Struggling - Seeking Advice to Get On Track

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investjack019
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Struggling - Seeking Advice to Get On Track

Post by investjack019 » Tue Jun 19, 2018 9:30 pm

Efunds
Last edited by investjack019 on Fri Jun 22, 2018 4:55 pm, edited 4 times in total.

Grt2bOutdoors
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Re: Struggling - Seeking Advice to Get On Track

Post by Grt2bOutdoors » Tue Jun 19, 2018 9:53 pm

Welcome to the forum!
Don’t feel overwhelmed, it’s a learning process, ask your questions here, there are lots of forum members who like to help.

Please see the link by my signature on the format to ask questions. Do you know what your risk tolerance is? View the wiki, search for Investment Policy Statement and Asset Allocation.

How is your Edward Jones IRA currently allocated?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

marc1976
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Re: Struggling - Seeking Advice to Get On Track

Post by marc1976 » Tue Jun 19, 2018 10:20 pm

The first thing I would do is get rid of your Edward Jones IRA by rolling it over to a low cost company like Vanguard, Fidelity, or Schwab. It's very easy to do so and they will do most of the work for you. Just go to their website and search "rollover" and call their 1-800 number. I would go with Vanguard.

You did not say how your money was invested with Edward Jones, but I'm guessing the advisor probably put you in expensive mutual funds infested with commissions. They also charge a bunch of nickel and dime fees. Once you roll it over, pick low cost diversified ETFs to invest in. You may also be avoiding 1.5% in asset-based fees Edward Jones may be charging you. There was also no need to be rushed in December because you could have still had until mid-April 2018 to fund a 2017 IRA. You also did not specify which type of IRA you set up. A Roth IRA is better than a Traditional IRA.

Once your debt issues are manageable, you can start turbocharging your retirement saving. However, you're going to need to save much more than 6% of your salary even with the match. I'd bump that up to 20% if possible.

emlowe
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Re: Struggling - Seeking Advice to Get On Track

Post by emlowe » Tue Jun 19, 2018 11:02 pm

Moving an IRA to Vanguard/Fidelity/Schwab is generally very easy - those companies want your business and there won't be any tax implications even if the account cannot be moved over in-kind. You just contact one - I happen to like Fidelity - and just tell them you have an IRA you would like to move. Those guys pretty much take care of everything. You will find it pretty painless, I'm sure.

One reason for switching is that all those companies allow you to purchase (for free) the very low fee index funds/etfs for the 3-fund portfolio. For instance at Vanguard of course, one has the slew of Vanguard index funds and etfs. At Fidelity one can use the Fidelity index funds or in some cases iShares ETFs, etc. etc.

Moving a taxable account is more complicated - but the tax-deferred accounts really are pretty easy.

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Sandtrap
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Re: Struggling - Seeking Advice to Get On Track

Post by Sandtrap » Wed Jun 20, 2018 12:05 am

Welcome. You've come to a good place.

As "Grt2bOutdoors" suggested. You can get more comprehensive suggestions if you edit your original post (pencil icon) in the following format and including the information in the example:

Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212

Then: read.
GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started

mahalo
j

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 8:10 am

Thanks - I did update the first post as suggested.

pkay
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Re: Struggling - Seeking Advice to Get On Track

Post by pkay » Wed Jun 20, 2018 8:46 am

Like others suggested, if I were you, I'd move Roth IRA to Vanguard or Fidelity and pick 3 low cost index funds to invest in. % of each fund in a portfolio is based on your risk tolerance and years to retirement. We are in our late 30s (spouse is almost 40) and have chosen to have 20% in bond.

Why are you paying off your mortgage so aggressively? If the interest rate isn't too high (less than 10%?), I'd pull back a little from paying that off and divert a little more money to retirement funding.

pkcrafter
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Re: Struggling - Seeking Advice to Get On Track

Post by pkcrafter » Wed Jun 20, 2018 8:48 am

marc1976 wrote:
Tue Jun 19, 2018 10:20 pm
The first thing I would do is get rid of your Edward Jones IRA by rolling it over to a low cost company like Vanguard, Fidelity, or Schwab. It's very easy to do so and they will do most of the work for you. Just go to their website and search "rollover" and call their 1-800 number. I would go with Vanguard.

You did not say how your money was invested with Edward Jones, but I'm guessing the advisor probably put you in expensive mutual funds infested with commissions. They also charge a bunch of nickel and dime fees. Once you roll it over, pick low cost diversified ETFs to invest in. You may also be avoiding 1.5% in asset-based fees Edward Jones may be charging you. There was also no need to be rushed in December because you could have still had until mid-April 2018 to fund a 2017 IRA. You also did not specify which type of IRA you set up. A Roth IRA is better than a Traditional IRA.

