Search found 172 matches

by KSActuary
Fri Dec 08, 2017 3:43 pm
Forum: Investing - Theory, News & General
Topic: Which is better: Wellesley or 5-yr 2.5% CD?
Replies: 51
Views: 3639

Re: Which is better: Wellesley or 5-yr 2.5% CD?

Ever consider a small bond portfolio of 5 year IG bonds? Maybe clear 2.5% - 3.0% using all recognizable names.
by KSActuary
Fri Dec 08, 2017 3:39 pm
Forum: Investing - Help with Personal Investments
Topic: Small Business Retirement Options
Replies: 15
Views: 997

Re: Small Business Retirement Options

The Vanguard approach is to offer several testing scenarios but not unlimited attempts to refine or maximize results as this can take up a lot of their time. After several scenarios, Vanguard goes to an hourly rate which is high enough to scare most off.
by KSActuary
Fri Dec 08, 2017 12:38 am
Forum: Investing - Help with Personal Investments
Topic: Anybody use Personal Capital to advise them?
Replies: 10
Views: 937

Re: Anybody use Personal Capital to advise them?

PC is just another in a long line of robo advisors hiding behind a free financial platform. As many have said, you can do just as well at Vanguard.
by KSActuary
Fri Dec 08, 2017 12:36 am
Forum: Investing - Help with Personal Investments
Topic: Small Business Retirement Options
Replies: 15
Views: 997

Re: Small Business Retirement Options

Vanguard charges an extra $775 annually to perform the New Comparability test for the profit sharing contribution. Employee Fiduciary will do the same but I can't remember the additional charge off the top of my head.
by KSActuary
Fri Dec 08, 2017 12:29 am
Forum: Investing - Help with Personal Investments
Topic: Variable annuities Yes/No
Replies: 49
Views: 5106

Re: Variable annuities Yes/No

As with all things, it depends. The industry has made some changes to the commissions charged for these annuities as some insurers offer annuity products where there is no up-front commission but, rather an advisory-like fee each year of 1% or so. I would guess that most annuities are still sold wh...
by KSActuary
Fri Dec 08, 2017 12:28 am
Forum: Investing - Help with Personal Investments
Topic: Help with 401K admin fees
Replies: 18
Views: 1335

Re: Help with 401K admin fees

An asset-based fee structure is not fair for plan participants, especially those who have large account balances since you are not receiving any real benefit for those high fees. Its merely a math problem since the fees are prorated by balance. Looked at another way, how much is that $9,100 as a pe...
by KSActuary
Wed Dec 06, 2017 7:14 pm
Forum: Investing - Help with Personal Investments
Topic: Help with 401K admin fees
Replies: 18
Views: 1335

Re: Help with 401K admin fees

An asset-based fee structure is not fair for plan participants, especially those who have large account balances since you are not receiving any real benefit for those high fees. Its merely a math problem since the fees are prorated by balance. Looked at another way, how much is that $9,100 as a per...
by KSActuary
Wed Dec 06, 2017 11:50 am
Forum: Investing - Theory, News & General
Topic: Understanding Accredited Investment Fiduciary (AIF)
Replies: 3
Views: 335

Re: Understanding Accredited Investment Fiduciary (AIF)

Here is the descriptor from fi360 who provides training for the designation. "The AIF Designation Training and designation help mitigate this liability with instruction covering pertinent legislation and best practices. Accredited Investment Fiduciary® (AIF®) designees have the ability to implement ...
by KSActuary
Tue Dec 05, 2017 12:08 am
Forum: Personal Finance (Not Investing)
Topic: Need advice regarding long term care insurance
Replies: 8
Views: 557

Re: Need advice regarding long term care insurance

There are other LTC products out there where increasing premiums are not a worry. You are simply buying a fixed monthly benefit for a stated number of months. You get approximately the premium without interest if you die or surrender the policy. The LTC benefit is about 3 times the premium amount - ...
by KSActuary
Mon Dec 04, 2017 11:49 pm
Forum: Investing - Help with Personal Investments
Topic: Ever seen a 401k with so few options?
Replies: 13
Views: 983

Re: Ever seen a 401k with so few options?

