Search found 393 matches

by EdLaFave
Sat Jul 20, 2019 2:41 pm
Forum: Personal Investments
Topic: Apply the standard deduction, ordinary vs qualified income.
Replies: 1
Views: 314

Apply the standard deduction, ordinary vs qualified income.

Please confirm or correct my understand of the tax code. For the sake of simplicity, let's assume MFJ and let's pretend that the standard deduction, ordinary income from a job, and a long term qualified gain from selling a stock are the only relevant parts of the tax code. I'll use three examples to...
by EdLaFave
Mon Jul 15, 2019 10:47 pm
Forum: Personal Investments
Topic: Teacher 403B Plans
Replies: 31
Views: 2200

Re: Teacher 403B Plans

Socrates wrote:
Mon Jul 15, 2019 10:33 pm
the one you mention is VFIDX.
Thanks. I wish Vanguard would have posted symbols in that PDF.

Somebody I know told me they have access to VBILX. It isn’t clear if they’re wrong or not, I can only take their word for it.
by EdLaFave
Mon Jul 15, 2019 10:42 pm
Forum: Personal Investments
Topic: Teacher 403B Plans
Replies: 31
Views: 2200

Re: Teacher 403B Plans

So are you able to choose any vendor and set up your own 403b plan if you don’t like what your school district offers? Somebody on this thread claims the answer is yes. That runs counter to my experience and the experience of everybody I’ve talked to who has experience with 403bs. I can always be s...
by EdLaFave
Mon Jul 15, 2019 10:23 pm
Forum: Personal Investments
Topic: Teacher 403B Plans
Replies: 31
Views: 2200

Re: Teacher 403B Plans

Fidelity, for example, offers all its funds for 403(b) clients. Vanguard doesn't offer many of its popular and IMHO quality funds like Wellesley, Wellington, VBILX, International Explorer, etc. I’ve been told Fidelity does not offer all of its funds to 403b clients. Specifically I was told Fidelity...
by EdLaFave
Mon Jul 15, 2019 9:17 pm
Forum: Personal Investments
Topic: Teacher 403B Plans
Replies: 31
Views: 2200

Re: Teacher 403B Plans

No......Here is the list from the 403(b) website which matches my fund choices also: https://www.vanguard.com/pdf/403BINVT.pdf I didn’t take the time to see if this list is equal to the list others have sent me. However, my confusion centers on your use of the words “limited fund choices”. It’s har...
by EdLaFave
Mon Jul 15, 2019 8:34 pm
Forum: Personal Investments
Topic: Teacher 403B Plans
Replies: 31
Views: 2200

Re: Teacher 403B Plans

Vanguard is obviously excellent, but they have limited fund choices with 403(b). My 403(b) fund is primarily Vanguard index funds: TSM, Small Cap Index, Corporate Bond, Health care, REIT. I believe your employer likely negotiated to have Vanguard offer only a subset of funds. If you ever look into ...
by EdLaFave
Sat Jul 13, 2019 10:58 am
Forum: Personal Investments
Topic: Teacher 403B Plans
Replies: 31
Views: 2200

Re: Teacher 403B Plans

How? I've been trying for years... Can you please provide some details? Every district is different and I don't pretend to have all of the answers, but I'll lay out my general recommendations based on my experience. Do Your Homework 1. Fully understand the vendors/plans currently approved by your d...
by EdLaFave
Fri Jul 12, 2019 12:47 pm
Forum: Personal Investments
Topic: Teacher 403B Plans
Replies: 31
Views: 2200

Re: Teacher 403B Plans

This list has several “great” to “reasonable enough” options: Vanguard, documented here Security Benefit’s NEA DirectInvest, documented here . Lincoln’s PDP Aspire, documented here . PlanMember Direct, documented here . Remember, you can always get your district to add Fidelity and/or Vanguard to th...
by EdLaFave
Sat Jul 06, 2019 2:46 pm
Forum: Personal Investments
Topic: 403B and 457 Plan Options
Replies: 12
Views: 746

