Search found 377 matches

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: 508

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: 598

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: 452

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: 1194

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: 1194

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: 1194

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: 1194

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: 13864

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: 13864

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: 516

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: 801

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: 801

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: 29260

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: 29260

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: 29260

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: 1726

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: 2408

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: 334

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: 3072

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: 283

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: 225

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: 1326

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: 1326

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: 1326

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: 1326

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: 866

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: 1326

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: 866

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: 866

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: 866

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: 866

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: 1271

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: 557

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: 467

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 ...
by EdLaFave
Wed Feb 27, 2019 2:18 pm
Forum: Personal Investments
Topic: Roll over: Wash sale?
Replies: 11
Views: 467

Re: Roll over: Wash sale?

Complete and utter nonsense. 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. Thats it and nothing else! You are objectively wrong. I know for a fact that the IR...
by EdLaFave
Wed Feb 27, 2019 1:34 pm
Forum: Personal Investments
Topic: Roll over: Wash sale?
Replies: 11
Views: 467

Re: Roll over: Wash sale?

I believe these answers are incorrect if they’re interpreted to mean there aren’t wash sale considerations with respect to retirement accounts. I believe the IRS has said a wash sale can be triggered from an IRA. I believe the IRS has not weighed in on other retirement accounts like 401ks. The vague...
by EdLaFave
Wed Feb 27, 2019 10:29 am
Forum: Personal Investments
Topic: 403b needs attention
Replies: 8
Views: 458

Re: 403b needs attention

At this time I am working to max out my ROTH Again, this is a meaningless statement without telling us more information. It could mean you’re working to max out a Roth 403b at Aspire, it could mean you’re working to max out a Roth IRA, it could mean anything. I have an older 403b...the fees are on ...
by EdLaFave
Wed Feb 27, 2019 8:35 am
Forum: Personal Investments
Topic: 403b needs attention
Replies: 8
Views: 458

Re: 403b needs attention

I don’t know what you mean when you say you’re going Roth to Vanguard. I think any “tax advantaged account” (401k, 403b, 457b, IRA, etc.) can be either Roth or Traditional and can be held at any number of institutions of which Vanguard is just one. I’m guessing you’re telling us you moved your Roth ...
by EdLaFave
Sun Feb 17, 2019 10:26 am
Forum: Personal Investments
Topic: Security benefits: nea directinvest issues
Replies: 7
Views: 578

Re: Security benefits: nea directinvest issues

The nerve to ask for an invented-on-the-fly AUM fee to allow you to enroll in an approved vendor’s self-directed plan infuriates me. I would not maintain my composure if they went from saying the plan doesn’t exist to saying you can enroll in it, but only if you pay them off. The only reason you wan...
by EdLaFave
Sat Feb 09, 2019 4:39 pm
Forum: Personal Finance (Not Investing)
Topic: Reduced Roth IRA Contribution Limit --- Married Filing Jointly
Replies: 2
Views: 230

Re: Reduced Roth IRA Contribution Limit --- Married Filing Jointly

That’s disappointing because my spouse and I keep money separate and they’re not using their reduced 4K contribution limit. I sure would like to make use of their reduced contribution limit. I guess I’m going to have to look into undoing my Roth IRA overcontribution and look into a backdoor Roth, bu...
by EdLaFave
Sat Feb 09, 2019 3:28 pm
Forum: Personal Finance (Not Investing)
Topic: Reduced Roth IRA Contribution Limit --- Married Filing Jointly
Replies: 2
Views: 230

Reduced Roth IRA Contribution Limit --- Married Filing Jointly

Here is the link to Worksheet 2-2. Determining Your Reduced Roth IRA Contribution Limit from Publication 590-A (2018), Contributions to Individual Retirement Arrangements (IRAs). My question pertains to Step 6 where you're told to "Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or ...
by EdLaFave
Thu Dec 27, 2018 11:17 am
Forum: Personal Finance (Not Investing)
Topic: Help resolving overcontribution to 401k.
Replies: 9
Views: 653

Help resolving overcontribution to 401k.