Once your debt issues are manageable, you can start turbocharging your retirement saving. However, you're going to need to save much more than 6% of your salary even with the match. I'd bump that up to 20% if possible.
Welcome marc,

You are correct about moving Roth IRAs, but technically there is a difference between a rollover and a custodian to custodian transfer and the custodian transfer is the best method because it's direct and initiated by the new custodian.

https://finance.zacks.com/difference-be ... -4179.html

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

mortfree
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Re: Struggling - Seeking Advice to Get On Track

Post by mortfree » Wed Jun 20, 2018 8:53 am

stop contributing to Edward jones accounts immediately.

consider not paying off your mortgage so aggressively.

you said you feel behind on retirement so do you really have 3 years to lose for retirement contributions?

increase/max your 401k's (max is 18,500 per year per person and is just your contributions; not the employer match..

Dave Ramsey got you to this point, now it is time to graduate and take a different approach with your retirement savings and mortgage.

Dottie57
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Re: Struggling - Seeking Advice to Get On Track

Post by Dottie57 » Wed Jun 20, 2018 8:55 am

pkay wrote:
Wed Jun 20, 2018 8:46 am
Like others suggested, if I were you, I'd move Roth IRA to Vanguard or Fidelity and pick 3 low cost index funds to invest in. % of each fund in a portfolio is based on your risk tolerance and years to retirement. We are in our late 30s (spouse is almost 40) and have chosen to have 20% in bond.

Why are you paying off your mortgage so aggressively? If the interest rate isn't too high (less than 10%?), I'd pull back a little from paying that off and divert a little more money to retirement funding.
+1

Moderation with home repayment may be a very good idea. Starting late, you need to amp up your savings and investments. Put more into your 401k. This is important space to let compounding grow.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 8:58 am

pkay wrote:
Wed Jun 20, 2018 8:46 am
Why are you paying off your mortgage so aggressively? If the interest rate isn't too high (less than 10%?), I'd pull back a little from paying that off and divert a little more money to retirement funding.
I do not want any debt and I want my home paid for by the time I am 50- in addition if our employment/pay does not change that will give us almost $3k per month to invest

cusetownusa
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Re: Struggling - Seeking Advice to Get On Track

Post by cusetownusa » Wed Jun 20, 2018 8:59 am

If you aren't already maxing out your tax deferred accounts (doesn't look like you are) you should divert your extra mortgage payments to do so.

Why pay 32% in extra taxes to pay down your low rate mortgage?

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goingup
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Re: Struggling - Seeking Advice to Get On Track

Post by goingup » Wed Jun 20, 2018 9:08 am

investjack019-
Folks here don't like EJ because we are DIY'ers and think they are expensive. However, if you find value in their services and the advisor will compel you to save more and stay on track you may want to stay put for the time being.

The big issue is you should try to save more in your 401K. Up your percentage. The automatic payroll deduction is an easy way to save. You can't spend what you don't have!

Paying off your mortgage in 3 years is definitely not the priority. Saving for retirement at this point should be first consideration.

soccerrules
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Re: Struggling - Seeking Advice to Get On Track

Post by soccerrules » Wed Jun 20, 2018 9:10 am

Welcome to the forum. You've come to the right place.
I would do nothing and spend the next 30 days reading as much information off of the wiki and several of the recommended financial /investing books listed there. I would read one all-in financial guide to help you understand the basics. Read the forum posts as well. I have learned more here in the last year than over the course of the last 20+ years.
This might hurt a little -- you are behind the 8 ball. You have at least 15 years to turn things around -- good news.

A few general comments
1) Get control over your spending. You need to spend less and SAVE more.
2) Triple paying your mortgage is not a bad idea and I am not sure your mortgage interest rate. I might encourage taking the extra payments you have been paying on mortgage and put into 401K, IRA etc. 3 years is not a long time, but I think having that money in the market for 3 more years would be better than waiting 3 years and then hyper-investing.
3) No more debt. If that means using cash and envelopes to stay on a budget -- you gotta do it. It appears you have an extra $1500/mo to throw at your mortgage so maybe you have that under control now.

Once you have read and have a better understanding then come back and ask more questions. Moving your IRA's to Vanguard, Fidelity or Schwab and investing in low cost index funds will be the right move, but you need to know why it is a good idea and the reading will get you there.
Don't let your outflow exceed your income or your upkeep will be your downfall.

pkay
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Re: Struggling - Seeking Advice to Get On Track

Post by pkay » Wed Jun 20, 2018 9:37 am

investjack019 wrote:
Wed Jun 20, 2018 8:58 am
pkay wrote:
Wed Jun 20, 2018 8:46 am
Why are you paying off your mortgage so aggressively? If the interest rate isn't too high (less than 10%?), I'd pull back a little from paying that off and divert a little more money to retirement funding.
I do not want any debt and I want my home paid for by the time I am 50- in addition if our employment/pay does not change that will give us almost $3k per month to invest
I understand the idea behind not wanting any debt. We have $85k in student loan at 2% interest. Before joining this forum, we were paying it off aggressively (following Dave Ramsey method, starting with our bad debts then to student loan). However, we realized that 2% interest on the loan isn't bad and the same money going to pay off that 2% plus a little bit of principle would be better spent investing in our retirement, which has been earning 10% in the last 3 years. Our jobs are stable so we know we will pay off the student loan eventually. Meanwhile, since we are late starters in funding our retirement accounts, we want our retirement to grow even more - the beauty of compounding growth.

