a long history of this website going back 20 years trying to inform colleagues. What happened to you is still happening to the vast majority of public k12 teachers in California and across the country. Looks like you are in California because you have CalSTRS Pension 2 and TIAA CREF. Both are the best that I can see from your long hideous list. Typical for California. The bad guys are getting very clever when they start using the two companies we love around here, Fidelity and Vanguard. I looked up Vanguard Fiduciary Trust Company, and they say they are a subsidiary to Vanguard. I think it's a red flag to avoid, but others here may know more. Your best plan is CalSTRS Pension 2. They have Vanguard. We love Vanguard because unlike an expensive and inappropriate annuity, Vanguard decades-old reputation is its low costs and broad diversification across the domestic and international stock and bond markets. If you are new to this, you can read up on John Bogle who started Vanguard back in the 1970s and read any of his books. You can also go to Bogleheads.org and visit their Wiki to learn more about indexing and John Bogle, which is the passive strategy for investing: https://www.bogleheads.org/wiki/Main_Page Bogle just died last year at age 89. He was more than just an innovator, he always looked out for us, the regular investors. Vanguard has over 6 trillion in assets. I have my nest egg with Vanguard. Back to your question, as I said it looks like Pension 2 is where you can get started. https://www.calstrs.com/pension2 They have 3 types of portfolios, conservative, moderate or aggressive. Does your district have a 457(b) plan? Most California districts do. That's another option. In my district, Los Angeles Unified, the 457b plan has very low-cost target-date funds from Blackrock, which would be another place for you to start and begin learning to watch your money because nobody is going to do this better than you, educated in personal finance. Without knowing more about you and your current knowledge please let us know your thinking. We are here to help. We are not sales or advisers, but mostly teachers or spouses of teachers. I am a retired teacher from Los Angeles Unified. And I know your story all to well, and so do the others here. You are going to get great feedback from the smart people who frequent here. Again Welcome! Steve PS unless I am missing something, you do not have to talk to that salesperson again. Annuity salespeople are NOT financial advisers, they are salespeople that sell expensive products to get them a commission and ongoing high costs. Avoid them!
  5. My Tesla is out of warranty and I still get support. There are plenty of anti-Tesla people out there. I have heard it all. It started with 8 years and now it increased to 20 years according to some loud-mouthed jerk at a Tesla charging station (of all places!) when he said the same old crap. Not heard what a Mercedez production does to the environment, and then you have to put in gas and oil for years! Everybody is right and everybody is wrong. There is no good answer to the problem of reducing our carbon footprint. Electric is one way. BTW I have not heard of much negativity of solar panels but I am sure their opponents are everywhere. Thanks for the Small is Beautiful book. His essay Buddhist Economics reads like a sociologist: long-winded! LOLs. Yeah, my portfolio has all the companies good, bad, and indifferent. BTW I read a very interesting piece on the connection of Buddhist practice and passive investing on some blog years ago, and unfortunately, I cannot find it!
  6. sschullo

