Revised & Shortened Post - Workplace Retirement Plan quesitons

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Topic Author
Mtangler25
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Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 9:42 am

Greetings,

I am seeking advice regarding my wife's workplace retirement plan. Which is a 403b.


The Hospital's Retirement Plan (eligible after 1 year of employment, automatically enrolled when requirements are met)

- 100% employer funded at 6% of annual salary

-Must work 1000 hours per calendar year and be employed last calendar day of the year to receive one (1) year of

service and 6 percent of funding to the account.

-Fully vested after 6 years

-Money purchase retirement plan


The company doesn't offer a match in the following optional 403b, however, the 6% annual salary acts as their "match" essentially it's free money so we are thankful for that.


403b - American Funds

-You have access to our plan financial advisor through Edward Jones at no cost to you.


The funds included are:

EQUITY FUNDS;

- American Funds Growth Fund of America R-4 Shares (RGAEX) ER 0.68%

- Columbia Mid Cap Index A (NTIAX) ER 0.45%

-Eaton Vance Small-Cap A (ETEGX) ER 1.35%

- Goldman Sachs Emerging Markets Eq A (GEMAX) ER 1.66%

-Hartford MidCap R4 (HFMSX) ER 1.17%

-Janus Henderson Small Cap Value S (JISCX) ER 1.27%

-MFS Aggressive Growth Allocation R3 (MAAHX) ER 1.1%

-MFS Intl Diverisfication R3 (MDIHX) ER 1.16%

-Oppenheimer MId Cap Value A (QVSCX) ER 1.2%

-Invesco Diversified Dividend A (LCEAX) ER 0.82%

- I-Shares S& P 500 Index A Shares (BSPAX) ER 0.36%


-T Rowe Price Dividend Growth Fund - ER 0.91%

-Templeton Foreign A (TEMFX) ER 1.19%

I like the I-Shares Index the most, with the Trowe price the second best.



BALANCED FUNDS

-MFS Conservative Allocation R3 (MACNX) ER 0.93%

-MFS Moderate Allocation R3 (MAMHX) ER 0.98%


BOND FUNDS

-JHancock Bond R2 (JHRBX) ER 0.93%

-PIMCO Diversifies Inc A (PDVAX) ER 1.16%

-Prudential Global Total Return A (GTRAX) ER 0.88%


Target Date Fund(s)

American Funds 2060 Target Date Fund R-4 (RDKTX) ER 0.79%


I am lukewarm with the options for the 403b, but with most employer-sponsored plans they seem to fall short in one form or another.


My takeaways and possible scenarios: (These are not in order of preference)

#1) Go with a 2060 target date fund but I also have some apprehension with only investing in a target date fund.

#2) My other consideration is to invest in the I-Shares 500 Index, however there is no way to build a true 3-fund portfolio with the options that are available in the 403b.

#3) Go all in with the 403b and select the 3 best funds, one US equity, one international, and one bond fund/balanced fund.

#4) Simply not participate in the 403b at all and choose a Roth or Traditional IRA at Schwab or Vanguard.


Thank you SO much for your help, I know this is a long post but I truly appreciate the time!

MarkVH0518
Posts: 66
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by MarkVH0518 » Fri Oct 04, 2019 10:19 am

These are expensive funds and Edwards Jones is not trustworthy, so my initial reaction is with those concerns in mind.
On the other hand 6% is free money and fees would have to be astronomical before I'd recommend turning down 6% free money.

My recommendation is to invest the 6% free money in the iShares S&P 500; this investment would amount to the US fund in a 3-fund portfolio.
Then use other accounts to fund the other portions of the 3-fund portfolio: International and Bond funds.

