new to investing looking for advice

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twee
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Joined: Tue Feb 28, 2017 4:33 pm

new to investing looking for advice

Postby twee » Tue Feb 28, 2017 4:57 pm

Hello! Short introduction about myself. I am 29 and hadn't really thought about finances or retirement seriously until now. I recently changed jobs with a much shorter commute (adding 3 hours to each day) and am planing to use a portion of that for learning and applying financial planning (mostly so that I won't need to think about it in the long run)

Currently I have
- 403B (previous employer) - $14,983.39 at 3.76% YTD (~ 2 years)
- Defined Contribution Plan - $2,372.13 at 4.07% YTD (~ 2 years)
- Traditional IRA FDEWX 2055 - $2,500 (allocated today)
- Traditional IRA (another fidelity index fund) - $3,000 (allocated today)
- $50,000 (bank) + $20,000 (cash) emergency fund
- $300,000 to invest (not allocated)
- $138,000 salary currently with 10% to go to 403B account

A couple of notes
- I will be helping to pay off ~$200,000 higher education loans (from SO) - planning to maximize lifetime learning tax credit (would need to marry to qualify for income range)
- I plan to up my contribution to 403B account to max ($18,000) - no employer match
- I plan to put in $5,500 into both Roth IRA and traditional IRA
- I'm planning to read The Bogleheads' Guide to Investing and The Bogleheads' Guide to Retirement Planning
- I am currently going through If You Can from Bernstein (started today)
- I currently don't have any rent/mortgage or overhead expenses

Would like your help
- Would appreciate your advice on what steps I should be taking to educate myself and to what extent with the goal of not needing to think about this every day after it is set up.


Thanks for all your help!

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Duckie
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Re: new to investing looking for advice

Postby Duckie » Tue Feb 28, 2017 10:43 pm

twee, welcome to the forum.

twee wrote:- 403B (previous employer) - $14,983.39

What are the options (fund names, ticker symbols, plan expense ratios)? List not only what you currently have but what you could have.

- Defined Contribution Plan - $2,372.13

Again, list all the options. Will this plan allow incoming rollovers?

- Traditional IRA FDEWX 2055 - $2,500 (allocated today)
- Traditional IRA (another fidelity index fund) - $3,000 (allocated today)

FDEWX is a target-date fund. Mixing balanced funds with separate funds can make things complicated. What is the other fund?

- $50,000 (bank) + $20,000 (cash) emergency fund

What is the $50,000 for?

- I plan to put in $5,500 into both Roth IRA and traditional IRA

You are limited to $5,500 total for IRA contributions. Since you mention a Defined Contribution Plan it is unlikely any TIRA contributions would be deductible. In that case put $5,500 into a Roth IRA.

- Would appreciate your advice on what steps I should be taking to educate myself and to what extent with the goal of not needing to think about this every day after it is set up.

Fill out the Asking Portfolio Questions template. And read the Wiki.

bjames310
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Joined: Wed Dec 14, 2016 3:18 pm

Re: new to investing looking for advice

Postby bjames310 » Wed Mar 01, 2017 1:48 am

31 here, and recently started on this forum too (just three months ago in December). I read Bogleheads Guide to Investing too. I highly recommend All About Asset Allocation by Richard Ferri, Investors Manifesto by William Bernstein, and The Little Book of Common Sense Investing by jack bogle. Your Money or Your Life was also good and eye opening for how to save more and be a disciplined spender, although I've got to admit I haven't had the disclipline to follow the homework from each chapter. For me, these books have complemented each other, but the Asset Allocation book really got into great detail about the different types of funds out there and how to come up with an allocation plan (whereas some of the other books only had a chapter or two on the subject).

twee
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Joined: Tue Feb 28, 2017 4:33 pm

Re: new to investing looking for advice

Postby twee » Wed Mar 01, 2017 12:45 pm

Thanks for your advice and feedback! Will look into this and provide additional information

twee
Posts: 10
Joined: Tue Feb 28, 2017 4:33 pm

Re: new to investing looking for advice

Postby twee » Fri Mar 03, 2017 11:35 am

editing to add missing 403B allocations

Duckie wrote:twee, welcome to the forum.

twee wrote:- 403B (previous employer) - $14,983.39

What are the options (fund names, ticker symbols, plan expense ratios)? List not only what you currently have but what you could have.