But the caveat is that we chose to not aggressively pay off the student loan because it is only at 2% interest.

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onthecusp
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Re: Struggling - Seeking Advice to Get On Track

Post by onthecusp » Wed Jun 20, 2018 9:41 am

Welcome!
Congratulations on getting out of all your bad debt and starting to get a handle on the next phase of accumulation and investing.
You are not too late, just not very early, in creating a good retirement without working the rest of your life.

Mortgage payoff advice here is likely to be 50/50 for/against payoff. I don't think we know enough about your income and expenses to debate the finer points. An aggressive attitude towards debt got you this far so my advice is keep it up while you learn about investing. At some point I think you may be comfortable with easing off the gas and directing the max to 401k. But maybe you will find you can do both.

Start contributing a little more to the 401k tomorrow. Go see your HR department and submit the paperwork. When it is gone from your paycheck your taxes go down too, so you don't miss as much as you are saving. Up your contribution every few months (as HR allows) until you feel you can't. Then up it annually if you get a raise until you hit the max. Then start saving more in the relocated IRAs. If that is maxed out then taxable investments are next.

Asset allocation is a very personal thing and worthy of a separate question thread if you need more guidance than the bogleheads wiki provides. Your 75/25 is fine for now. You have a while till retirement so my choice would be stock heavy like that. One thing to think about is that paying down your mortgage is similar to buying fixed income (bonds, CDs, money market) with a pretty good rate, off-setting a stock heavy allocation for new purchases in the retirement accounts.

Agree you should move the accounts from EJ to Vanguard (personally I use Fidelity, but my 401k is there). But it does not have to be tomorrow. Read more here and in the wiki then start the conversation with Vanguard. With your authorization they can arrange the transfer out of EJ with no fuss other than fielding the question from your current advisor. "Not sorry, decided to go in a different direction." Is all the answer you need give to be polite.

It's a process and you are on your way!

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 9:54 am

Everything I have done has been backwards and that is why I am where I am. I accept that.

My employment is stable but the company I work for... has a history of pushing folks out during reorganization efforts and I have always dodged the bullet but I do think one day I will not out run it. That said, that is why I want my home paid off since I can see the light at the end of the tunnel. If we fell onto hard times such as a job loss I will never be able to replace the income I am making now elsewhere and having my home paid for will make life easier if that were to ever happen.

I think I could invest more in the company 401K but this too I struggle with as to what is best. Traditional or divert to Roth. I am at 6% now but I could up it maybe to like 9-10%.

Also, the funds that are available and the ones I have invested in are mostly index funds. There are a few managed funds but the 10yr Rate of Return on those are barely 3% - where the index funds are like 8-10%

senex
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Re: Struggling - Seeking Advice to Get On Track

Post by senex » Wed Jun 20, 2018 10:03 am

It's never too late to start.

Don't let the "keep your mortgage" people cause you anxiety or second-guessing. Numerically, they don't know your mortgage rate or enough deduction details to measure your tax benefit (which is likely zero). Psychologically, they have different personality characteristics and quite possibly do not have the emotional scars from lengthy debt struggles. If you have a plan to be debt-free in 3 years, go for it! There are bogleheads threads about whether you regret paying off your mortgage, and it's rare to see someone say yes.

You're already on the right path. Once debt free, if you save aggressively and manage expenses, you'll be further down the right path. It's amazing what happens with 10 or 20 years of compounding.

Don't worry about projections and returns. As Warren Buffett says, sometimes the tide goes in, sometimes it goes out -- it's not in your control. But if you keep swimming steadily towards your goal, you'll be making progress, even though there are times that the tide carries you backwards.

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Re: Struggling - Seeking Advice to Get On Track

Post by mortfree » Wed Jun 20, 2018 10:12 am

How much is your emergency fund?

Since you are a Ramsey follower, I wonder what step you're at with the above.

don't get discouraged with the feedback thus far; and hang in there with this thread...

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 10:17 am

mortfree wrote:
Wed Jun 20, 2018 10:12 am
How much is your emergency fund?

Since you are a Ramsey follower, I wonder what step you're at with the above.

don't get discouraged with the feedback thus far; and hang in there with this thread...
I am at about 35k - working on BS4 & BS6 - My kids are grown so no BS5 for us.

mortfree
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Re: Struggling - Seeking Advice to Get On Track

Post by mortfree » Wed Jun 20, 2018 10:21 am

investjack019 wrote:
Wed Jun 20, 2018 10:17 am
mortfree wrote:
Wed Jun 20, 2018 10:12 am
How much is your emergency fund?

Since you are a Ramsey follower, I wonder what step you're at with the above.

don't get discouraged with the feedback thus far; and hang in there with this thread...
I am at about 35k - working on BS4 & BS6 - My kids are grown so no BS5 for us.
excellent..

how many mortgage payments does 35k represent?

also just want to note there is risk with accelerating mortgage payments. if you don't have it paid off and lose your job, the mortgage company still expects next month's payment - and doesn't care that you triple paid for x number of years...