Re: 403B and 457 Plan Options

The Roth vs Traditional is an endless debate. The right answer will depend on your particulars. Assuming your marginal tax rate now and when you withdraw the money is the same, then it doesn't make a difference. I think this needs a bit of clarification. If a dollar you invest today will eventually...
by EdLaFave
Sat Jul 06, 2019 12:44 pm
Forum: Personal Investments
Topic: 403B and 457 Plan Options
Replies: 12
Views: 746

Re: 403B and 457 Plan Options

I totally get it. I wanted to teach math, physics, and/or computer science courses. A department head explained to me that they’re only hiring adjuncts who are basically paid minimum wage, have no guarantee of consistent hours, and may or may not, after many years, become tenured. I’ve read several ...
by EdLaFave
Thu Jul 04, 2019 11:15 am
Forum: Personal Investments
Topic: 403B and 457 Plan Options
Replies: 12
Views: 746

Re: 403B and 457 Plan Options

- I am planning on contributing 10% of my salary to the 403b plan for now and then put a little extra in the 457 plan. They offer a Roth 403B and a traditional 403B, but I am not sure which one is my best option. Which one should I should I start with? - I don't care much for their choice of invest...
by EdLaFave
Wed Jul 03, 2019 5:51 pm
Forum: Personal Investments
Topic: 403b's and 457b's and HSAs, Oh my! + early retirement
Replies: 13
Views: 1396

Re: 403b's and 457b's and HSAs, Oh my! + early retirement

I've never heard of a state run 403b and given that it is managed by Fidelity, it surprises me that there aren't any Fidelity funds available. At any rate, you can build a fully diversified stock portfolio with the following funds: International VEMIX Vanguard Emerging Markets = 0.10% VTMNX Vanguard...
by EdLaFave
Wed Jul 03, 2019 11:41 am
Forum: Personal Investments
Topic: 403b's and 457b's and HSAs, Oh my! + early retirement
Replies: 13
Views: 1396

Re: 403b's and 457b's and HSAs, Oh my! + early retirement

1. I’m curious how your state retirement plan works. What investment options are available? What are the costs? What are the contribution limits/rules? What are the tax implications? 2. You’ve used language that seems to link the state retirement plan with a 403b, what’s going on here? 3. List the a...
by EdLaFave
Wed Jul 03, 2019 11:32 am
Forum: Personal Investments
Topic: Teacher Looking To Stop 403b Contributions
Replies: 46
Views: 2788

Re: Teacher Looking To Stop 403b Contributions

1. Please list every 403b vendor your district has approved. I can help you pick the best one, if you’re paying a 1% AUM fee then you likely have a better option. 2. Most teachers also have a 457b, do you? If so list every 457b your district has approved. 3. In addition to the 457b vendors, sometime...
by EdLaFave
Thu Jun 27, 2019 5:04 pm
Forum: Personal Investments
Topic: Traditional IRA Deduction Eligibility? 403b?
Replies: 6
Views: 314

Re: Traditional IRA Deduction Eligibility? 403b?

Lincoln Investment offers a Participant Directed Plan (PDP) in specific areas, New Jersey is one. That plan is absolutely worth using, the folks at 403bwise talk about it a good amount. Here is one thread: https://board.403bwise.com/topic/6361-lincoln-investments-participant-directed-platform/ Do yo...
by EdLaFave
Sun Jun 23, 2019 4:44 pm
Forum: Personal Investments
Topic: I don't understand which accounts to place investments in
Replies: 6
Views: 796

Re: I don't understand which accounts to place investments in

I figured a quick explanation of account types may be in order... At the highest level you have tax advantaged accounts (401k, IRA, HSA, etc.) and taxable accounts. When you own a fund in a taxable account it will generate distributions (dividends and capital gains) based on the stocks the fund hold...
by EdLaFave
Mon Jun 10, 2019 3:07 pm
Forum: Personal Investments
Topic: Do any teachers here use Aspire for 457 or 403(b) plans
Replies: 6
Views: 541

