My employer (state of Virginia) has removed Fidelity from its line-up of providers for one of the plans I have access to. The new providers are TIAA and DCP (record kept by ICMA-RC). I must choose one of the two providers for new contributions. I can leave my balance at Fidelity (currently 34% of investments) or move the balance to one of the new providers.
The state contributes 10.4% of my salary into this account, and it doesn't accept employee contributions. I'm planning to retire/semi-retire in 4 years, and estimating roughly $40K-$45K of new contributions in the account before retirement.
I have two other workplace retirement accounts at Fidelity which can continue to receive new contributions and stay put. These are with the same employer but are not affected by the upcoming change.
I think that my best option is TIAA--moving the balance and contributing new funds to BlackRock U.S. Debt Index Fund M. I could easily be missing something important and so I'm posting my details in the hopes of a review.
My thinking so far:
- I believe that TIAA is well-established with a good reputation.
- The fees are roughly the same ($35.50 higher annual fee with TIAA but .01% lower ER which is about a wash for the current balance).
- I'm having trouble wrapping my head around TIAA Traditional RC even after reading discussions here and on the TIAA website. If I understand correctly, I could take a lump sum within 120 days of retirement (with 2.5% penalty) or monthly pay out of the balance over 7 years. I'm planning to retire as early as 2023 and DH before me. Adding more taxable income to the pension we expect to start in 2027, plus any part time income, and we may start to push up against ACA eligibility if it still exists then. So, I'm thinking that a bond fund is better to keep our income options flexible.
Emergency funds: 3 months of expenses
Debt: Mortgage $10K @ 5.25%; Car $14K @ 1.24%; Car $17K @ 2.74%
Tax Filing Status: Married filing jointly
Tax Rate: 12% Federal; 6% State
State of Residence: VA
Ages: 51 (her), 57 (him), no children
Desired Asset allocation: 60% stocks / 40% bonds
Desired international allocation: 30% of stocks
Total retirement portfolio: $830K
Pension: $15K-$17K (him) starting 2027
Gross salary: $98K (her), $50K (him)
Retirement assets
Her 403b at Fidelity (51% of portfolio)
34% FID Total Market Index (FSKAX) (.015%)
16% FID International Index (FSPSX) (.035%)
1% FID US Bond Index (FXNAX) (.025%)
Her 401a at Fidelity (35% of portfolio)**** This is the account in question
35% FID US Bond Index (FXNAX) (.025%)
Employer contributes 10.4% of salary.
Her 401a Match at Fidelity (2% of portfolio)
2% FID Total Market Index (FSKAX) (.015%)
Employer match of contributions to her 403b up to $500/year.
Her Roth IRA at Fidelity (1% of portfolio)
1% FID Total Market Index (FSKAX) (.015%)
His 403b at Lincoln Financial (8% of portfolio)
6% VG 500 Index (VFIAX) (.04%)
2% VG Total Bond Market Index (VBTLX) (.05%)
His HSA at Lively/TD Ameritrade (1% of portfolio)
1% SPDR Portfolio Total Market (SPTM) (.03%)
His Roth IRA at Fidelity (2% of portfolio)
2% FID Total Market Index (FSKAX)(.015%)
2019 Contributions
- His HSA--$8K
- His Roth--$7K
- Her Roth--$7K
- His 403b--on track for $25K
- Her 403b--on track for $16K
Investment Options for Her 401a
TIAA
Ticker symbols not provided. Additional info is at https://www.tiaa.org/public/tcm/vrs/vie ... nvestments. Annual Record-Keeping Fee: $66. This fee can be offset by revenue credits applied back to the account.
BlackRock Short-Term Investment Fund W (.08%)
BlackRock Equity Index Fund J (.01%)
BlackRock U.S. Treasury Inflation-Protected Securities Fund M (.03%)
BlackRock MSCI ACWI ex-U.S. IMI Index (.11%)
BlackRock MSCI ACWI IMI Index Non-Lendable Fund M (.05%)
BlackRock Russell 2500 Index Fund M (.04%)
TIAA Real Estate Account (.83%)
BlackRock U.S. Debt Index Fund M (.03%)
TIAA Traditional Annuity--Retirement Choice (.49%)
BlackRock LifePath Index Retirement Fund O (.08%)
add'l target date funds at same ER as above
Self-Directed Brokerage Window
DCP (ICMA-RC)
Ticker symbols not provided. Additional info is at https://www.varetirement.org/orphedcp/i ... files.html. Annual Record-Keeping Fee: $30.50.