Probably the only idea missing from your list of options is that you do not need to balance your asset allocation of the 3-fund portfolio in
identically in all your accounts. In fact, for minimizing cost and tax impact, usually you don't keep the same asset allocation in all accounts.
You'll want to look up tax efficient allocation to more information in this regard.
Instead, you only need to maintain your desired asset allocation across all your accounts

As to investing additional monies in this 403b is less clear. It depends on:
- are you eligible for traditional IRA contributions? if so fund tIRA before 403b using institutions with lower fees.
- what is your tax bracket? If low, it might make more sense to fund Roth IRA at institutions with lower fees.

I'd need more information your available income for investing and your tax situation before making more
concrete recommendations on investing in this 403b.

Mark

Rheuminator
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 10:29 am

Mtangler25 wrote:
Fri Oct 04, 2019 9:42 am

The company doesn't offer a match in the following optional 403b, however, the 6% annual salary acts as their "match" essentially it's free money so we are thankful for that.
Does this mean that there is a match from the first option? From your description, it sounded like there was no match for either option and that the employer just put in the 6% of her salary regardless of any elective contribution she made. If that’s the case, then I would go with the second option and put all of the employer contribution into the 500 index fund, as this has the lowest ER and can serve as part of the backbone for a three fund portfolio.

The next step would be how much more she is wanting to save for retirement. I would place the next $6000 she intends to save in an IRA (Roth or Traditional would be an entirely different discussion based on your tax situation, both present and future). If she doesn’t already have an IRA, Vanguard’s works quite nicely and you can complete your three fund portfolio there, where you have excellent options such as VTSAX, VTIAX, and VBILX/VBTLX.

Any extra savings beyond $6000 you could just put in the 403B with more of the 500 index fund.

Topic Author
Mtangler25
Posts: 167
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Location: Montana

Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 10:33 am

MarkVH0518 wrote:
Fri Oct 04, 2019 10:19 am
These are expensive funds and Edwards Jones is not trustworthy, so my initial reaction is with those concerns in mind.
On the other hand 6% is free money and fees would have to be astronomical before I'd recommend turning down 6% free money.

My recommendation is to invest the 6% free money in the iShares S&P 500; this investment would amount to the US fund in a 3-fund portfolio.
Then use other accounts to fund the other portions of the 3-fund portfolio: International and Bond funds.

As to investing additional monies in this 403b is less clear. It depends on:
- are you eligible for traditional IRA contributions? if so fund tIRA before 403b using institutions with lower fees.
- what is your tax bracket? If low, it might make more sense to fund Roth IRA at institutions with lower fees.

I'd need more information your available income for investing and your tax situation before making more
concrete recommendations on investing in this 403b.

Mark
Mark,

Thank you for your assistance.

The Hospital's EMPLOYER funded plan is a great deal, every employee is automatically enrolled after 1 year of employment so we get it whether we want to or not. (obviously we want it)

I agree that the Ishares S&P 500 Index is the only worthy fund to pick, and I like the idea of choosing it and then having her open up a different account, most likely a Roth to complete her 3-fund portfolio.

Tax Info

State: Montana

State Tax Bracket: 6.9%

Federal Tax Bracket: 22%

So, here is a follow up question(s). Is it even necessary to participate in the 403b? The only benefit I see is that she/we can reduce our taxable income, but since there isn't a direct employer match is it even worth paying the higher expense ratio and probably some hidden fees? Would it make sense to just forgo the 403b all together and open a Roth? Or just open a 403b and a roth, and contribute 6% to the 403b with the I-Shares 500 Index then add the rest of the portfolio to a Roth?

Rheuminator
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 10:41 am

Mtangler25 wrote:
Fri Oct 04, 2019 10:33 am

So, here is a follow up question(s). Is it even necessary to participate in the 403b? The only benefit I see is that she/we can reduce our taxable income, but since there isn't a direct employer match is it even worth paying the higher expense ratio and probably some hidden fees? Would it make sense to just forgo the 403b all together and open a Roth?
Yes, anytime the employer gives you free money, you should participate. Paying fees on free money is better than no fees on no money. Even paying slightly higher fees in a tax-advantaged account like a 403B can be better than paying lower fees in a taxable account.
Mtangler25 wrote:
Fri Oct 04, 2019 10:33 am

Or just open a 403b and a roth, and contribute 6% to the 403b with the I-Shares 500 Index then add the rest of the portfolio to a Roth?
I thought that the employer contributed this 6% and there was no contribution by your wife required for a match? In any case, taking the free 6% and going with an IRA after that is the best move here.

