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Patrick

Consolidating existing accounts into a new 403b

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43 minutes ago, tony said:

Maybe things have change as I've been out of the loop for  a while. I totally understand some folks value using an advisor when making financial decisions. I get that completely as long as they get the right kind.

 

Best to stay out of that advisor loop 😀

I’ll happily provide sound information and data for free to anybody who feels the need for an advisor, but prefers to keep their money in their pockets.

...plus I hope everybody knows that an advisor is NOT required to act in your best interests and is almost always incentivized to act against them!

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33 minutes ago, EdLaFave said:

I’ll happily provide sound information and data for free to anybody who feels the need for an advisor, but prefers to keep their money in their pockets.

 

ED

I agree that staying away from advisors would be smart and good for your pocketbook. But not all investors feel comfortable doing it on their own or have the knowledge we have. Without some help they might not save at all. A fee only advisor might be appropriate for some. I must admit most advisors i've worked with lied to my face over and over......and only made things worse. But, they were not real advisors. They are all friggin commissioned salespeople.

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10 hours ago, tony said:

 

ED

I agree that staying away from advisors would be smart and good for your pocketbook. But not all investors feel comfortable doing it on their own or have the knowledge we have. Without some help they might not save at all. A fee only advisor might be appropriate for some. I must admit most advisors i've worked with lied to my face over and over......and only made things worse. But, they were not real advisors. They are all friggin commissioned salespeople.

I think the problem is the one I'm facing now: yes, there's a lot of knowledge out there, and Google is your friend, but there's simply no way to assemble this information into a coherent body of knowledge while also working to make time-sensitive financial decisions. Just from bumping this thread, I have enough homework to keep me busy for years, and as a doctoral student and full-time administrator, I don't know where I'll find the time. So that's how people like me come to rely on advisors. I'm not saying I've made that choice, but between now researching 457bs, learning about 403b plans, comparing vendor charges (which aren't posted anywhere publicly), and then trying to figure out what exactly I'm supposed to do once I start the sign-up process for some of these services, I'd really just as soon get some help. Of course there's nuance there, too, as apparently these providers are cess pools of dishonest salespeople and bad actors, but that takes me right back to step 1: staring at a million options I don't really understand, trying to find time I don't have to do homework that seems like it'll take months.

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51 minutes ago, Patrick said:

there's simply no way to assemble this information into a coherent body of knowledge while also working to make time-sensitive financial decisions

Just my opinion: don’t let anybody (even yourself) push you towards making a time sensitive financial decision. Walk away every time and make the decision when you’re good and ready. If the “opportunity” has expired by that time then you most likely dodged a bullet.

 

51 minutes ago, Patrick said:

I have enough homework to keep me busy for years, and as a doctoral student and full-time administrator, I don't know where I'll find the time. So that's how people like me come to rely on advisors. I'm not saying I've made that choice, but between now researching 457bs, learning about 403b plans, comparing vendor charges (which aren't posted anywhere publicly), and then trying to figure out what exactly I'm supposed to do once I start the sign-up process for some of these services, I'd really just as soon get some help.

If you ask questions I will happily provide direct answers.

I don’t feel comfortable definitively telling you that Aspire is your best option because I haven’t personally researched every vendor on the list and I’m not sure if you also have access to 457b plans (especially the NY state variant).

However, I feel entirely comfortable in definitively telling you that using Aspire and the funds I referenced on my site is going to be massively superior to anything an “advisor” would put you in. It isn’t even close.

I also feel comfortable telling you that even if you’ve got a great 457b, it cannot be that much better than the Aspire 403b. So if you’re just overwhelmed and can’t get to it, then investing through Aspire is an entirely reasonable middle ground until you find more time to get into it. I should also mention that maxing out your IRA (6k/year) is a great thing to do as well...and it takes almost no effort relative to this 403b/457b mess. 

51 minutes ago, Patrick said:

that takes me right back to step 1: staring at a million options I don't really understand, trying to find time I don't have to do homework that seems like it'll take months.

I’m not sure if I linked you to my Investing 101 page, but it takes five minutes to read and gives you virtually all of the knowledge you need. The industry makes this appear far more complicated than it actually is because they want you to hand the keys over to them.

I’m happy to guide you through all the nonsense.

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Patrick

Confusing the client is the name of the game unfortunately in this arena and information is often purposely hidden as to not be easy to find. After all ,if it was all clear, than you truly, probably,  would not need an advisor.  Investing in its true form is quite easy but I understand your situation completely. If at very least we have stirred you away from insurance companies and their horrid annuities than we have done well . Looks like Aspire with an advisor connection might be your best choice. If you do decide that route make sure you ask him about the total fee package. From my experiences Aspire advisors are pretty upfront about sharing all relevant fee  information. Also once you sign up for your funds, you can request a prospectus for each fund you invest in. You will find full disclosure information there including fees.The Securities and Exchange commission requires these by law. I believe you can find Aspire's fees stated on line on their website although MoeMoney pretty much stated this in her post above.