I don't understand this - "list not only what you currently have but what you could have" - what is could have?
I don't see the ticker symbol on any of the reports provided (where can I find this information?)

"stability of principle"
This is what was in the report for the stable value option (28.71%) expense 0.75%
Sector Holdings (as of 12/31/2016)
Asset Backed Securities 14.4
Commercial Mortgage Backed Securities 7.5
Corporates 29.8
MBS Pass Through 25.2
Non-Agency 2.0
US Treasury & Cash 21.1

Statistical Data (as of 12/31/2016)
Portfolio Duration (years) 5.67
Yield to Maturity 3.01%
Average Life (years) 7.684

"bonds"
Metropolitan West Total Return Bond Fund - Plan Class (4.69%) expense 0.76%
AB Global Bond Fund - Class I (4.54%) expense 1.18%
T. Rowe Price Institutional High Yield Fund (10.21%) expense 1.00%

"asset allocation"
Vanguard® Target Retirement 2050 Fund - Investor Shares (5.11%) expense 0.32%

"large cap value"
Vanguard® Institutional Index Fund - Institutional Shares (10.62%) expense 0.04%

"large cap growth"
American Funds® The Growth Fund of America® - Class R-6 (5.35%) expense 0.66%
T. Rowe Price Institutional Large-Cap Growth Fund (5.36%) expense 1.12%
Vanguard® Growth Index Fund - Institutional Shares (5.26%) expense 0.14%

"small/mid/specialty"
AB Discovery Value Fund - Class I (5.46%) expense 1.76%

"global/international"
American Funds® EuroPacific Growth Fund® - Class R-6 (4.86%) expense 1.00%
Wells Fargo Emerging Markets Equity Fund - Institutional Class (5.04%) expense 2.50%
Vanguard Total International Stock Index Fund - Institutional Shares (4.79%) expense 0.20%


Duckie wrote:
twee wrote:- Defined Contribution Plan - $2,372.13

Again, list all the options. Will this plan allow incoming rollovers?


What is incoming rollover? Is this the ability to put more money into this fund? Or the ability to transfer this to another fund?
In this, I think it was done automatically (I don't remember selecting any funds)
"medium risk portfolio" (100%) expense 0.38%
- from the report -
Sixty percent (60%) of the total fund
assets are allocated to equities and forty percent
(40%) are allocated to fixed income securities

4.33% in the BlackRock Low Duration Bond Portfolio – Institutional Shares
4.34% in the JPMorgan Short Duration Bond – Class R6 Shares
7% in the Metropolitan West Total Return Bond Fund - Plan Class Shares
3% in the AB Global Bond Fund – Class I
22.5% in the Vanguard® Institutional Index Fund – Institutional Class
4.33% in the Wells Fargo Short Duration Government Bond Fund – Institutional Class
3% in the Wells Fargo Discovery Fund – Institutional Class
5% in the MFS® Institutional International Equity Fund
14.5% in the Vanguard® Total International Stock Index Fund – Institutional Class
5% in the Wells Fargo Emerging Markets Equity Fund – Institutional Class
10% in the Vanguard® Total Bond Market Index Fund – Institutional Shares
5% in the GMO Benchmark-Free Allocation Fund - Class R6
4% in the Loomis Sayles Core Plus Bond Fund – Class N
5% in the AQR International Equity Fund – Class I Shares
3% in the AB Discovery Value Fund – Class I

Duckie wrote:
twee wrote:- Traditional IRA FDEWX 2055 - $2,500 (allocated today)
- Traditional IRA (another fidelity index fund) - $3,000 (allocated today)

FDEWX is a target-date fund. Mixing balanced funds with separate funds can make things complicated. What is the other fund?