I did payoff a mortgage before (age 39) so I have that experience. moved and have a mortgage again.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 10:32 am

I have made my situation sound a bit more dire than it really is.... if I lost my job tomorrow I could still make my mortgage payment just not in an accelerated fashion even with a job that pays me half of what I make today.

It really sounds like to me that as far as investing goes - I have several options

1. stay with EJ but work to adjust the accounts to where I am understanding and comfortable with the mix.

2. stop all EJ funding and just direct into my 401K - which I can do but that is something my wife cannot do due to the type of retirement account she has.

3. move EJ to Vanguard or Fidelity and DIY it.

4. I am sure there are other options ....

At the end of the day - good bad or indifferent I am going to stay the course and pay the home off early. The plan is 35 months or sooner. I have a couple of paid off toys sitting around that I could sell and cut that down by almost a year.

I have no intentions of moving in the next 5 or 10 years.

soccerrules
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Re: Struggling - Seeking Advice to Get On Track

Post by soccerrules » Wed Jun 20, 2018 10:42 am

investjack019 wrote:
Wed Jun 20, 2018 10:17 am
mortfree wrote:
Wed Jun 20, 2018 10:12 am
How much is your emergency fund?

Since you are a Ramsey follower, I wonder what step you're at with the above.

don't get discouraged with the feedback thus far; and hang in there with this thread...
I am at about 35k - working on BS4 & BS6 - My kids are grown so no BS5 for us.
What is your monthly expense total ?
If you lost your job tomorrow how long would the $35k last ?
Liquidity is important. If you do not have any (or little) money in taxable accounts to tap if needed for a longer than expected unemployment-- you don't want to tap 401k, cash in IRA, use credit cards etc.
This is where having a larger EF would make sense (because one might not have other easily accessible cash) before pre-paying mortgage. If you dump all your extra money into the house to payoff the mortgage and then get in a financial bind -- you can't sell a room in the house to generate cash.
I am a fan of paying off the mortgage early IF (big IF) it is part of an overall strategy along with strong EF, maxing tax-deferred accounts and taxable assets.
FWIW I paid extra on my mortgage for 2-3 years and am glad I did. But each to their own and wisdom suggest making this decision with full understanding of pros/cons.
Based on the information provided by the OP I would suggest throttling back the 3x payments on mortgage. Go 2x and take the extra $750 and build up EF and/or open brokerage account for taxable investing.
Don't let your outflow exceed your income or your upkeep will be your downfall.

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KlingKlang
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Re: Struggling - Seeking Advice to Get On Track

Post by KlingKlang » Wed Jun 20, 2018 10:55 am

investjack019 wrote:
Tue Jun 19, 2018 9:30 pm
So we opened but he opened as Traditional and then come tax season this year our CPA said we could not have traditional given we have traditional with our companies , so in Feb or March he switched them to Roth accounts.
Huh? The deduction for a traditional IRA may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels, but you are still allowed to have one.

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onthecusp
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Re: Struggling - Seeking Advice to Get On Track

Post by onthecusp » Wed Jun 20, 2018 11:06 am

investjack019 wrote:
Wed Jun 20, 2018 10:32 am
I have made my situation sound a bit more dire than it really is.... if I lost my job tomorrow I could still make my mortgage payment just not in an accelerated fashion even with a job that pays me half of what I make today.

It really sounds like to me that as far as investing goes - I have several options

1. stay with EJ but work to adjust the accounts to where I am understanding and comfortable with the mix.

2. stop all EJ funding and just direct into my 401K - which I can do but that is something my wife cannot do due to the type of retirement account she has.

3. move EJ to Vanguard or Fidelity and DIY it.

4. I am sure there are other options ....

At the end of the day - good bad or indifferent I am going to stay the course and pay the home off early. The plan is 35 months or sooner. I have a couple of paid off toys sitting around that I could sell and cut that down by almost a year.

I have no intentions of moving in the next 5 or 10 years.
So, focused on investing, there is no problem with keeping IRAs and contributing to them vs 401k. There may be some finer points but I see them as pretty much equivalent. Increasing to 401k is easier (payroll deduction) and the maximum contribution is higher.

Past increasing savings, which may involve cutting spending, then yes #3 above is advisable.

EJ and most "service" brokerages are good at collecting fees. It may not look like much. What's 1% on a balance of 2600? $26 a year. But they are also getting high fees within those funds. A quick look googling those fund tickers showed expense ratios of 0.3 - 0.71%. The index funds in a bogleheads DIY simple 3 fund strategy would average about 0.15%. So EJ's choices are costing ohh about .4% more on top of the management fee.

When compared to a Vanguard 1.4% ($36) more of your BALANCE goes every year to EJ or their favorite funds (which kick back a little to EJ) . If your blended investments make 6% they get almost a dollar out of every 4. If it is a good year you are happy and they are getting paid. If it is a bad year you lose money and they are getting paid.