Topic Author
Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 10:43 am

Rheuminator wrote:
Fri Oct 04, 2019 10:29 am
Mtangler25 wrote:
Fri Oct 04, 2019 9:42 am

The company doesn't offer a match in the following optional 403b, however, the 6% annual salary acts as their "match" essentially it's free money so we are thankful for that.
Does this mean that there is a match from the first option? From your description, it sounded like there was no match for either option and that the employer just put in the 6% of her salary regardless of any elective contribution she made. If that’s the case, then I would go with the second option and put all of the employer contribution into the 500 index fund, as this has the lowest ER and can serve as part of the backbone for a three fund portfolio.

The next step would be how much more she is wanting to save for retirement. I would place the next $6000 she intends to save in an IRA (Roth or Traditional would be an entirely different discussion based on your tax situation, both present and future). If she doesn’t already have an IRA, Vanguard’s works quite nicely and you can complete your three fund portfolio there, where you have excellent options such as VTSAX, VTIAX, and VBILX/VBTLX.

Any extra savings beyond $6000 you could just put in the 403B with more of the 500 index fund.

Let me elaborate, I apologize if the description was confusing.

The first "option" isn't a choice. Each employee just gets enrolled in this plan after a year of employment. it is 100% employer funded at 6% of annual salary. I don't think employees contribute to it at all.

There is no match with the 403b. But the 6% employer funded plan can be looked at as a "match" Either way its a free benefit from her employer.

We want to save 15% of our income for retirement, we currently have some student debt to pay off before we are contributing the full 15%. My wife at this time does NOT have an IRA or any form of investment accounts.

Topic Author
Mtangler25
Posts: 167
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Location: Montana

Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 10:49 am

Rheuminator wrote:
Fri Oct 04, 2019 10:41 am
Mtangler25 wrote:
Fri Oct 04, 2019 10:33 am

So, here is a follow up question(s). Is it even necessary to participate in the 403b? The only benefit I see is that she/we can reduce our taxable income, but since there isn't a direct employer match is it even worth paying the higher expense ratio and probably some hidden fees? Would it make sense to just forgo the 403b all together and open a Roth?
Yes, anytime the employer gives you free money, you should participate. Paying fees on free money is better than no fees on no money. Even paying slightly higher fees in a tax-advantaged account like a 403B can be better than paying lower fees in a taxable account.
Mtangler25 wrote:
Fri Oct 04, 2019 10:33 am

Or just open a 403b and a roth, and contribute 6% to the 403b with the I-Shares 500 Index then add the rest of the portfolio to a Roth?
I thought that the employer contributed this 6% and there was no contribution by your wife required for a match? In any case, taking the free 6% and going with an IRA after that is the best move here.

The employer does contribute the 6% but not to the 403b, it's an entirely separate plan. So you are saying she should go with the 403b and contribute up to 6% of her income into the s&p 500 index, and also open a Roth to complete her portfolio and contribute the remaining 9% (whatever that amounts out to)

Rheuminator
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 10:51 am

Mtangler25 wrote:
Fri Oct 04, 2019 10:43 am

The first "option" isn't a choice. Each employee just gets enrolled in this plan after a year of employment. it is 100% employer funded at 6% of annual salary. I don't think employees contribute to it at all.

There is no match with the 403b. But the 6% employer funded plan can be looked at as a "match" Either way its a free benefit from her employer.