Correction FUSEX with $2519.90 and FDEWX with $3013.88
Why does mixing balanced funds with separate funds make things complicated?

Duckie wrote:
twee wrote:- $50,000 (bank) + $20,000 (cash) emergency fund

What is the $50,000 for?


It's what I have saved from my previous job (2.5 years) so far. I hadn't thought about investing or retirement so it's just sitting in a checking account

Duckie wrote:
twee wrote: - I plan to put in $5,500 into both Roth IRA and traditional IRA

You are limited to $5,500 total for IRA contributions. Since you mention a Defined Contribution Plan it is unlikely any TIRA contributions would be deductible. In that case put $5,500 into a Roth IRA.


Thanks for clearing that up! I thought you could add $5,500 to each account. Why does a Defined Contribution Plan prevent TIRA contributions from being tax deductible?

Duckie wrote:
twee wrote:- Would appreciate your advice on what steps I should be taking to educate myself and to what extent with the goal of not needing to think about this every day after it is set up.

Fill out the Asking Portfolio Questions template. And read the Wiki.


Emergency funds: yes
Debt: no for me, yes for SO (~$200,000 - unsure about interest rate, loan is for higher education)
Tax Filing Status: Single
Tax Rate: 28% Federal, 9.3% State
State of Residence: CA
Age: 29
Desired Asset allocation: xx% stocks / xx% bonds - unsure
Desired International allocation: xx% of stocks - unsure

will read wiki, thanks!

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Duckie
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Re: new to investing looking for advice

Postby Duckie » Fri Mar 03, 2017 5:27 pm

twee wrote:
Duckie wrote:What are the options (fund names, ticker symbols, plan expense ratios)? List not only what you currently have but what you could have.

I don't understand this - "list not only what you currently have but what you could have" - what is could have?

What you currently have means which options you have chosen to invest in. What you could have means all the options. Sometimes when asked for options people only list what they are invested in. We need to see everything to make informed recommendations.

I don't see the ticker symbol on any of the reports provided (where can I find this information?)

Your HR department may have the information. You can use Google to find information about most of them (although the share class may be different).

403B (previous employer)

The best options of those listed are:
  • Vanguard Institutional Index Fund 0.04% -- Large caps, 80% of US stocks
  • Vanguard Total International Stock Index Fund 0.20% -- Complete international stocks
  • Metropolitan West Total Return Bond Fund 0.76% -- US bonds, expensive
  • or one of the Target Retirement funds -- whichever comes closest to your AA
It looks like you own a little bit of every fund mentioned. Do you? Some of those expense ratios are crazy high.

What is incoming rollover? Is this the ability to put more money into this fund? Or the ability to transfer this to another fund?

Some employer plans allow for incoming rollovers from IRAs and other tax-sheltered plans. If your plan does you could roll your old 403b and IRAs over to your current DCP. Whether you want to depends on the options available.

Defined Contribution Plan

You only listed one option, the "medium risk portfolio". We need all the options.

Why does mixing balanced funds with separate funds make things complicated?

It makes rebalancing more difficult because target-date funds have their own AA and you have to integrate it into the rest of the portfolio. It can be done, it just means more math.

What is the $50,000 for?

It's what I have saved from my previous job (2.5 years) so far. I hadn't thought about investing or retirement so it's just sitting in a checking account

After thinking about it do you want to invest it for a long-term purpose like retirement?

Why does a Defined Contribution Plan prevent TIRA contributions from being tax deductible?