Re: Do any teachers here use Aspire for 457 or 403(b) plans

I documented Aspire here . You don’t need and shouldn’t use an advisor. It isn’t as good as elite plans like Vanguard and Fidelity. It’s in the next tier and still very much worth using if you’re already maxing out the Vanguard 403b and your IRA. If you’re in the right state, they may offer a state ...
by EdLaFave
Tue Jun 04, 2019 8:28 pm
Forum: Personal Investments
Topic: Really Bad 403(b) Options
Replies: 8
Views: 615

Re: Really Bad 403(b) Options

The 403b/457b world is a different animal. The folks saying that there must be good options or somebody should be there to provide information...well, that doesn’t match my experience. There is almost never some impartial third party that can just give you the information, instead you’re told to con...
by EdLaFave
Sun May 26, 2019 12:08 pm
Forum: Personal Investments
Topic: help with 403b committee fund changes
Replies: 7
Views: 460

Re: help with 403b committee fund changes

I was able to get our school district OCPS (FL) to add Vanguard and Fidelity to their 403b/457b line up (wrote about it several times on the blog section of my site). You can ask me questions if you’d like. Your first job is to educate and persuade everybody on the committee about what needs to be a...
by EdLaFave
Fri May 17, 2019 9:11 am
Forum: Personal Investments
Topic: 403b vs Roth 403b?
Replies: 20
Views: 1218

Re: 403b vs Roth 403b?

FiveK wrote:
Thu May 16, 2019 8:30 am
Anyway, seems we agree on things. :sharebeer
Absolutely :sharebeer
by EdLaFave
Thu May 16, 2019 8:15 am
Forum: Personal Investments
Topic: 403b vs Roth 403b?
Replies: 20
Views: 1218

Re: 403b vs Roth 403b?

Fortunately for financial optimization, however, the tax code doesn't force one to choose between 100% one or the other for an entire career. It is nice to have that flexibility. I wonder how many need and/or use it (I don’t). Once the expected marginal rate on withdrawals exceeds (or even equals -...
by EdLaFave
Thu May 16, 2019 6:26 am
Forum: Personal Investments
Topic: 403b vs Roth 403b?
Replies: 20
Views: 1218

Re: 403b vs Roth 403b?

Yes, as I suggested the effective tax rate is ultimately “irrelevant”. However, it is especially difficult to predict the marginal tax rate of each individual Traditional dollar in retirement. My point in bringing up the effective tax rate was: 1. If one was choosing between 100% Roth or 100% Tradit...
by EdLaFave
Wed May 15, 2019 1:54 pm
Forum: Personal Investments
Topic: 403b vs Roth 403b?
Replies: 20
Views: 1218

Re: 403b vs Roth 403b?

You haven’t really given enough information to answer a question that is already unanswerable (it requires knowledge of future tax rates, age of death, future SS policy, market return, etc), but you should read this: https://thefinancebuff.com/case-against-roth-401k.html I wrote software to model gr...
by EdLaFave
Wed May 15, 2019 11:27 am
Forum: Personal Investments
Topic: Help my broker is trying to freak me out
Replies: 94
Views: 14116

Re: Help my broker is trying to freak me out

Abandon the notion that this asset is “high” and this one is “low”. Embrace the reality that you can’t predict the future, except that a diversified portfolio will grow your wealth over decades, and then dump every spare penny into a reasonable allocation that doesn’t change with the seasons.