Any good fund line-up should include the big four - total us, non-us equity and bond.
by KSActuary
Mon Dec 04, 2017 11:42 pm
Forum: Investing - Help with Personal Investments
Topic: Ever seen a 401k with so few options?
Replies: 13
Views: 983

Re: Ever seen a 401k with so few options?

By a "Vanguard" plan, do you mean that it is offered through Vanguard or includes Vanguard funds? I have heard where certain other recordkeepers only offer the target date funds under the ERISA 3(38) protection but allow other funds if the participant waives the 3(38) rights. I think it is odd if th...
by KSActuary
Mon Dec 04, 2017 11:17 pm
Forum: Investing - Help with Personal Investments
Topic: Variable annuities Yes/No
Replies: 49
Views: 5106

Re: Variable annuities Yes/No

As with all things, it depends. The industry has made some changes to the commissions charged for these annuities as some insurers offer annuity products where there is no up-front commission but, rather an advisory-like fee each year of 1% or so. I would guess that most annuities are still sold whe...
by KSActuary
Mon Dec 04, 2017 10:10 pm
Forum: Investing - Theory, News & General
Topic: Vanguard or Betterment for our company 401k plan?
Replies: 10
Views: 1264

Re: Vanguard or Betterment for our company 401k plan?

I work with Vanguard a lot and would say that the fixed nature of their fee for services is a big plus as Betterment still charges a 0.25% investment management fee which can be considerable with the assets in your plan. A 0.25% would somewhat high for your plan anyway for advisory services. The adm...
by KSActuary
Mon Dec 04, 2017 10:02 pm
Forum: Investing - Theory, News & General
Topic: Choosing a 401k provider
Replies: 10
Views: 1098

Re: Choosing a 401k provider

I would like to hear from anyone who works with Guideline and learn more about their custom portfolios and pricing. I find it difficult that $96/year covers the services that they offer.
by KSActuary
Mon Dec 04, 2017 2:09 pm
Forum: Investing - Help with Personal Investments
Topic: Variable annuities Yes/No
Replies: 49
Views: 5106

Re: Variable annuities Yes/No

In general, VA products are complicated which leads many products being sold without full comprehension of the buyer. For this reason alone, I would stay away from them. Also, not exactly in the insurer's wheel house right now given how low interest rates. Looks like your NWM broker is trying to bri...
by KSActuary
Tue Nov 28, 2017 8:45 pm
Forum: Investing - Help with Personal Investments
Topic: Help with 401K Investments
Replies: 5
Views: 474

Re: Help with 401K Investments

First, tell your wife to ask if the recordkeeper can be changed to Vanguard so that the plan can offer the Institutional share class of the TDFunds. LOL! In terms of TDFunds, T Rowe Price, Vanguard and American Funds are pretty good. The current allocation is 100% equity and none of the Vanguard TDF...
by KSActuary
Fri Nov 24, 2017 2:24 pm
Forum: Investing - Help with Personal Investments
Topic: Employer changing 401(k) terms
Replies: 12
Views: 1460

Re: Employer changing 401(k) terms

How about a truly discretionary employer match that is made after 12/31 but before tax filing that uses testing to pass ADP/ACP testing?
by KSActuary
Wed Nov 22, 2017 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: Are these 401k Expenses High?
Replies: 10
Views: 881

Re: Are these 401k Expenses High?