We want to save 15% of our income for retirement, we currently have some student debt to pay off before we are contributing the full 15%. My wife at this time does NOT have an IRA or any form of investment accounts.
I see. I think the point of confusion is that you are referring to the optional contribution as “the 403b” — when chances are that this automatic “separate” plan is also a 403b since it sounds like she is at a non-profit hospital.

In any case, I think my other answers address the rest of it. I wouldn’t put any elective contributions into the 403b unless she has maxed out her IRA contribution first.

Topic Author
Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 10:56 am

Rheuminator wrote:
Fri Oct 04, 2019 10:51 am
Mtangler25 wrote:
Fri Oct 04, 2019 10:43 am

The first "option" isn't a choice. Each employee just gets enrolled in this plan after a year of employment. it is 100% employer funded at 6% of annual salary. I don't think employees contribute to it at all.

There is no match with the 403b. But the 6% employer funded plan can be looked at as a "match" Either way its a free benefit from her employer.

We want to save 15% of our income for retirement, we currently have some student debt to pay off before we are contributing the full 15%. My wife at this time does NOT have an IRA or any form of investment accounts.
I see. I think the point of confusion is that you are referring to the optional contribution is “the 403b” — when chances are that this automatic plan is also a 403b.

In any case, I think my other answers address the rest of it. I wouldn’t put any elective contributions into the 403b unless she has maxed out her IRA contribution first.

Yes there definitely was some confusion, my apologies! Yes, the hospital is a non-profit

I have no idea what the employer funded plan is, if it is a 403b or something else. But either way, I like the idea of going with the Roth as her core retirement account. I would assume she could enroll in the 403b, pick her fund, and then hold off on contributing until she maxes out her Roth? That might be a question for HR. But holy cow will they be looking at her funny :happy

Rheuminator
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 11:09 am

No problem at all — the smallest details can make for important distinctions, so I just wanted to make sure we were on the same page.

I would be surprised if the automatic plan is something other than a 403b, and I would also be surprised if your elective 403b contributions in the future didn’t just go into the same account. You’ll want to check with HR on the details of this and the nature of this account, because if it is indeed a 403b (which it likely is), then you could not place any tax-deductible contributions into a Traditional IRA — when you have a tax-deductible employer sponsored plan, you cannot also deduct Traditional IRA contributions. So if you qualify for direct Roth IRA contributions based on your joint income (which it sounds like you do based on your marginal tax bracket), that would be a no-brainer, as you could make direct after-tax contributions there rather than after-tax contributions to a Traditional IRA and then converting to Roth through the back door.

fposte
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by fposte » Fri Oct 04, 2019 11:19 am

Rheuminator wrote:
Fri Oct 04, 2019 11:09 am
I would be surprised if the automatic plan is something other than a 403b,
It sounds to me like it might be a 401a plan; those aren't uncommon in the nonprofit realm, and the OP describes it as a "money purchase retirement plan."

Topic Author
Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 11:21 am

Rheuminator wrote:
Fri Oct 04, 2019 11:09 am
No problem at all — the smallest details can make for important distinctions, so I just wanted to make sure we were on the same page.

I would be surprised if the automatic plan is something other than a 403b, and I would also be surprised if your elective 403b contributions in the future didn’t just go into the same account. You’ll want to check with HR on the details of this and the nature of this account, because if it is indeed a 403b (which it likely is), then you could not place any tax-deductible contributions into a Traditional IRA — when you have a tax-deductible employer sponsored plan, you cannot also deduct Traditional IRA contributions. So if you qualify for direct Roth IRA contributions based on your joint income (which it sounds like you do based on your marginal tax bracket), that would be a no-brainer, as you could make direct after-tax contributions there rather than after-tax contributions to a Traditional IRA and then converting to Roth through the back door.
I am very thankful that you brought the question of the type of account, we will definitely reach out to HR for this clarification. And if the Employer funded plan is indeed a 403b, then should we still forgo the other 403b and just go with the Roth?