It depends on your income. When you have an employer plan and your income gets high enough you can't deduct TIRA contributions. See here.

twee
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Joined: Tue Feb 28, 2017 4:33 pm

Re: new to investing looking for advice

Postby twee » Mon Mar 06, 2017 12:09 pm

Thanks for your feedback, it's really helpful. I'm really grateful for your time and energy
For the ticker symbols, I just googled them

twee wrote:- 403B (previous employer) - $14,983.39


"stability of principle"
This is what was in the report for the stable value option (28.71%) expense 0.75%
Sector Holdings (as of 12/31/2016)
Asset Backed Securities 14.4
Commercial Mortgage Backed Securities 7.5
Corporates 29.8
MBS Pass Through 25.2
Non-Agency 2.0
US Treasury & Cash 21.1

Statistical Data (as of 12/31/2016)
Portfolio Duration (years) 5.67
Yield to Maturity 3.01%
Average Life (years) 7.684

"bonds"
MUTF: MWTSX - Metropolitan West Total Return Bond Fund - Plan Class (4.69%) expense 0.76%
MUTF: ANAIX - AB Global Bond Fund - Class I (4.54%) expense 1.18%
MUTF: TRHYX - T. Rowe Price Institutional High Yield Fund (10.21%) expense 1.00%

"asset allocation"
MUTF: VFIFX - Vanguard® Target Retirement 2050 Fund - Investor Shares (5.11%) expense 0.32%

"large cap value"
MUTF: VINIX - Vanguard® Institutional Index Fund - Institutional Shares (10.62%) expense 0.04%

"large cap growth"
MUTF: RGAGX - American Funds® The Growth Fund of America® - Class R-6 (5.35%) expense 0.66%
MUTF: TRLGX - T. Rowe Price Institutional Large-Cap Growth Fund (5.36%) expense 1.12%
MUTF: VIGIX - Vanguard® Growth Index Fund - Institutional Shares (5.26%) expense 0.14%

"small/mid/specialty"
MUTF: ABSIX - AB Discovery Value Fund - Class I (5.46%) expense 1.76%

"global/international"
MUTF: RERGX - American Funds® EuroPacific Growth Fund® - Class R-6 (4.86%) expense 1.00%
EMGNX - Wells Fargo Emerging Markets Equity Fund - Institutional Class (5.04%) expense 2.50%
MUTF: VTSNX - Vanguard Total International Stock Index Fund - Institutional Shares (4.79%) expense 0.20%

Duckie wrote:The best options of those listed are:
Vanguard Institutional Index Fund 0.04% -- Large caps, 80% of US stocks
Vanguard Total International Stock Index Fund 0.20% -- Complete international stocks
Metropolitan West Total Return Bond Fund 0.76% -- US bonds, expensive
or one of the Target Retirement funds -- whichever comes closest to your AA
It looks like you own a little bit of every fund mentioned. Do you? Some of those expense ratios are crazy high.


I selected the general allocations (did not go into details in selecting which exact funds) when I first started at my previous employer. This is what's showing up in my account portfolio/summary. Would you recommend re-allocating the funds to the lower expense funds that you mentioned above + the target retirement fund?

Duckie wrote:
twee wrote:- Defined Contribution Plan - $2,372.13

You only listed one option, the "medium risk portfolio". We need all the options.


I think it comes out to all of the equities (60%) and fixed income securities (40%) below
"medium risk portfolio" (100%) expense 0.38%

MUTF: BFMSX 4.33% in the BlackRock Low Duration Bond Portfolio – Institutional Shares
JSDUX 4.34% in the JPMorgan Short Duration Bond – Class R6 Shares
MUTF: MWTSX 7% in the Metropolitan West Total Return Bond Fund - Plan Class Shares
MUTF: ANAIX 3% in the AB Global Bond Fund – Class I
VINIX 22.5% in the Vanguard® Institutional Index Fund – Institutional Class
WSGIX 4.33% in the Wells Fargo Short Duration Government Bond Fund – Institutional Class
WFDDX 3% in the Wells Fargo Discovery Fund – Institutional Class
MUTF: MIEIX 5% in the MFS® Institutional International Equity Fund
VTSNX 14.5% in the Vanguard® Total International Stock Index Fund – Institutional Class
EMGAX 5% in the Wells Fargo Emerging Markets Equity Fund – Institutional Class
MUTF: VBTIX 10% in the Vanguard® Total Bond Market Index Fund – Institutional Shares
MUTF: GBMRX 5% in the GMO Benchmark-Free Allocation Fund - Class R6
MUTF: NERNX 4% in the Loomis Sayles Core Plus Bond Fund – Class N
MUTF: AQIIX 5% in the AQR International Equity Fund – Class I Shares
MUTF: ABSIX 3% in the AB Discovery Value Fund – Class I

TIRA - FUSEX with $2519.90 and FDEWX with $3013.88

Duckie wrote:Some employer plans allow for incoming rollovers from IRAs and other tax-sheltered plans. If your plan does you could roll your old 403b and IRAs over to your current DCP. Whether you want to depends on the options available.