Fee level is average. Real culprit is that they are asset-based which means they go up as your account goes up. Look for a fixed fee solution.
by KSActuary
Wed Nov 22, 2017 11:19 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

Using supposed random number streams to create scenarios using historical returns/relationships from which someone can deduce a "success" rate is a stretch. People look at the Nest Egg calculator at Vanguard and try to "improve" their odds by changing withdrawals and/or allocations like its some kin...
by KSActuary
Fri Nov 17, 2017 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: cash balance plan
Replies: 7
Views: 912

Re: cash balance plan

A cash balance plan is a defined benefit plan disguised to look like a defined contribution plan. You are eligible to receive a pension at retirement but they communicate the value in terms of a lump sum. It is best to determine what the rules are for determining the lump sum amount payable at your ...
by KSActuary
Fri Nov 17, 2017 7:15 pm
Forum: Investing - Help with Personal Investments
Topic: Help with 401K fund choices, please
Replies: 12
Views: 713

Re: Help with 401K fund choices, please

My advice would be to create a simple 3-5 fund portfolio based on your risk preference and then go on PortfolioVisualizer.com and see how that portfolio would have performed historically against the T. Rowe Price Capital Appreciation Fund and you might be surprised. Maybe a little of both would be a...
by KSActuary
Tue Nov 14, 2017 11:27 am
Forum: Investing - Help with Personal Investments
Topic: Wife's 401k investment options (high fees!)
Replies: 26
Views: 1336

Re: Wife's 401k investment options (high fees!)

The $1,000 admin fee is a base fee of some sort and the 20 bps are not shown on the Form 5500-SF or Annual Report. There is also the revenue sharing captured by GuidedChoice. For example, the Loomis Sayles bond fund has 25 bps 12b-1 fee and probably a sub-ta fee which is not reported annually. The p...
by KSActuary
Tue Nov 14, 2017 10:28 am
Forum: Investing - Help with Personal Investments
Topic: Wife's 401k investment options (high fees!)
Replies: 26
Views: 1336

Re: Wife's 401k investment options (high fees!)

No idea how big the plan is in terms of assets but those fees are really loaded up with 12b-1 and sub-ta expenses. Looks like all of the admin and advisor fees are passed through the funds. If the plan is small than EF or Vanguard if above $2.0 million.
by KSActuary
Mon Nov 13, 2017 3:49 pm
Forum: Investing - Help with Personal Investments
Topic: New Job. Confused about 401K choices..Please help
Replies: 11
Views: 527

Re: New Job. Confused about 401K choices..Please help

I second the call for including other assets in evaluation. If only looking at this 401k, I would look at the T Rowe Price Blue Chip Growth fund for a small allocation if you want to overweight to growth as it has outperformed the S&P 500 fairly handily over most periods.
by KSActuary
Wed Nov 08, 2017 10:51 pm
Forum: Investing - Help with Personal Investments
Topic: When to use a non-qualified deferred compensation plan
Replies: 9
Views: 658

Re: When to use a non-qualified deferred compensation plan

ShowMeTheER wrote:
Wed Nov 08, 2017 8:57 pm
FYI - the recently released Tax Reform details are showing a potential major shift in NQDC plans (as drafted, they'd basically be dead). This was somewhat a surprise. Something to keep an eye on as you consider your options both now and as the potential reform progresses.
+457
by KSActuary
Wed Nov 08, 2017 10:49 pm
Forum: Investing - Help with Personal Investments
Topic: Setting up S-Corp 401k / These fees high?
Replies: 9
Views: 563

Re: Setting up S-Corp 401k / These fees high?

EF has the same 0.08% asset fee.
by KSActuary
Wed Nov 08, 2017 10:48 pm
Forum: Investing - Help with Personal Investments
Topic: Help with 401(K) plan selection
Replies: 2
Views: 188

Re: Help with 401(K) plan selection

All the vendors will use asset-based fees in their pricing which is a long term no-no. Employee Fiduciary's formula is $1,500 + 0.08% of plan assets. Vanguard is $3,475 for first 15 participants with a balance with a $1,500 conversion fee. Both EF and Vanguard are open architecture where all low cos...
by KSActuary
Mon Nov 06, 2017 9:12 pm
Forum: Investing - Theory, News & General
Topic: Pension Plan Investment Results
Replies: 9
Views: 1331

Re: Pension Plan Investment Results

The unfunded liability grows and shrinks over time as the discount rate changes and real contributions and returns occur. Reasonable returns, real contributions being made to the plan and the ability of the plan to weather a rising payout ratio are important.
by KSActuary
Fri Nov 03, 2017 10:03 am
Forum: Investing - Help with Personal Investments
Topic: Thank you LadyGeek for this very useful spreadsheet!
Replies: 8
Views: 2425

Re: Thank you LadyGeek for this very useful spreadsheet!