    403b - 457

    Me too. There is a lot of evidence that individual stock picking is a fool's game because of the lure of "beating the averages" with speculation. Speculation is not investing, it is gam bling. And there is nothing wrong with getting the average over time, about 9.6%. Ben Graham in his big tome The Intelligent Investor implied that individual stock pickings are not for the everyday investor. In today's world, a spreadsheet or an expensive program that searches companies do not compete with the thousands of highly trained and the smartest people on the planet, using powerful computer technology in Wall Street or the big financial firms are all doing the same thing, and nobody so far has a strategy for beating the averages. Yeah, we heard the Warren Buffett argument, but what's interesting is that day trader who loves to quote WB don't follow his strategy of buy and hold good value companies for years. But if you want to gamble, I get it. The local casinos here are always full of people--Sad. Look for the brokerage account in just about any 457b plan which usually a deferred compensation plan. At my school district, it is called "Self-Directed Brokerage Services Account by TD Ameritrade." Of the 11,000 LAUSD employees invested in the 457b mutual and index funds, about 39 are invested in SDBSA. So this service is already allowed. Not sure why your state needs a bill passed.
  7. Thanks ScottO. Good choices Fitlx details: https://fundresearch.fidelity.com/mutual-funds/summary/31635V398 Domestic Large-cap blend. FNIDX: https://fundresearch.fidelity.com/mutual-funds/summary/31635V349 International, ex U.S., large-cap blend as well: https://fundresearch.fidelity.com/mutual-funds/summary/31635V349 Both passive strategy, moderate risk, low expenses. I don't remember the fund that I was invested years ago. Dropped it when I learned about proper diversification, with an eye out for my risk tolerance and of course low costs and passive strategy. As I have stated here before, I practice responsible investing by reducing my consumption of petroleum products by purchasing solar panels and electric cars. Yeah, being the first adapter was expensive but after 12 years the solar panel investment of $33000 was paid off and I save money on reduced maintenance, time and no petroleum products for the electric cars (no gas, no oil and filter changes, no grease jobs, no transmissions, no motor cooling systems and much less time at those awful ripoff dealerships). But what I do is not for everybody. Not sure if anybody else has an electric car who frequents this forum. Let us know if you do. FYI, you can get a used Nissan Leaf for about $5000, and its a great car for local driving only, and charged overnight with a standard 110V. Mr. Money Muschach loved his: https://www.mrmoneymustache.com/the-nissan-leaf-experiment/. and this usually brilliant MMM article: https://www.mrmoneymustache.com/2016/10/04/so-i-bought-an-electric-car/ Excerpt: MM wrote: Over 99% of new cars sold in the US are still gas-powered, and when I run the numbers as an engineer and car enthusiast, I find this to be preposterous. Logically, this should already be less than 50%, and by the end of this decade, it should be zero. The only thing keeping more people from ditching gasoline is that people don’t realize how f...... amazing electric cars are, and I feel I should do my part to share this information. The most effective way to do this is to own one myself and write about the experience. What an absolutely brilliant article by an enlightened man. Sorry, I got way off-topic. I am so excited that THE MMM is also encouraging this purchase and he alone will convince more people to purchase electric cars. I wonder if Elon Musk reached out to him to be on his marketing team! On the big picture of socially responsible investing, there is a growing change in investing, especially the younger generation, with not just the environment but how investors judge the current state of socially responsible investing with many current issues: racial inequality, income inequality, COVID and our health crisis. For years, our k12 colleagues are interested in this topic. Both my late hubby and I were definitely interested so we did what we could do. We bought the products, not the stock, and try to practice by reducing our carbon footprint.
  8. Hi Tricia Agree with Ed about Dogs. I love Dogs the pets, but not investments! I didn't know they were still around. Diversify, keep costs low, and have a fixed account to balance out equities. Just suggestions as that's what most of us do around here. KIS Steve
  9. This article makes my point that ESG investments are unfortunately too expensive, so 401K plan sponsors and their consultants should not be choosing them. http://therosenbaumlawfirm.com/blog/?p=4838
  10. By Larry Swedroe, a well-known author in the Boglehead community. His most famous book: "What Wall Street doesn't want you to know" and "Winning a Bond Strategy" and other books. Many of our colleagues and the young FI and FIRE communities are interested in the Environment, Social and Governance investing, known as ESG. Larry's article show promise! Investors are demanding compensation for the risk taken by carbon emissions, and so Larry's article points out that investors are getting compensated for that risk. It doesn't really move the needle towards ESG investing but the investor demands are very promising. https://seekingalpha.com/article/4359161-impact-of-carbon-risk-on-stock-returns?utm_medium=email&utm_source=seeking_alpha&mail_subject=larry-swedroe-the-impact-of-carbon-risk-on-stock-returns&utm_campaign=rta-author-article&utm_content=link-0 I am currently not invested specifically in any ESG funds because those funds are expensive and don't fit my diversification plan. However, what I have done is to purchase solar panels 12 years ago and 2 100% electric cars (no hybrids!). And saved a bunch of money. Here is an article published in the Huffington Post detailing my solar panels and 2 electric car investments: https://www.huffpost.com/entry/renewable-energy-investme_1_b_8028316 (This article is five years old, and I am updating it as we speak). We cannot wait for somebody else to clean up the environment.
  11. sschullo