Done.
by EdLaFave
Sat May 11, 2019 9:42 am
Forum: Personal Investments
Topic: Help my broker is trying to freak me out
Replies: 94
Views: 14116

Re: Help my broker is trying to freak me out

You would be getting in at the top of the market. Since we’re betting on markets continually rising, this will often be true. Given that you have a broker, I assume you have investments, which means you’re already in at the top. VTI is fully diversified in terms of US stocks. You may or may not want...
by EdLaFave
Sat May 04, 2019 8:57 am
Forum: Personal Investments
Topic: Coming of age
Replies: 3
Views: 527

Re: Coming of age

Check out this page about what information you should include in your posts. You’ll get more informed responses. Nobody can predict future tax rates; I’m not going to try. Do you understand how the progressive tax system works? Anything you convert from a Traditional account to a Roth account is tax...
by EdLaFave
Thu May 02, 2019 1:45 am
Forum: Personal Investments
Topic: I have a 401k & 457b plan I can contribute too. Confused with what to do.
Replies: 14
Views: 816

Re: I have a 401k & 457b plan I can contribute too. Confused with what to do.

There are ways to easily access funds from a 401k for early retirees. Google 72t or Series of Substantially Equal Payments and you’ll find the rules.

However a 457b is more flexible when it comes to penalty free withdrawals because it doesn’t require a similar long term commitment.
by EdLaFave
Wed May 01, 2019 6:00 pm
Forum: Personal Investments
Topic: I have a 401k & 457b plan I can contribute too. Confused with what to do.
Replies: 14
Views: 816

Re: I have a 401k & 457b plan I can contribute too. Confused with what to do.

1. I wouldn’t split contributions. I’d invest 100% into whichever plan let’s you build a fully diversified portfolio for the lowest costs. 2. I argue that Traditional is best for the vast majority of people. This is largely due to the nature of our progressive tax code as well as the ability to do R...
by EdLaFave
Mon Apr 22, 2019 12:50 pm
Forum: Investing - Theory, News & General
Topic: Vanguard 403b Changes
Replies: 191
Views: 29573

Re: Vanguard 403b Changes

Prior to Vanguard outsourcing administration/record keeping to Newport Group, Vanguard would charge annual fees based on the number of funds you held. Now it’s a flat annual fee simply for having the account, regardless of the number of funds you hold. So you were paying fees of one kind or another ...
by EdLaFave
Mon Apr 22, 2019 8:01 am
Forum: Investing - Theory, News & General
Topic: Vanguard 403b Changes
Replies: 191
Views: 29573

Re: Vanguard 403b Changes

You can feel however you want to feel about it; it doesn’t impact me one bit. I just wanted people reading your comments to understand that the changes Vanguard made decreased costs for most (unless you have a small balance spread across a small number of funds). Multiple people with Vanguard 403bs ...
by EdLaFave
Mon Apr 22, 2019 6:19 am
Forum: Investing - Theory, News & General
Topic: Vanguard 403b Changes
Replies: 191
Views: 29573

Re: Vanguard 403b Changes

If Vanguard tried to pull any of this BS on the general retail investor funds, you can bet, despite our many years as fans, we would RUN at TOP SPEED to Fidelity. 1. The changes Vanguard made resulted in LOWER fees for people with moderate and large 403b balances. You’re acting as though they incre...
by EdLaFave
Sat Apr 06, 2019 1:03 pm
Forum: Personal Investments
Topic: IRA conversion to Roth
Replies: 25
Views: 1746

Re: IRA conversion to Roth

You’ve said your income is too high to contribute to a Traditional IRA. However, you haven’t explicitly said your income is too high to contribute directly to a Roth IRA. Those two limits are different, are you sure you’ve passed them both? There is nothing special about 50% of a Traditional IRA bei...
by EdLaFave
Thu Apr 04, 2019 12:44 pm
Forum: Personal Investments
Topic: Unexpected windfall
Replies: 14
Views: 2424

Re: Unexpected windfall

#1 Is the clear choice for me (although I personally don’t hold bonds in taxable), whether I have $1 or $1M dollars to invest. #2, #3, and #5 I wouldn’t want concentrated risk and I wouldn’t want a part/full time job. #4 What you want is total return don’t be tricked into the mindset that dividends ...
by EdLaFave
Thu Apr 04, 2019 12:38 pm
Forum: Personal Investments
Topic: Should I do a Backdoor Roth?
Replies: 4
Views: 339

Re: Should I do a Backdoor Roth?