Stock Fund (.02%)--The Stock Fund invests in units of BlackRock's Equity Index Fund F.
International Stock Fund (.07%)--The International Stock Fund invests in units of BlackRock's MSCI ACWI ex-U.S. IMI Index Fund F.
Small/Mid-Cap Stock Fund (.03%)
Global Real Estate Fund (.09%)
Bond Fund (.04%)--The Bond Fund invests in units of BlackRock's U.S. Debt Index Fund M. The U.S. Debt Index Fund M invests in the master Fund F.
Money Market Fund (.08%)
Stable Value Fund (.26%)
Inflation-Protected Bond Fund (.03%)
High-Yield Bond Fund (.40%)
Retirement Portfolio (.08%)
Target Date 2025 Portfolio (.08%)--additional target dates listed with same ER
Virginia Retirement System Investment Portfolio (VRSIP) (.58%)
Self-Directed Brokerage Window--with TD Ameritrade; must leave $2500 in core accounts; haven't found yet if there are additional annual record-keeping fees
Fidelity--funds are here now
Annual Record-Keeping Fee: $60. This fee can be offset by revenue credits applied back to the account to cover an administrative/record-keeping fee. I've added FEE CREDIT next to the ones that are eligible, but the revenue credit is not guaranteed. Current holdings marked with **
Fidelity Extended Market Index (FSMAX) (.045%)
Fidelity Diversified International K (FDIKX) (.69%) FEE CREDIT.20%
Fidelity Dividend Growth K (FDGKX) (.40%) FEE CREDIT.20%
Fidelity Low-Priced Stock K (FLPKX) (.53%) FEE CREDIT.20%
Fidelity Real Estate Investment (FRESX) (.76%) FEE CREDIT .35%
Fidelity Worldwide (FWWFX) (.94%) FEE CREDIT .35%
Fidelity Freedom Income K (.42%) FEE CREDIT .20%
Fidelity Freedom 2025 K (.56%)--add'l target date funds listed with ER's from .42% to .65%) FEE CREDIT .20%
Fidelity High Income (SPHIX)(.70%) FEE CREDIT.20%
Fidelity Inflation-Protected Bond Index (FIPDX)(.05%)
**Fidelity US Bond Index (FXNAX) (.025%)
Stable Value Fund (.26%)
Fidelity Government Money Market (SPAXX)(.42%) FEE CREDIT .20%
Self-Directed Brokerage Window
Investment Options for Other Workplace Accounts
Here are the lower cost index funds available for our other workplace accounts. Current holdings marked with **
Her 403b and Her 401a Match at Fidelity
**FID Total Market Index (FSKAX) (.015%)
FID 500 Index (FXAIX) (.015%)
FID Large Cap Growth Index (FSPGX) (.035%)
FID Large Cap Value Index (FLCOX) (.035%)
FID Extended Market Index (FSMAX) (.045%)
FID Mid Cap Index (FSMDX) (.025%)
FID Small Cap Index (FSSNX) (.025%)
FID Emerging Markets Index (FPADX) (.075%)
FID Global Ex-US Index (FSGGX) (.055%)
**FID International Index (FSPSX) (.035%)
FID Total International Index (FTIHX) (.06%)
FID Real Estate Index (FSRNX) (.07%)
**FID US Bond (FSNAX) (.025%)
FID Inflation-Protected Bond Index (FIPDX) (.05%)
FID Intermediate Treasury Bond Index (FUAMX) (.03%)
FID Long-Term Treasury Bond Index (FNBGX) (.03%)
FID Short-Term Bond Index (FNSOX) (.03%)
FID Short-Term Treasury Bond Index (FUMBX) (.03%)
His 403b at Lincoln Financial
**VG 500 Index (VFIAX) (.04%)
VG Inflation Protected Secs (VAIPX) (.10%)
VG Mid Cap Index(VIMAX) (.05%)
**VG Total Bond Market Index (VBTLX) (.05%)
Lincoln Stable Value Account
Thank you for looking at my details and providing any thoughts!