    YTD Report

    Great clips for a very smart man. In all fairness to my generation, in the 60s people forget how devastating the JFK assassination was. Kennedy was an enormously popular president! And would have been reelected in 1964 easily. Johnson did everything right but NOT Vietnam!!!!!!!!!! Nobody knows what Kennedy would have done about Vietnam. It would be all speculation to guess. Five years later, (1968) while I was in the Oakland Naval hospital glad to get out of the horrific mess called Vietnam, MLK was also assassinated, and then 2 months later, Robert Kennedy!!!!!!!!! Yes, events are terrible today, but 1968 was a terrible year with rioting all over the country and Chicago's democratic convention was a war zone. While the country was badly wounded by all of these horrific events, the country did survive. But one of the prices is our continued terrible race relations and income inequality. The middle class is disappearing. And no political party is addressing that core issue!
  12. sschullo

    YTD Report

    Germany is a perfect example of what this country should and I think will now follow. The Germans are saying to the world that we are not nazis! There are no monuments anywhere reflecting that terrible, horrific era between 1933-1945. Here we have hundreds of monuments celebrating this terrible U.S. history, and some people are proud of that time??!! I was so proud to attend our local rally and see all of these young people confront our race relations head-on in which my generation failed to finish the job. Many of my generation read "Black Like Me". As a 17 year old, caucasian from Wis. I could not believe what I read, and a half-century later I still cannot believe we are still going through this.
  13. sschullo

    YTD Report

    In case anybody is interested. I wrote a blog piece about the past three months, some historical perspective of horrific events during my lifetime. We are going to get through this! And additional sharing of my thoughts on my portfolio and why it is performing as designed. Enjoy! https://latebloomerwealth.com/commingling-of-life-money-y-t-d-report-2020/
  14. Absolutely, run from this pure and unadulterated insurance salesman. You came here and you know too much to ever go back to trusting this guy or anybody else who makes those types of self conflicted pitches. You got great feedback from smart people here that you will never get from any so-called "professional" in the public k12 403b market.
  15. sschullo