$36 might seem like an ok deal for the handholding, particularly if the funds outperform the index funds. But the chances of outperformance are slim while the chance of underperformance is high, particularly when they have to outperform just to pay the higher fees. Now start slamming money into the IRA and get your balance to 26000. Fees are $360. In 15 years of saving like crazy and a decent market you might be at 260,000 with annual fees of $3600. Your work is increasing their income. They still get the 25% cut on your returns.

I don't necessarily blame the advisor, everyone needs to make a living, I just don't need that service. They can work for someone else.

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mhadden1
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Re: Struggling - Seeking Advice to Get On Track

Post by mhadden1 » Wed Jun 20, 2018 11:55 am

investjack019 wrote:
Wed Jun 20, 2018 10:32 am
I have made my situation sound a bit more dire than it really is.... if I lost my job tomorrow I could still make my mortgage payment just not in an accelerated fashion even with a job that pays me half of what I make today.
I agree that your month-to-month situation is not dire; in fact it is likely very comfortable. But, at age 47, you have what I consider to be something of a retirement saving emergency, and I would strongly consider major changes in direction to help improve your current situation. Hopefully, you have 15-20 years to work on this.

My advice would be to quickly ramp up retirement savings as much as you possibly can. For most people it is best to max out 401k contributions, then IRA accounts, then taxable accounts. Correctly evaluate your tax situation to help decide between traditional or Roth options that you might have. I suspect that for you, traditional is better. ( BTW, the 25% federal bracket changed to 22% for 2018.) After age 50 there are catch-up provisions that can probably help you save more to 401k/IRA accounts.

Regarding investments - minimizing the associated expenses keeps money in your pocket. Learn how to evaluate the fees that you pay. There are many ways to invest with low expenses, including choices at companies like Vanguard, Fidelity, and Schwab. Edward Jones is a company associated with high expenses and so most posters will recommend moving away from them.

Wiith your low amount of retirement savings I would strongly favor retirement over mortgage pre-payment. Regular payments will pay off the mortgage before you retire.

Good luck!
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 12:15 pm

mhadden1 wrote:
Wed Jun 20, 2018 11:55 am
You have what I consider to be something of a retirement saving emergency, and I would strongly consider major changes in direction to help improve your current situation. Hopefully, you have 15-20 years to work on this.
I totally concur mhadden1 - thus my anxiety about steering the ship on track. Tomorrow I can stop the extra mortgage payment and start funneling more money into my employer 401k.

In regards to my employer 401K - I am not sure if I am invested correctly. The rate of return YTD is about 3.5% but if I do a report back to like 2015 my rate of return is like 25%. Looking at each of the funds the ones that are actively managed and not index related have the lowest rate of return... the indexed ones are running like 9-10% for 10yr.

Edwards Jones - I control when I put money into the two accounts so I can easily just stop or given the little money that is there move over to Vanguard, Fidelity, and Schwab if they will allow a rollover with that little money in place. I have no skin in the game per say with the Edward Jones guy.. nice an all but never really felt that great about the rushed feeling I got to open the two accounts.

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mhadden1
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Re: Struggling - Seeking Advice to Get On Track

Post by mhadden1 » Wed Jun 20, 2018 1:29 pm

investjack019 wrote:
Wed Jun 20, 2018 12:15 pm
In regards to my employer 401K - I am not sure if I am invested correctly.
I did not see your 401k choices - if you haven't posted them yet, and you do so, you should get ready responses about good picks. Hopefully you have at least a few low-cost, highly diversified index fund choices, like "S&P 500", "Total Stock Market", "Total Bond Market", "Total International". Depending on what is available, these choices could comprise the bulk of your retirement saving. Ideally you can evaluate all the choices for you, and your wife, to put together the portfolio that meets your needs. Make sure to look carefully at the retirement savings options available to your wife - there may be good ones that are poorly publicized for some reason.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 1:42 pm

Sorry, should have posted my Employer 401K fund options.

Target Retirement Date Funds
BFA LifePath Retirement Fund
BFA LifePath Fund 2020
BFA LifePath Fund 2025
BFA LifePath Fund 2030
BFA LifePath Fund 2035
BFA LifePath Fund 2040
BFA LifePath Fund 2045
BFA LifePath Fund 2050
BFA LifePath Fund 2055

Index Funds
BlackRock S&P 500 Index Fund
BlackRock Russell 2000 Index Fund
BlackRock S&P 400 Mid Cap Index Fund
BlackRock Russell 3000 Index Fund
BlackRock MSCI EAFE Index Fund
BlackRock MSCI Emerging Market Index Fund
BTC Bloomberg Barclays US Aggregate Bond Index
BlackRock Bloomberg Barclays US TIPS Index Fund
BlackRock Bloomberg Roll Select Commodity Index Fund

Actively Managed Funds
BlackRock Cash Fund: Treasury
BNY Mellon Stable Value Fund
High Yield Bond Fund
Brandywine Global Bond Fund
Emerging Market Bond Fund
Small Cap US Equity Fund
Large Cap Non-US Equity Fund
T. Rowe Price International Discovery Fund
Emerging Market Equity Fund
AEW Capital Management REIT Fund


My current mix is:

27% BlackRock S&P 500 Index Fund
13% BlackRock Russell 2000 Index Fund
18% BlackRock S&P 400 Mid Cap Index Fund
14% BlackRock MSCI EAFE Index Fund
03% BlackRock Bloomberg Roll Select Commodity Index Fund

25% BNY Mellon Stable Value Fund

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 1:47 pm

Your Rate of Return 2018(Jan 1, 2018 to Jun 19, 2018) 3.18%
Cumulative (as of Jun 19, 2018) May 1.85% Q1 -0.45%
Average Annual (as of May 31, 2018) 1Y 10.74% 3Y 7.03% 5Y 7.49%

Current contributions is 6% - Before-Tax but there is a Roth Option... not sure if I should also be exploring that too?