Where did you find the original spreadsheet. The image is a jpg.

Thanks
by KSActuary
Sun Oct 29, 2017 11:39 pm
Forum: Investing - Help with Personal Investments
Topic: Performance of Actively Managed Account...
Replies: 16
Views: 1112

Re: Performance of Actively Managed Account...

I would take a long look at the PIMCO Income fund or other PIMCO fixed income products.
by KSActuary
Sat Oct 28, 2017 3:49 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau’s new book: How Much Can I Spend in Retirement?
Replies: 51
Views: 12378

Re: Wade Pfau’s new book: How Much Can I Spend in Retirement?

Chapter 8 is the most disappointing chapter. Up to this point, Pfau has really just thrown a ton of options at the reader with no real way to put them together into a real world actionable framework. Which of the many variable withdrawal strategies he covers should I be considering? If I want to bu...
by KSActuary
Fri Oct 27, 2017 9:34 am
Forum: Investing - Help with Personal Investments
Topic: Question regarding 401(k) catch-up contributions and employer match
Replies: 29
Views: 1531

Re: Question regarding 401(k) catch-up contributions and employer match

One reason that the software fills the 18.5k bucket first is that most software uses the catch-up as a possible first solution to ADP testing which doesn't apply here. If the plan fails ADP testing then the HCEs are scanned for any over 50 and not completely full on the 6k bucket. They move some of ...
by KSActuary
Tue Oct 24, 2017 10:43 pm
Forum: Investing - Help with Personal Investments
Topic: Changing from company 401k to other
Replies: 11
Views: 845

Re: Changing from company 401k to other

Unless the Principal platform includes a true open architecture fund universe, I would stay away from the product.
by KSActuary
Tue Oct 24, 2017 1:40 pm
Forum: Investing - Help with Personal Investments
Topic: 401k Self Directed Option: Worth the fees?
Replies: 11
Views: 1026

Re: 401k Self Directed Option: Worth the fees?

120 per year is about the going rate for self-direction. If the core funds are poor then go self-direct
by KSActuary
Tue Oct 24, 2017 1:30 pm
Forum: Investing - Help with Personal Investments
Topic: Mechanics of Roth 401K
Replies: 18
Views: 1707

Re: Mechanics of Roth 401K

To answer the OP's original question, traditionally the software used to calculate the Roth contribution is based on gross pay but is deducted after-tax. In other words, 9k comes out of your take home pay while the 9k for the salary deferral results in a smaller deduct on take home pay due to the IR...
by KSActuary
Sat Oct 21, 2017 8:46 pm
Forum: Personal Finance (Not Investing)
Topic: Does anyone here with net worths north of $1 mil use financial advisors?
Replies: 175
Views: 17995

Re: Does anyone here with net worths north of $1 mil use financial advisors?

I am looking to buy a mustang so I logged onto the Camaro web site and get opinions. Mmmmm. There can be many advantages to using an FA. First, anyone with a net worth over $1.0 million is not likely to be paying 1% - maybe much less. Second, how did they arrive at their net worth? Through investing...
by KSActuary
Thu Oct 19, 2017 9:58 pm
Forum: Investing - Help with Personal Investments
Topic: Small article : Investment priorities change
Replies: 6
Views: 843

Re: Small article : Investment priorities change

Another concern with a dividend ETF or fund is that, should interest rates rise enough to tempt some investors back into some form of fixed income, there could be a rotation away from equity-dividend assets and into more traditional fixed income as many would want to avoid the volatility associated ...
by KSActuary
Thu Oct 19, 2017 9:54 pm
Forum: Investing - Help with Personal Investments
Topic: 401k options for small company
Replies: 8
Views: 609