Is DCP post-tax or pre-tax? When would moving a TIRA into DCP make sense? What other options should be considered?

Duckie wrote:After thinking about it do you want to invest it for a long-term purpose like retirement?

Yea, I'm looking to invest 300k-350k

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Duckie
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Re: new to investing looking for advice

Postby Duckie » Mon Mar 06, 2017 6:04 pm

twee wrote:- 403B (previous employer)

Just to be clear. Are you allowed to pick and choose from the options listed? Could you pick just one fund for your entire account? Just two funds?

Would you recommend re-allocating the funds to the lower expense funds that you mentioned above + the target retirement fund?

It depends on your other accounts but in the 403b the three individual funds would be fine. Don't mix individual funds with balanced funds (the target-retirement fund). It makes figuring your AA more difficult.

I think it comes out to all of the equities (60%) and fixed income securities (40%) below
"medium risk portfolio" (100%) expense 0.38%

These are the components in the "medium risk portfolio". Do you have any other options besides "medium risk"? Can you get some of the component funds on their own or do you have to get them as a group?

Is DCP post-tax or pre-tax?

Yours is probably pre-tax. It would say Roth otherwise.

When would moving a TIRA into DCP make sense?

Moving a TIRA into an employer plan might make sense if the employer plan options are good and very inexpensive. It also would make sense if you need to use the Backdoor Roth IRA method because your income is too high to contribute to a Roth IRA directly and need to "hide" the TIRA to avoid pro-rata rule issues.

Kevin22751
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Re: new to investing looking for advice

Postby Kevin22751 » Mon Mar 06, 2017 9:29 pm

Twee.... Welcome to the Forum. Glad to have you aboard !! Your choice of reading/study material is excellent. A book that I would add to the list is a bit on the lighter side.... "The Coffee House Investor" by Bill Schultheis. Bill is a recovering Smith-Barney broker that now "gets it". It's a fun and quick read. I've given copies to friends and they love it.

Good luck to you.... Kevin

twee
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Re: new to investing looking for advice

Postby twee » Tue Mar 07, 2017 1:22 pm

Duckie wrote:
twee wrote:- 403B (previous employer)

Just to be clear. Are you allowed to pick and choose from the options listed? Could you pick just one fund for your entire account? Just two funds?

For the 403B, I can re-allocate (it's entirely customize-able). I just really didn't know what I was doing so I just took a bit of everything.

Duckie wrote:
Would you recommend re-allocating the funds to the lower expense funds that you mentioned above + the target retirement fund?

It depends on your other accounts but in the 403b the three individual funds would be fine. Don't mix individual funds with balanced funds (the target-retirement fund). It makes figuring your AA more difficult.

What is AA? And why is it more difficult when mixing individual funds with balanced funds?

Duckie wrote:
I think it comes out to all of the equities (60%) and fixed income securities (40%) below
"medium risk portfolio" (100%) expense 0.38%

These are the components in the "medium risk portfolio". Do you have any other options besides "medium risk"? Can you get some of the component funds on their own or do you have to get them as a group?

This isn't customize-able and just comes as is

Duckie wrote:
Is DCP post-tax or pre-tax?

Yours is probably pre-tax. It would say Roth otherwise.

Ok thanks! That makes sense.

Duckie wrote:
When would moving a TIRA into DCP make sense?