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mhadden1
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Re: Struggling - Seeking Advice to Get On Track

Post by mhadden1 » Wed Jun 20, 2018 2:03 pm

If you post the expense ratios for your funds, posters can use that information to weigh in about choices. The expense ratios are normally shown on the 401k web page that shows the available funds.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Wed Jun 20, 2018 2:11 pm

I hope this is correct and shows the expense ratios as I am not familiar with those.
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mhadden1
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Re: Struggling - Seeking Advice to Get On Track

Post by mhadden1 » Wed Jun 20, 2018 2:41 pm

You will have to look a bit more to find the expense ratios for the funds - what you supplied are the returns for the funds, that is, how much they went up or down. I know the expense ratios are shown on your 401k web page somewhere.

The expense ratio is the amount that you are charged each year for owning a fund, to cover its costs. Index funds don't have a lot of costs to pay so they should have very low expense ratios, compared to actively managed funds that have to pay for hot-shot stock pickers, a lot of advertising, etc.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Thu Jun 21, 2018 7:42 am

mhadden1 - found the expense ratios and posted them below. The ones with the bolded asterisk are the funds I am currently vested into.

Target Retirement Date Funds
BFA LifePath Retirement Fund - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2020 - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2025 - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2030 - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2035 - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2040 - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2045 - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2050 - Total Expense Ratio (0.13% Gross/0.13% Net)
BFA LifePath Fund 2055 - Total Expense Ratio (0.13% Gross/0.13% Net)
Index Funds
*BlackRock S&P 500 Index Fund - Total Expense Ratio (0.07% Gross/0.07% Net)
*BlackRock Russell 2000 Index Fund - Total Expense Ratio (0.07% Gross/0.07% Net)
*BlackRock S&P 400 Mid Cap Index Fund - Total Expense Ratio (0.07% Gross/0.07% Net)
BlackRock Russell 3000 Index Fund - Total Expense Ratio (0.07% Gross/0.07% Net)
*BlackRock MSCI EAFE Index Fund - Total Expense Ratio (0.10% Gross/0.10% Net)
BlackRock MSCI Emerging Market Index Fund - Total Expense Ratio (0.13% Gross/0.13% Net)
BTC Bloomberg Barclays US Aggregate Bond Index- Total Expense Ratio (0.08% Gross/0.08% Net)
BlackRock Bloomberg Barclays US TIPS Index Fund- Total Expense Ratio (0.08% Gross/0.08% Net)
*BlackRock Bloomberg Roll Select Commodity Index Fund - Total Expense Ratio (0.17% Gross/0.17% Net)
Actively Managed Funds
BlackRock Cash Fund: Treasury- Total Expense Ratio (0.15% Gross/0.12% Net)
*BNY Mellon Stable Value Fund - Total Expense Ratio (0.409% Gross/0.409% Net)
High Yield Bond Fund- Total Expense Ratio (0.56% Gross/0.56% Net)
Brandywine Global Bond Fund- Total Expense Ratio (0.58% Gross/0.58% Net)
Emerging Market Bond Fund- Total Expense Ratio (0.53% Gross/0.53% Net)
Small Cap US Equity Fund- Total Expense Ratio (0.79% Gross/0.79% Net)
Large Cap Non-US Equity Fund- Total Expense Ratio (0.47% Gross/0.47% Net)
T. Rowe Price International Discovery Fund- Total Expense Ratio (0.96% Gross/0.96% Net)
*Emerging Market Equity Fund - Total Expense Ratio (0.74% Gross/0.74% Net)
*AEW Capital Management REIT Fund- Total Expense Ratio (0.56% Gross/0.56% Net)

Flyer24
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Re: Struggling - Seeking Advice to Get On Track

Post by Flyer24 » Thu Jun 21, 2018 8:35 am

I would probably just put all in the LifePath fund. Those have a great expense ratio and there is no need to rebalance. Quit looking at the returns. It is about share accumulation and dollar cost averaging while keeping expenses low. Don’t put anything extra towards mortgage but max your 401K and IRA.

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Re: Struggling - Seeking Advice to Get On Track

Post by BL » Thu Jun 21, 2018 10:25 am

You have good ERs in your 401k. Agree that picking a Target fund with desired % bonds is a good idea. It will probably be a near date rather than your actual retirement date.