Due to changing jobs mid-year and a clerical error by my new employer, I contributed more than the $18,500 annual limit to my 401k. I have serious doubts that my company and 401k provider (Principal) has handled this properly and I’m looking for insight/help. Roughly two weeks after the overcontribu...
by EdLaFave
Tue Dec 18, 2018 5:58 pm
Forum: Investing - Theory, News & General
Topic: Vanguard 403b Changes
Replies: 191
Views: 29260

Re: Vanguard 403b Changes

Does anybody know if this will apply to taxable, IRA, etc accounts?

I’ve been waiting for lower priced target date funds for a long time.
by EdLaFave
Tue Nov 27, 2018 10:54 am
Forum: Personal Investments
Topic: Avoiding wash sale
Replies: 27
Views: 1754

Re: Avoiding wash sale

It is also worth mentioning that if you received a dividend on shares and then sell then too soon (60-ish days, google for the exact duration) then even the qualified portion of the distribution will now be considered unqualified (i.e. higher taxes).

So the wash sale isn’t the only consideration.
by EdLaFave
Sun Nov 25, 2018 1:46 pm
Forum: Personal Investments
Topic: Avoiding wash sale
Replies: 27
Views: 1754

Re: Avoiding wash sale

The IRS has explicitly said you can trigger a wash sale with IRA and taxable transactions. They haven’t explicitly said anything about accounts outside of taxable and IRA accounts. In my opinion... If the spirit of the wash sale rule is blindly applied then I see no reason it wouldn’t apply to every...
by EdLaFave
Tue Oct 23, 2018 9:20 pm
Forum: Personal Investments
Topic: Avoiding excess HSA contributions.
Replies: 21
Views: 2235

Re: Avoiding excess HSA contributions.

contributions made to your HSA that wouldn’t have been made except for the last-month rule are not considered excess contributions . If you were to incorrectly remove those as excess contributions you would have a bigger problem. They would be considered non-qualified distributions subject to a 20%...
by EdLaFave
Sun Oct 21, 2018 2:44 am
Forum: Personal Investments
Topic: Avoiding excess HSA contributions.
Replies: 21
Views: 2235

Re: Avoiding excess HSA contributions.

Gryphon, doing that in combination with pro-rating the employer contribution would seemingly prevent tax issues, but that doesn’t seem to be an option for me. JustinR, I agree. Perhaps they didn’t want to penalize or complicate life for people like me who become HSA eligible at the end of the year a...
by EdLaFave
Sun Oct 21, 2018 1:04 am
Forum: Personal Investments
Topic: Avoiding excess HSA contributions.
Replies: 21
Views: 2235

Re: Avoiding excess HSA contributions.

It might be the case that COBRA and an HDHP plan would be more expensive than the health plans I’m likely to have access to when my employment at this new company is terminated. The difference may be significant enough that it might be worth paying the extra the taxes/fees associated with excess con...
by EdLaFave
Sat Oct 20, 2018 11:23 pm
Forum: Personal Investments
Topic: Avoiding excess HSA contributions.
Replies: 21
Views: 2235

Avoiding excess HSA contributions.

Background information 1) I'm about to start a new job where I'll have an individual HDHP and an HSA. 2) I'll be paid once every two weeks. 3) The company contributes $1,500/year to the HSA (once right when I'm hired and then every January thereafter). I plan to contribute another $1,950/year to hi...
by EdLaFave
Fri Oct 12, 2018 2:33 pm
Forum: Personal Investments
Topic: Higher fee index fund or lower fee actively managed fund for 403(b)
Replies: 9
Views: 720

Re: Higher fee index fund or lower fee actively managed fund for 403(b)

One of our vendors is a local credit union and among their options is Vanguard Index Total Stock Market. The combined expense ratio + mgmt/admin fees is 0.94% The other vendor is American Century Investments. I feel like I could probably choose the Government Bond Fund at a 0.47% expense ratio 1) I...