Re: 401k options for small company

Lots of options for a 401k - EF, Vanguard are best.
by KSActuary
Thu Oct 19, 2017 9:53 pm
Forum: Investing - Help with Personal Investments
Topic: Self-directed solo 401k
Replies: 4
Views: 410

Re: Self-directed solo 401k

As with many self-directed options, the fees can be high. Other than that, and the lack of diversification, go for it!
by KSActuary
Thu Oct 19, 2017 9:50 pm
Forum: Investing - Help with Personal Investments
Topic: High fee funds
Replies: 12
Views: 1100

Re: High fee funds

If the fund has shown outperformance over a long period of time, why would you not keep it? While few and far between, there are some funds that have done quite well. Because past performance is not predictive of future performance. Well, not quite true. Funds that have underperformed tend to conti...
by KSActuary
Wed Oct 18, 2017 3:18 pm
Forum: Investing - Help with Personal Investments
Topic: Should I contribute 100% of paycheck to 401k?
Replies: 13
Views: 2588

Re: Should I contribute 100% of paycheck to 401k?

Many companies do not know about the issue where the match ends if there is no deferral which many times is a recordkeeping software issue. Better to ask first.
by KSActuary
Wed Oct 18, 2017 3:15 pm
Forum: Investing - Help with Personal Investments
Topic: High fee funds
Replies: 12
Views: 1100

Re: High fee funds

What are you getting for your high fees? The answer is not past performance - the past is the past and does not indicate future performance. There are some strategies out there that I might be willing to pay for - mostly in bonds. PIMCO's Income Fund, junk bonds, etc. small cap EM, Long / Short, an...
by KSActuary
Thu Oct 12, 2017 2:41 pm
Forum: Investing - Theory, News & General
Topic: Why is inflation so low? Moore's law?
Replies: 33
Views: 4524

Re: Why is inflation so low? Moore's law?

Low inflation is necessary to accommodate the decline in real wages occurring in the US and developed economies. Demographics don't help either as diverting productivity into less efficient parts of the economy (health care/Medicare) provides less real GDP.
by KSActuary
Thu Oct 12, 2017 2:38 pm
Forum: Investing - Theory, News & General
Topic: Financial Planners and Negotiations
Replies: 8
Views: 919

Re: Financial Planners and Negotiations

First, the value that a client receives from an advisor can be very different as clients have differing needs. Some want complete portfolio construction and management, plus financial planning advice while others may have a more simplified objective to the portfolio and are really looking for the fi...
by KSActuary
Wed Oct 11, 2017 8:18 pm
Forum: Investing - Help with Personal Investments
Topic: Adding money to 401K/403b late in the year.
Replies: 18
Views: 980

Re: Adding money to 401K/403b late in the year.

The 10% is not correct and most employers limit salary deferrals less than 100% due to other pre-tax or after-tax employee benefits. The most common number is 70% that I have seen.
by KSActuary
Wed Oct 11, 2017 3:25 pm
Forum: Investing - Help with Personal Investments
Topic: Participant Fee Disclosure
Replies: 6
Views: 581

Re: Participant Fee Disclosure

The new DOL rule applies to brokers and advisors and their interaction with asset management including 401k plans. The new DOL rule would state that the participant should leave the money in the 401k plan unless the advisor/broker can show reason that it is better outside of the plan in an IRA. Form...
by KSActuary
Wed Oct 11, 2017 9:36 am
Forum: Investing - Help with Personal Investments
Topic: Participant Fee Disclosure
Replies: 6
Views: 581

Re: Participant Fee Disclosure

Edward Jones may be requesting your Participant Fee Disclosure so that they can prove that they are acting in the client's Best Interests by rolling the money from the IRA to a brokerage account. The new DOL rules require that IRA rollovers be for the benefit of the participant and the broker/adviso...