The 500 fund, international fund, and stable value are a reasonable alternative. Keep it simple!

Suggest you move Roth to Vanguard and buy a target date fund of desired bond %. (Other places are fine if you avoid their advice.) Target funds and Star have 1k minimums. Set and forget. Be sure to sign up for on-line paperwork to avoid low-balance fee. No other charges unlike your EJ 4-6% load (purchase fee).

Encourage more trad. 401k + Roth IRAs for each of you. What is your mortgage rate?

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Re: Struggling - Seeking Advice to Get On Track

Post by mhadden1 » Thu Jun 21, 2018 10:28 am

Flyer24 wrote:
Thu Jun 21, 2018 8:35 am
I would probably just put all in the LifePath fund. Those have a great expense ratio and there is no need to rebalance. Quit looking at the returns. It is about share accumulation and dollar cost averaging while keeping expenses low. Don’t put anything extra towards mortgage but max your 401K and IRA.
I think using the LifePath target date fund is likely a great idea, and the other advice is excellent.

The OP will have to pick a target date - I think I might choose 2040 - OP may prefer to go earlier for less aggressive or later for more aggressive.

In my own case, for many years my 401k did not offer a low cost target date fund or a Total Stock Market fund. Like the OP, I had to roll my own version of TSM by using S&P 500, mid and small-cap funds.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Thu Jun 21, 2018 10:33 am

Thanks for the advice... few questions.

What is "ERs"

Based upon the feedback on the employer 401K what would be the suggested mix?

I am currently at:
27% BlackRock S&P 500 Index Fund
13% BlackRock Russell 2000 Index Fund
18% BlackRock S&P 400 Mid Cap Index Fund
14% BlackRock MSCI EAFE Index Fund
03% BlackRock Bloomberg Roll Select Commodity Index Fund

25% BNY Mellon Stable Value Fund

Are you suggesting 100% into a Target Fund 2035/2040 or some sort of mix ?

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Re: Struggling - Seeking Advice to Get On Track

Post by BL » Thu Jun 21, 2018 10:43 am

investjack019 wrote:
Thu Jun 21, 2018 10:33 am
Thanks for the advice... few questions.

What is "ERs"
Expense Ratio (fund cost per year)
Based upon the feedback on the employer 401K what would be the suggested mix?

I am currently at:
27% BlackRock S&P 500 Index Fund
13% BlackRock Russell 2000 Index Fund
18% BlackRock S&P 400 Mid Cap Index Fund
14% BlackRock MSCI EAFE Index Fund
03% BlackRock Bloomberg Roll Select Commodity Index Fund

25% BNY Mellon Stable Value Fund

Are you suggesting 100% into a Target Fund 2035/2040 or some sort of mix ?
Close to your 25%- maybe 20-30% bonds.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Thu Jun 21, 2018 10:48 am

BL - as you can tell I am pretty dense when it comes to this stuff - to say the least.

I am not following this -- Close to your 25%- maybe 20-30% bonds.

Are you saying - 25% Target fund and then then rest in bonds ?

Flyer24
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Re: Struggling - Seeking Advice to Get On Track

Post by Flyer24 » Thu Jun 21, 2018 10:50 am

Just put 100% into the target fund. You don’t need to mix it with another fund because it is already diversified.

investjack019
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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Thu Jun 21, 2018 10:56 am

So if I go to 100% into one of the target funds -

1. What is the benefit of doing this vs. keeping it the way it currently is invested?

2. Since I do not know how to fully digest the stuff I posted like an expert what sort of return should I expect on these Target funds - am I right to think 7-10% ?

3. If I were to move to the 100% to target what sort of move would this be? My employer 401k tool has Create New Investment Mix - Current Balance, Create a New Investment Mix - Future Contributions and Move Money between Funds - I think the 1st option.

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Re: Struggling - Seeking Advice to Get On Track

Post by Darth Xanadu » Thu Jun 21, 2018 10:59 am

investjack019 wrote:
Wed Jun 20, 2018 1:47 pm
Current contributions is 6% - Before-Tax but there is a Roth Option... not sure if I should also be exploring that too?
I think all of your 401k contributions should go to Traditional (pre-tax) 401k, not Roth 401k. I think the tax savings for you will be helpful given your circumstances. You will have Roth IRA balances down the road to help with tax management during withdrawal stages.

Any steps you take now will help. So kudos to you for taking this initiative. Don't feel you have to do everything all at once. Your retirement savings is a battleship, not a sailboat. It will take time to get up to speed and change direction, but you must take steps now to affect those changes. Once a battleship is moving in right direction at full speed, the momentum is extremely powerful and inertia becomes your friend.
My friends said stick to your guns, but instead I just got stuck.

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Re: Struggling - Seeking Advice to Get On Track

Post by Flyer24 » Thu Jun 21, 2018 11:00 am

investjack019 wrote:
Thu Jun 21, 2018 10:48 am
BL - as you can tell I am pretty dense when it comes to this stuff - to say the least.

I am not following this -- Close to your 25%- maybe 20-30% bonds.