MarkVH0518
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by MarkVH0518 » Fri Oct 04, 2019 11:23 am

Mtangler25 wrote:
Fri Oct 04, 2019 10:33 am

Federal Tax Bracket: 22%

So, here is a follow up question(s). Is it even necessary to participate in the 403b? The only benefit I see is that she/we can reduce our taxable income, but since there isn't a direct employer match is it even worth paying the higher expense ratio and probably some hidden fees? Would it make sense to just forgo the 403b all together and open a Roth? Or just open a 403b and a roth, and contribute 6% to the 403b with the I-Shares 500 Index then add the rest of the portfolio to a Roth?
Assuming you are eligible for IRA contributions, (please confirm this - I suspect you are eligible because you are in the 22% federal tax bracket)
then I certainly recommend managing your own investments as opposed to further investing in your wife's expensive 403b.

I'll suggest this as to the order of investment:
1) Use the 6% employer contribution in 403b invested in iShares S&P 500
2) Invest in Roth IRA up to $6000 using funds to achieve your desired 3fund portfolio asset allocation
3) Are you, as opposed to your wife, eligible for tax advantaged savings? In other words, do you have W2 earnings?
If you are eligible then save in traditional or Roth IRA in your name.
4) Save more in your wife's 403b to reach your desired asset allocation - even if the fees are a bit high.

Execute these steps until you reach your 15% (or whatever your current number) savings rate.

These steps will be sufficient to start, although you may improve them over time (I mean like in the next 5 years)
You may want to study further whether you should save in tax deferred accounts (IRA and 403b) or tax free accounts (Roth IRA).
This decision is based upon speculation of your current tax rate and your future tax rate - but don't sweat this at the present time.
Personally, I won't suggest taxable accounts until you are fully maximizing your tax advantaged accounts.
However, taxable accounts might make sense if you are saving to purchase a home.
Again, this last paragraph is for down the road a few years, get started as I've laid out.
You'll do fine to start and you will get wiser and more experienced over time.

Good luck
Mark

Topic Author
Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 11:30 am

MarkVH0518 wrote:
Fri Oct 04, 2019 11:23 am
Mtangler25 wrote:
Fri Oct 04, 2019 10:33 am

Federal Tax Bracket: 22%

So, here is a follow up question(s). Is it even necessary to participate in the 403b? The only benefit I see is that she/we can reduce our taxable income, but since there isn't a direct employer match is it even worth paying the higher expense ratio and probably some hidden fees? Would it make sense to just forgo the 403b all together and open a Roth? Or just open a 403b and a roth, and contribute 6% to the 403b with the I-Shares 500 Index then add the rest of the portfolio to a Roth?
Assuming you are eligible for IRA contributions, (please confirm this - I suspect you are eligible because you are in the 22% federal tax bracket)
then I certainly recommend managing your own investments as opposed to further investing in your wife's expensive 403b.

I'll suggest this as to the order of investment:
1) Use the 6% employer contribution in 403b invested in iShares S&P 500
2) Invest in Roth IRA up to $6000 using funds to achieve your desired 3fund portfolio asset allocation
3) Are you, as opposed to your wife, eligible for tax advantaged savings? In other words, do you have W2 earnings?
If you are eligible then save in traditional or Roth IRA in your name.
4) Save more in your wife's 403b to reach your desired asset allocation - even if the fees are a bit high.

Execute these steps until you reach your 15% (or whatever your current number) savings rate.

These steps will be sufficient to start, although you may improve them over time (I mean like in the next 5 years)
You may want to study further whether you should save in tax deferred accounts (IRA and 403b) or tax free accounts (Roth IRA).
This decision is based upon speculation of your current tax rate and your future tax rate - but don't sweat this at the present time.
Personally, I won't suggest taxable accounts until you are fully maximizing your tax advantaged accounts.
However, taxable accounts might make sense if you are saving to purchase a home.
Again, this last paragraph is for down the road a few years, get started as I've laid out.
You'll do fine to start and you will get wiser and more experienced over time.