You’re asking a question about your personal preferences. It is objectively in your best interest to do a Backdoor Roth. Everybody who would have to do a Backdoor Roth makes so much money that they certainly shouldn’t “need” the tax savings of the Backdoor Roth. I did it for the first time in 2018. ...
by EdLaFave
Fri Mar 29, 2019 6:58 pm
Forum: Personal Investments
Topic: How often do you check your accounts?
Replies: 53
Views: 3109

Re: How often do you check your accounts?

I don’t buy the premise that checking often is universally bad. I have a spreadsheet that updates in real time and I glance at it quite a bit throughout each day. I enjoy the sound and fury of the daily stock market swings. I don’t do anything with the constant real time data, it is pure entertainme...
by EdLaFave
Tue Mar 26, 2019 7:55 am
Forum: Personal Investments
Topic: Need help deciding between Traditional or Roth IRA for my spouse
Replies: 4
Views: 288

Re: Need help deciding between Traditional or Roth IRA for my spouse

I don’t have a specific answer, in part because I can’t comment on the tax-ability of a seemingly vague windfall, but here is some information to help you figure out the IRA limits. 1. You need to calculate your modified AGI to determine eligibility to make an IRA contribution. 2. In 2018 the deduct...
by EdLaFave
Sun Mar 17, 2019 10:04 am
Forum: Personal Investments
Topic: Backdoor Roth Quick Question
Replies: 6
Views: 227

Re: Backdoor Roth Quick Question

Are you saying you made a 2018 non-deductible contribution to a Traditional IRA and now you’re converting it to a Roth IRA? As I understand it, converting and contributing are two entirely different things. If you made a 2018 Traditional IRA contribution then you can convert it to Roth in ANY year w...
by EdLaFave
Sun Mar 10, 2019 12:51 pm
Forum: Personal Investments
Topic: 457 vs. taxable account
Replies: 19
Views: 1356

Re: 457 vs. taxable account

very few people can have zero income while employed with government job as civil service. I don’t understand what concept you’re communicating. Yes, employed people should have income. Dave will have to hope for 1) market crash and have cash to convert at zero income 2) get back his old civil servi...
by EdLaFave
Sun Mar 10, 2019 11:35 am
Forum: Personal Investments
Topic: 457 vs. taxable account
Replies: 19
Views: 1356

Re: 457 vs. taxable account

What do you mean by the "market rate?" I just meant whatever the annualized stock market return is during the N years it remains invested. Under Roth wouldn't you also exploit the benefits of the progressive income tax system, since earned income is all taxed at different rates on the lowest, the n...
by EdLaFave
Sun Mar 10, 2019 10:19 am
Forum: Personal Investments
Topic: 457 vs. taxable account
Replies: 19
Views: 1356

Re: 457 vs. taxable account

If you are in a 22% tax bracket, then putting $19,000 in a traditional account has the same cost to you as putting $14,820 in a Roth account, and then the common terms work as intended; the Roth has the same value if you withdraw the money at a 22% marginal tax rate. Your last statement is accurate...
by EdLaFave
Sun Mar 10, 2019 9:58 am
Forum: Personal Investments
Topic: 457 vs. taxable account
Replies: 19
Views: 1356

Re: 457 vs. taxable account

I'm following the Dave Ramsey plan and believe what he says about most of the gains in mutual funds to be the grow on the money invested, so at retirement it's the growth that would be completely tax free with the Roth, which is the vast majority of the gains in retirement funds. If I take the dedu...
by EdLaFave
Sat Mar 09, 2019 11:22 am
Forum: Personal Investments
Topic: Easiest way to handle Roth IRA overcontribution?
Replies: 13
Views: 922

Re: Easiest way to handle Roth IRA overcontribution?