Are you saying - 25% Target fund and then then rest in bonds ?
He is saying pick a LifeFund that contains close to 25% bonds. The LifeFund 2030 contains 30% bonds in its portfolio.

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Re: Struggling - Seeking Advice to Get On Track

Post by Flyer24 » Thu Jun 21, 2018 11:05 am

investjack019 wrote:
Thu Jun 21, 2018 10:56 am
So if I go to 100% into one of the target funds -

1. What is the benefit of doing this vs. keeping it the way it currently is invested?

2. Since I do not know how to fully digest the stuff I posted like an expert what sort of return should I expect on these Target funds - am I right to think 7-10% ?

3. If I were to move to the 100% to target what sort of move would this be? My employer 401k tool has Create New Investment Mix - Current Balance, Create a New Investment Mix - Future Contributions and Move Money between Funds - I think the 1st option.
If you are not a hands on investor, the LifeFund just keeps it simple because it automatically rebalances. First, you transfer all your current funds to the LifeFund. Then set all future contributions 100% to the LifeFund.

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Re: Struggling - Seeking Advice to Get On Track

Post by Darth Xanadu » Thu Jun 21, 2018 11:08 am

investjack019 wrote:
Thu Jun 21, 2018 10:56 am
So if I go to 100% into one of the target funds -

1. What is the benefit of doing this vs. keeping it the way it currently is invested?

2. Since I do not know how to fully digest the stuff I posted like an expert what sort of return should I expect on these Target funds - am I right to think 7-10% ?

3. If I were to move to the 100% to target what sort of move would this be? My employer 401k tool has Create New Investment Mix - Current Balance, Create a New Investment Mix - Future Contributions and Move Money between Funds - I think the 1st option.
1. Mostly simplicity. The target date funds reduce exposure to equities over time, which is generally a good idea as you approach a time when you need to start withdrawing the funds to pay the bills in retirement. It's a set it and forget it approach, and an easy one to implement once you figure out your risk tolerance.

2. Returns will be driven mostly by market conditions. The differences between the various target date fund returns will be driven by the varying exposure to equities as mention in #1. So, a target date fund with 80% equity exposure might see a +25% in a good year but -40% in a bad year, whereas the target date fund with 40% equity exposure might see +12% in a good year but -20% in a bad year.

3. If you decide to go with the target date fund approach, choose to move current amounts AND future contributions to the fund of choice. Again, simplicity is the end result here.
My friends said stick to your guns, but instead I just got stuck.

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Re: Struggling - Seeking Advice to Get On Track

Post by mhadden1 » Thu Jun 21, 2018 11:23 am

Darth Xanadu wrote:
Thu Jun 21, 2018 10:59 am
investjack019 wrote:
Wed Jun 20, 2018 1:47 pm
Current contributions is 6% - Before-Tax but there is a Roth Option... not sure if I should also be exploring that too?
I think all of your 401k contributions should go to Traditional (pre-tax) 401k, not Roth 401k. I think the tax savings for you will be helpful given your circumstances.
I agree that traditional is likely the best choice for 401k contributions.

If the OP can also contribute to an individual Roth IRA, so much the better. That is what I did - my goal was to max out both.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Thu Jun 21, 2018 11:33 am

The information is slowly making its way into my thick skull.

My one sticking point... probably because of my involvement with the Dave Ramsey FPU and hearing him go on and on about mutual funds and 10-12% rate of return and when I look at the target funds they are no where near that and also him saying bonds don't perform as well as the stock market. Could just be FPU brainwashing..... but it just sits in the back of my head when I look at these target funds... like I am some expert- Ha!

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Re: Struggling - Seeking Advice to Get On Track

Post by investjack019 » Thu Jun 21, 2018 11:49 am

The 2035 fund 80% Equity and 20% Bonds & Cash
The 2040 fund 89.2% Equity and 10.8% Bonds and Cash

both of these are listed on a scale of 5 (Best) and 1 (Worst) as a 2

The LifePath Retirement is a 4 - 40% Equity and 60% Cash & Bonds - ER is 0.13% but the Rate or Return is not all that great.

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Re: Struggling - Seeking Advice to Get On Track

Post by Flyer24 » Thu Jun 21, 2018 12:01 pm

investjack019 wrote:
Thu Jun 21, 2018 11:33 am
The information is slowly making its way into my thick skull.

My one sticking point... probably because of my involvement with the Dave Ramsey FPU and hearing him go on and on about mutual funds and 10-12% rate of return and when I look at the target funds they are no where near that and also him saying bonds don't perform as well as the stock market. Could just be FPU brainwashing..... but it just sits in the back of my head when I look at these target funds... like I am some expert- Ha!
Dave is great for managing debt but he is not considered an expert on here for investing. It is not all about performing well and chasing returns. It is about managing risks. You could be 100 percent in the stock market which is super aggressive. You might get big returns some years. Other years you may lose half your portfolio when the market tanks. Bond are a way absorbing those big market swings and volatility. As you get close to retirement, you don’t want as much volatility. The Lifefunds gradually increase your bond exposure over time so you do get less volatility as you get into the retirement phase.

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