Best,

Tony

 

P.S. If I didn't mention it I invested with Aspire for a few years. They are leaps and bounds above anything on your list. Coupled with Vanguard as your fund choices you really can't go wrong. I went the self-directed route but again I get where you are coming from with using an advisor.

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Just reinforcing what Ed and Tony have been saying:  you can cut through this thicket without a scholarly review of the literature. 

Were you to do the research, you'll find that the data is unambiguous: a buy-and-hold portfolio of low-cost broadly based index funds is likely to outperform the great majority of other approaches while minimizing the risk of permanent loss that can come from concentrated "bets" (such as individual stocks).  There is no realistic way to identify the highest-performing future investments (and there are myriad ways to lose money trying), so the goal is to find a simple approach that will capture overall market returns.  Index funds offer that approach.

There's just one significant allocation decision you need to make: the proportion of stock funds (more volatility, expected higher return) versus bond or "stable value" funds (lower expected return, less volatility).  The main thing is to stay the course--it could be disastrous if you pull out of stocks in a panic when the market takes a dive, as it will from time to time.  If you are unsure about your tolerance for roller coaster markets, start with 60/40 stocks/bonds. 

As to your 403b/457 plan, I suspect you have a benefits or fiscal services department where somebody can simply answer the question about whether the state 457 plan is available to you.  If it is, that's your choice, set up the account and folks here can help you to identify the fund(s) to purchase.  If the answer is no, follow Ed's instructions on using Aspire; it's a little more expensive, but you'll still be fine.

I agree with Tony that financial planners can offer a valuable service, as is true for accountants and estate lawyers -- the problem is that (especially in the 403b sphere) there are many of what Ed aptly labels "advisors," in contrast to actual financial planners who will work in your best interest.  "Advisors" are salespeople (usually brokers and/or insurance sales) who may be well intentioned but who have a fundamental conflict-of-interest: their job hinges on selling you products that will financially benefit them, through commissions, bonuses, etc.—these are virtually never the best option for you, sometimes they are truly bad investments.  The financial planners you may someday want are fiduciaries whom you will probably pay on an hourly or flat-fee basis; they will look at your whole financial picture, planning for family expenses, large purchases, retirement scenarios, Medicare, insurance needs, etc.  They may be expensive (again, think lawyers and accountants).  I'm a reasonably sophisticated DIY investor with a relatively simple situation (single, no kids).  But I intend to seek out a professional to review my plans and assumptions before I retire, just in case I'm missing something.  However, my sense is that you don't require that service to set up a retirement investing account now.

 

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Whyme

Your comments are well taken and as usual you add rational  holistic comments  to our discussions.

I think we need to all be careful about over attacking advisors based on our experience with insurance annuity salesmen and their sleazy abuse of teachers. I know personally I've had the tendency to lump them all together which is  unfair to real certified fee only advisors who do their job honestly.

Like you  and Ed I don't feel Patrick needs an advisor just to pick an investment fund. He could very well do it on his own. But my experience signing up with Medicare taught me that although I thought I knew it all after personnel research, dealing with an Medicare consultant helped me make sure I got the best deal and made the best choices. The advisor definitely added knowledge and things I did not know.

I also admire Ed's desire to get the absolute, best deal, lowest cost product possible. I differ with Ed in that I'm not quite the tightwad he is when it comes to expense ratios. For me Vanguard's fees are low enough even if Fidelity reigns supreme in expense ratio on a few funds.

I think we need to focus on giving folks here a more holistic , varied view on investing instead of always focusing on the lowest possible fees. You do that in your posts often and that is why you are such a valuable and respected contributor.

 

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I’m definitely a tightwad, although I haven’t heard that term in quite a while 😀

Allow me to limit my comments to the legitimate, ethical, and rare advisors who are willing to sign fiduciary paperwork with their clients. If they’re doing their job correctly, then all they’re doing is telling you to buy total market index funds and encouraging you to max out your tax advantaged accounts. These folks are professionals and require a professional’s salary...that’s a lot to pay somebody for something I could teach you in 15 minutes.

While I’m clearly opposed to exploítative “advisors”, I also don’t see a role for legitimate advisors because the elementary services they offer (which is freely available in communities like this one or bogleheads) simply isn’t worth the price. Perhaps the one exception is if you’re into all kinds of shady business deals or rare circumstances and you need a professional to work the system for you...I’ve never met anybody in those circumstances.

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