This is what I would do: 1. Recharacterize the partial contribution plus earnings to Tira. 2. Move the earnings plus any existing traditional IRA funds to your 401k. 3. Convert the partial contribution that's now in your Tira back to Roth IRA. That seems easier and less steps than what you're think...
by EdLaFave
Sat Mar 09, 2019 9:21 am
Forum: Personal Investments
Topic: 457 vs. taxable account
Replies: 19
Views: 1356

Re: 457 vs. taxable account

I’m not sure if I’ve got this right, but it sounds like you’ve currently got 22k in cash, you’re about to get another 10.4k, and you want to know what you should do with it (with the assumption being that maximizing tax advantaged investments is the goal). Well, we’re coming up on the 2018 tax deadl...
by EdLaFave
Fri Mar 08, 2019 8:25 am
Forum: Personal Investments
Topic: Easiest way to handle Roth IRA overcontribution?
Replies: 13
Views: 922

Re: Easiest way to handle Roth IRA overcontribution?

Great advice.

Thanks for taking the time to teach me this stuff. I was feeling overwhelmed, but I think this is the right path and I think I've got it under control now.
by EdLaFave
Thu Mar 07, 2019 11:54 am
Forum: Personal Investments
Topic: Easiest way to handle Roth IRA overcontribution?
Replies: 13
Views: 922

Re: Easiest way to handle Roth IRA overcontribution?

Thank you, I found your thoughts on the backdoor Roth to be convincing. These are the steps I think are necessary, can you confirm I'm right: 1. Have Vanguard rollover my Traditional IRA to my employer's 401k. 2. Have Vanguard re-characterize my $1,480 Roth over-contribution and move it (along with ...
by EdLaFave
Thu Mar 07, 2019 8:52 am
Forum: Personal Investments
Topic: Easiest way to handle Roth IRA overcontribution?
Replies: 13
Views: 922

Re: Easiest way to handle Roth IRA overcontribution?

If you go this route, I would not use the word "distribution". You want to withdraw or get a return of an excess contribution - as if the contribution never happened. This must be done by the custodian. You cannot just take the money out. Agreed. Poor word choice on my part. How much is "a bit"? Yo...
by EdLaFave
Thu Mar 07, 2019 8:26 am
Forum: Personal Investments
Topic: Easiest way to handle Roth IRA overcontribution?
Replies: 13
Views: 922

Easiest way to handle Roth IRA overcontribution?

I maxed out my Roth IRA in early 2018 and then earned enough income such that my contribution limit partially phased out. This means I had a $1,480 overcontribution. Option 1 seems to be to make an “excess contribution withdrawal” from the Roth equal to $1,480 plus earnings. The implication seems to...
by EdLaFave
Mon Mar 04, 2019 2:23 pm
Forum: Personal Investments
Topic: Is the VALIC 403b any good?
Replies: 28
Views: 1356

Re: Is the VALIC 403b any good?

Valic is not a good option. You’ll definitely want to enumerate all of the approved 403b vendors. In Orange County (FL) that information was available on TSA Consulting Group’s web site because they serve as our Third Party Administrator (TPA) and the information was available through our district’s...
by EdLaFave
Fri Mar 01, 2019 1:35 pm
Forum: Personal Investments
Topic: Picking funds for state job 457(b)
Replies: 8
Views: 580

Re: Picking funds for state job 457(b)

You’ve gotten great advice. I don’t know if you made a typo, but the maximum contribution for a 457b is now $19,000 (as the previous poster noted). Also, assuming you have more to invest, have you considered also investing in a 403b? If you list your available vendors, I can help identify a low cost...
by EdLaFave
Wed Feb 27, 2019 5:14 pm
Forum: Personal Investments
Topic: Roll over: Wash sale?
Replies: 11
Views: 473

Re: Roll over: Wash sale?

We aren’t saying the same thing. He made his opinion pretty clear: I'll put this as plainly as I can...The only tax consequences related to retirement accounts occur ONLY when pre-tax dollars are withdrawn from the account without any type of exception or if an excess contribution is made. Thats it ...