    YTD Report

    What a quarter, and the stock and bond market is the least of it. May 25th will go down as "a date which will live in infamy, " quoting FDR speech about December 7th, 1941 the surprise attack on Pearl Harbor by the Japanese. Not only that but COVID is going to be with us until the 100 companies who are working on a vaccine develop one. The virus came home to roost when a friend who lives in Los Angeles got it. The only symptoms were no smell or taste--no fever, no sore throat, no aches or pains. This disease is not going away as expected during warmer months. I am not going to get into politics. Suffice to say that Georgiana, my wife, and I wear a mask 100% of the time when we are out of the house and out of our car. For comparison between the Q1 and Q2 will show how my portfolio recovered to have a Y.T.D. return of +.5% or half a percent. Q1 returns Q1 and Q2 Returns Asset Allocation has not changed for over five years except this year, I sold my Total Bond Market Index IRA and invested in California Munis strictly for income tax advantages NOT BECAUSE OF ANYTHING ELSE. This move is within my stock/bond split plan. No cost adjustments for my Vanguard and TIAA portfolio.
  16. We have all, or mostly all, of us made the same mistake. It is criminal that these products are STILL being sold each and every day to our public k12 403b plans. $375 dollars after the last five years is criminal! I was in my middle 40s when I had to pay an 18% surrender fee to get out of two horrible fixed annuities, but I did it in 1994 and was happy I did. I was so angry at the time, that I vowed to write a book, and I wrote two books to try and inform our colleagues to stay away from the "nice" guy or gal in the cafeteria. You might be able to take it out over five years, but depending on the contract, you might not get any interest. But in your case, assuming you have 20 years until retirement, I would pay the $627 so you can invest it in genuine stock and bond markets.
  17. Tony, With nonErisa 403bs, it is my understanding that TIAA is only available. Depends on the district's plan document. I know for my district only TIAA is available. I looked into the REIT from Cref side for my Roth IRA but it was .99% cost at the time! That's all I know. Heather may have a different access to TIAA and CREF than I did because her district matches 5%. That makes it an ERISA 403b, I believe. Steve
  18. Hi Heather, Welcome to the site. Avoid the CREF side. They are high-cost mutual funds. I used the TIAA side for many years in the 403(b). I had an equity index and a bond fund ONLY on the TIAA side. I still have the Traditional Annuity which pays 3.00% with no surrender, no advisor fees, no expense ratios and the principle is guaranteed. TIAA gets paid by what they get in the market and what they credit you. I would suggest you call TIAA and find out what you can do. Also, I see that your employer matches 5.0%. That's great! But it does restrict what you can do to get a Vanguard or Fidelity.
  19. Also, the legendary author of the FI and FIRE movement is CL Collins Simple Path to Wealth. He credits Bogle from the first to his last sentence. It's an easy ready Tricia. Here is my Amazon review of Simple Path to Wealth: https://www.amazon.com/gp/customer-reviews/R24LBG260PCZHL/ref=cm_cr_dp_d_rvw_btm?ie=UTF8&ASIN=1533667926#wasThisHelpful And my Amazon review of Your Money or Your Life by Vicki Robin: https://www.amazon.com/gp/customer-reviews/R34XCX7436D7ZK/ref=cm_cr_arp_d_rvw_ttl?ie=UTF8&ASIN=0143115766
  20. Ed and MNgopher, I don't know about you MNGopher, but I wish I were young enough to see how all of this plays out with the FI and FIRE movement. It will be interesting of the unintended consequences of retiring with a million or 1.5 million without a pension or full SS, yet living for up to 60 more years without an income! Its the longevity that is uncharted. Wall Street has data going back 100 years but the future is unknown. So its the only part of the equation that has to be trusted. Do we trust that the stock market and the world economies will continue to grow? If we cannot trust that, what is the use of investing? Illness is another factor. Capitalism is great for a healthy, literate, and sound mind but a chronic illness of any type takes it all away in a minute. Also after watching the documentary Playing with FIRE, the bigger transitions from Scott and Taylor in the were not the transition from employment to living without an income, it was the withdrawal systems of transitioning to frugal living. Initially, Taylor did not want to give up her Mercedes Benz, but that's just a small part. It was tough for them, but they did it. I wonder how many people will give up on living in frugality and retire in their 50s instead. But you folks are extremely smart and talented and you have got all of these known risks covered. I am most proud of the anti-materialism and anti-consumerism throughout the materials and books that I have read from your gurus.
  21. Thanks for reading my book! In the appendix, with Vanguard's permission, I published Vanguard's Model Portfolios. Since my late 50s, I used the 30/70 AA which I explained in detail the reasons on pages 80 and 81. Your current 75/25 is fine for your time horizon and you made it through (so far) this latest decline without losing sleep or worse yet panicking and getting out. You graduated! You have great risk tolerance. Congrats. I thought I had it back in the day with the tech bubble crash which lasted over two years and i was younger but what I had was not risk tolerance but overconfidence. That's just as deadly. Bill Bernstein wrote about if you won the game why continue playing. That was just one of the major mistakes I made. You asked about increasing your fixed account allocation as you age. That depends on how much you need the money when you retire. Some people can live comfortably with their pension and other sources of income (side gigs etc) and if that's the case, heck go 100% stocks and let your descendants benefit. But if you need the money, like I do, take the conservative approach.
  22. Tricia You asked about an AA with age. What are your thoughts so far? Steve
  23. Update. The portfolio is now down about 2.0% YTD at the closing of markets last Friday, May 22. From the highs of my portfolio in the middle of February to the lows of March, my portfolio was down about 12%. My thoughts. For most people market crashes are memorable but what's not so memorable is watching the markets recover. Buy and hold and long-term investors are able to just observe this fascinating stock and bond world. Passive investors participate by going along with the ride with all that is going on with thousands of corporations around the world with millions of hard-working employees, all of that energy is at our fingertips. Wow! Sorry but I get a little emotional about this! But this has little to do with me, its how my portfolio was constructed to go along with the flow, up over the last 11 years, down for a while and now up. Fascinating!
  24. Tricia, I like VG and Bogleheads philosophy also. Both have done great things for over 20 years (Bogleheads) to help us ordinary folks get a s at Wall Street using Vanguard index funds: Reasonable returns with reasonable risk with rock bottom costs and core asset classes. Nothing fancy, just plain and ordinary investing in the broadest and most diversified stock and bond market indices around the world. How cool is that! I have saved so much in fees it has paid for a lot of good stuff in my retirement life. I used that model portfolio allocations years ago to set up my stock-bond split that is suitable for my willingness to take equity risk and the need for the $$ for retirement. There are a number of Bogleheads who take 100% stock allocation for years and are perfectly happy with the volatility.
  25. I plan to today. Sorry I missed yesterday because something came up.
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