Moving a TIRA into an employer plan might make sense if the employer plan options are good and very inexpensive. It also would make sense if you need to use the Backdoor Roth IRA method because your income is too high to contribute to a Roth IRA directly and need to "hide" the TIRA to avoid pro-rata rule issues.

If I contribute enough to my 403B (currently set to 10% - 13.8k) so that my income falls under 132k, I'd qualify to contribute a reduced amount to Roth IRA right? Without doing the math, it seems to make more sense to not get double taxed (as would happen in the Backdoor Roth IRA). I'm thinking my filing status will change to married filing jointly within the next 2 years and the combined income will still stay under 184k-194k for 2-3 years after married status.
This year (2016) my income is under 90k, so would it make sense for me to put money into TIRA (edit 3/7/17 11:09AM - just realized that I wouldn't qualify for a deduction so the traditional IRA wouldn't really make sense) or Roth IRA (income tax rate is 25% at this range I think)?

Thanks!
Last edited by twee on Tue Mar 07, 2017 2:09 pm, edited 1 time in total.

twee
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Re: new to investing looking for advice

Postby twee » Tue Mar 07, 2017 1:24 pm

Kevin22751 wrote:Twee.... Welcome to the Forum. Glad to have you aboard !! Your choice of reading/study material is excellent. A book that I would add to the list is a bit on the lighter side.... "The Coffee House Investor" by Bill Schultheis. Bill is a recovering Smith-Barney broker that now "gets it". It's a fun and quick read. I've given copies to friends and they love it.

Good luck to you.... Kevin


Thanks! Will definitely add this to my list of books to read. The books I ordered just came in so I'll start with those.
Just wondering how others read these kinds of books - is this a read once or twice kind of book? Or would it be something that I want to re-read every week/month/year? I don't have photographic memory and tend to forget content especially if I'm disengaged

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Duckie
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Re: new to investing looking for advice

Postby Duckie » Tue Mar 07, 2017 7:48 pm

twee wrote:For the 403B, I can re-allocate (it's entirely customize-able).

Good.

What is AA? And why is it more difficult when mixing individual funds with balanced funds?

Asset allocation is the ratio of stocks to bonds. Figuring your current AA takes more math when mixing individual funds with balanced funds. For example, figuring out the AA in your DCP is just adding percentages up. That's until you hit GBMRX which is a balanced fund (a balanced fund inside a balanced fund). That means more figuring.

Can you get some of the component funds on their own or do you have to get them as a group?

This isn't customize-able and just comes as is

If that's your only option in the DC plan then we'll work with it.

If I contribute enough to my 403B (currently set to 10% - 13.8k) so that my income falls under 132k, I'd qualify to contribute a reduced amount to Roth IRA right?

The phase-out range for 2017 is $118K to $133K.

Without doing the math, it seems to make more sense to not get double taxed (as would happen in the Backdoor Roth IRA).

You aren't double taxed using the backdoor method as long as you keep track of your basis. However, the TIRAs will get in the way. Have you checked with the DCP to see if it allows incoming rollovers?

Here's an example of a retirement portfolio including the taxable. You're age 29 so I'm giving you an AA of 80% stocks, 20% bonds, with 30% of stocks in international. That breaks down to 56% US stocks, 24% international stocks, and 20% bonds. Because of the overwhelming taxable account and the limited decent options in your employer plans you'll have to put bonds in taxable, something I'm not fond of. You could have something like:

Taxable at Vanguard -- $300K -- 93%
51% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)
24% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
18% (VWIUX) Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares (0.09%)

Old 403b -- $15K -- 4%
4% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.04%)

Current DCP -- $2K -- 1%
1% Medium Risk Portfolio (0.38%)

Traditional IRA at Vanguard -- $5.5K -- 2%
2% (VBMFX) Vanguard Total Bond Market Index Fund Investor Shares (0.16%)

Something to think about.

twee
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Re: new to investing looking for advice

Postby twee » Wed Mar 08, 2017 3:16 pm

Duckie wrote:
twee wrote:For the 403B, I can re-allocate (it's entirely customize-able).

Good.

Duckie wrote:You aren't double taxed using the backdoor method as long as you keep track of your basis. However, the TIRAs will get in the way. Have you checked with the DCP to see if it allows incoming rollovers?

I checked that the 403B account allows for incoming rollover. Did not ask about DCP. What's the difference between having it roll into DCP instead of 403B?

Duckie wrote:
What is AA? And why is it more difficult when mixing individual funds with balanced funds?

Asset allocation is the ratio of stocks to bonds. Figuring your current AA takes more math when mixing individual funds with balanced funds. For example, figuring out the AA in your DCP is just adding percentages up. That's until you hit GBMRX which is a balanced fund (a balanced fund inside a balanced fund). That means more figuring.

I'm not sure I follow, I'll look into this online

Duckie wrote:
If I contribute enough to my 403B (currently set to 10% - 13.8k) so that my income falls under 132k, I'd qualify to contribute a reduced amount to Roth IRA right?

The phase-out range for 2017 is $118K to $133K.

phase-out range means a reduced contribution amount right? Or is there something else involved with phase-out range?

Duckie wrote:Here's an example of a retirement portfolio including the taxable. You're age 29 so I'm giving you an AA of 80% stocks, 20% bonds, with 30% of stocks in international. That breaks down to 56% US stocks, 24% international stocks, and 20% bonds. Because of the overwhelming taxable account and the limited decent options in your employer plans you'll have to put bonds in taxable, something I'm not fond of. You could have something like:

Taxable at Vanguard -- $300K -- 93%
51% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)
24% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
18% (VWIUX) Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares (0.09%)

Old 403b -- $15K -- 4%
4% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.04%)

Current DCP -- $2K -- 1%
1% Medium Risk Portfolio (0.38%)

Traditional IRA at Vanguard -- $5.5K -- 2%
2% (VBMFX) Vanguard Total Bond Market Index Fund Investor Shares (0.16%)

Something to think about.


ok thanks! Will review this

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Duckie
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Re: new to investing looking for advice

Postby Duckie » Wed Mar 08, 2017 6:37 pm

twee wrote:I checked that the 403B account allows for incoming rollover. Did not ask about DCP. What's the difference between having it roll into DCP instead of 403B?

In your opening post you wrote that your 403b was from a previous employer. It's unusual that an old account from a former employer would allow an incoming rollover. Then later you wrote "If I contribute enough to my 403B (currently set to 10% - 13.8k) so that my income falls under 132k, I'd qualify to contribute a reduced amount to Roth IRA right?" Do you have a 403b option at your current job?

phase-out range means a reduced contribution amount right?

Yes.

twee
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Re: new to investing looking for advice

Postby twee » Fri Mar 10, 2017 11:27 am

Duckie wrote:
twee wrote:I checked that the 403B account allows for incoming rollover. Did not ask about DCP. What's the difference between having it roll into DCP instead of 403B?

In your opening post you wrote that your 403b was from a previous employer. It's unusual that an old account from a former employer would allow an incoming rollover. Then later you wrote "If I contribute enough to my 403B (currently set to 10% - 13.8k) so that my income falls under 132k, I'd qualify to contribute a reduced amount to Roth IRA right?" Do you have a 403b option at your current job?

I'll double check and specifically add that I am no longer an employee. My current employer also offers a 403B (I have opted for 10% at the moment, no employer match)

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Duckie
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Re: new to investing looking for advice

Postby Duckie » Fri Mar 10, 2017 6:36 pm

twee wrote:My current employer also offers a 403B (I have opted for 10% at the moment, no employer match)

What are the options in the current 403b?

twee
Posts: 10
Joined: Tue Feb 28, 2017 4:33 pm

Re: new to investing looking for advice

Postby twee » Mon Mar 20, 2017 12:15 pm

Duckie wrote:
twee wrote:My current employer also offers a 403B (I have opted for 10% at the moment, no employer match)

What are the options in the current 403b?

Sorry I was away from internet for the past week and couldn't reply.
Current employer offers two plans through transamerica
- Defined Contribution Retirement Plan
- Tax-Deferred Annuity Plan

I'll be contributing to the Tax-Deferred Annuity Plan (this is the 403B I think) and the employer will start contributing 10% of income to the DCP after 1 year.

This is an overview of the options available, would it be easier to put all of the ticker symbols instead?
https://drive.google.com/file/d/0B5KbFgcEtshLNzlNZzYtVnZtZExTdkhRUUFuSF9CdlNoVmdJ/view?usp=drivesdk

I checked and both the 403B accounts from previous and current employer accept incoming rollovers (all of the funds are pre-tax)

thanks!

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Duckie
Posts: 4745
Joined: Thu Mar 08, 2007 2:55 pm

Re: new to investing looking for advice

Postby Duckie » Mon Mar 20, 2017 2:33 pm

twee wrote:Current employer offers two plans through transamerica
- Defined Contribution Retirement Plan
- Tax-Deferred Annuity Plan

I'll be contributing to the Tax-Deferred Annuity Plan (this is the 403B I think) and the employer will start contributing 10% of income to the DCP after 1 year.

So you have $2K in the Medium Risk Portfolio of the DCP and are going to start contributing to the TDAP (poss 403b)?

This is an overview of the options available

The best options are:
  • Vanguard 500 Index 0.05% -- Large caps, 80% of US stocks
  • Vanguard Mid Cap Index 0.08% -- Mid caps, 6% of US stocks
  • Vanguard Small Cap Index 0.07% -- Small caps, 14% of US stocks
  • American Funds EuroPacific Growth 0.54% -- Good international fund, expensive
  • Metropolitan West Total Return Bond -- 0.44% -- US bonds
  • or one of the Vanguard Target Retirement funds

twee
Posts: 10
Joined: Tue Feb 28, 2017 4:33 pm

Re: new to investing looking for advice

Postby twee » Mon Mar 20, 2017 5:13 pm

Duckie wrote:
twee wrote:Current employer offers two plans through transamerica
- Defined Contribution Retirement Plan
- Tax-Deferred Annuity Plan

I'll be contributing to the Tax-Deferred Annuity Plan (this is the 403B I think) and the employer will start contributing 10% of income to the DCP after 1 year.

So you have $2K in the Medium Risk Portfolio of the DCP and are going to start contributing to the TDAP (poss 403b)?

Yea, I am currently slated to contribute 10% pre-tax to the new employer 403B

Duckie wrote:
This is an overview of the options available

The best options are:
  • Vanguard 500 Index 0.05% -- Large caps, 80% of US stocks
  • Vanguard Mid Cap Index 0.08% -- Mid caps, 6% of US stocks
  • Vanguard Small Cap Index 0.07% -- Small caps, 14% of US stocks
  • American Funds EuroPacific Growth 0.54% -- Good international fund, expensive
  • Metropolitan West Total Return Bond -- 0.44% -- US bonds
  • or one of the Vanguard Target Retirement funds

Thanks! How did you determine which ones are better options than others? I'm still working on gaining more knowledge through reading the suggested books

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Duckie
Posts: 4745
Joined: Thu Mar 08, 2007 2:55 pm

Re: new to investing looking for advice

Postby Duckie » Mon Mar 20, 2017 5:30 pm

twee wrote:
Duckie wrote:The best options are:
  • Vanguard 500 Index 0.05% -- Large caps, 80% of US stocks
  • Vanguard Mid Cap Index 0.08% -- Mid caps, 6% of US stocks
  • Vanguard Small Cap Index 0.07% -- Small caps, 14% of US stocks
  • American Funds EuroPacific Growth 0.54% -- Good international fund, expensive
  • Metropolitan West Total Return Bond -- 0.44% -- US bonds
  • or one of the Vanguard Target Retirement funds

Thanks! How did you determine which ones are better options than others? I'm still working on gaining more knowledge through reading the suggested books

The first thing I look at is the expense ratio. Costs matter. Plus I know all these funds having looked them up numerous times.


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