Good luck
Mark

I will respond in the order of our suggesstions

1) the 6% employer contribution is seperate from her 403b the 403b is optional
2)I agree that she should invest in a Roth ( I already have a Roth on my own and a SIMPLE IRA through my employer)
3) AS mentioned before i have my own Roth and make contributions.
4) So you think she should enroll in the 403b as well as a Roth? Even though there is no direct match from her employer?

And thank you for the added info for future considerations!

retiredjg
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Fri Oct 04, 2019 11:31 am

mtangler25, the answers to all your questions depends on things we don't know. Mostly, what do the other family investments look like and how much can you two save each year? We also need to know if she could deduct a contribution to tIRA (might be unlikely) and if the two of you are eligible to contribute directly to Roth IRA.

There are only 3 good ideas that I see right now.
  • -Don't use the 403b at all....because by the time you fill your work plan and 2 IRAs, there is no more money to save for retirement

    -Use the 403b a lot but only invest in the 500 index (which is the only good choice), holding both bonds and international stocks in other family accounts (they do not have to be her accounts)

    -Use the 403b a little bit for the 500 index and build the rest of the portfolio in the other accounts.
So tell us about your other accounts and how much you can save for retirement each year.

Ferdinand2014
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Ferdinand2014 » Fri Oct 04, 2019 11:36 am

Mtangler25 wrote:
Fri Oct 04, 2019 9:42 am
Greetings,

I am seeking advice regarding my wife's workplace retirement plan. Which is a 403b.


The Hospital's Retirement Plan (eligible after 1 year of employment, automatically enrolled when requirements are met)

- 100% employer funded at 6% of annual salary

-Must work 1000 hours per calendar year and be employed last calendar day of the year to receive one (1) year of

service and 6 percent of funding to the account.

-Fully vested after 6 years

-Money purchase retirement plan


The company doesn't offer a match in the following optional 403b, however, the 6% annual salary acts as their "match" essentially it's free money so we are thankful for that.


403b - American Funds

-You have access to our plan financial advisor through Edward Jones at no cost to you.


The funds included are:

EQUITY FUNDS;

- American Funds Growth Fund of America R-4 Shares (RGAEX) ER 0.68%

- Columbia Mid Cap Index A (NTIAX) ER 0.45%

-Eaton Vance Small-Cap A (ETEGX) ER 1.35%

- Goldman Sachs Emerging Markets Eq A (GEMAX) ER 1.66%

-Hartford MidCap R4 (HFMSX) ER 1.17%

-Janus Henderson Small Cap Value S (JISCX) ER 1.27%

-MFS Aggressive Growth Allocation R3 (MAAHX) ER 1.1%

-MFS Intl Diverisfication R3 (MDIHX) ER 1.16%

-Oppenheimer MId Cap Value A (QVSCX) ER 1.2%

-Invesco Diversified Dividend A (LCEAX) ER 0.82%

- I-Shares S& P 500 Index A Shares (BSPAX) ER 0.36%


-T Rowe Price Dividend Growth Fund - ER 0.91%

-Templeton Foreign A (TEMFX) ER 1.19%

I like the I-Shares Index the most, with the Trowe price the second best.



BALANCED FUNDS

-MFS Conservative Allocation R3 (MACNX) ER 0.93%

-MFS Moderate Allocation R3 (MAMHX) ER 0.98%


BOND FUNDS

-JHancock Bond R2 (JHRBX) ER 0.93%

-PIMCO Diversifies Inc A (PDVAX) ER 1.16%

-Prudential Global Total Return A (GTRAX) ER 0.88%


Target Date Fund(s)

American Funds 2060 Target Date Fund R-4 (RDKTX) ER 0.79%


I am lukewarm with the options for the 403b, but with most employer-sponsored plans they seem to fall short in one form or another.


My takeaways and possible scenarios: (These are not in order of preference)

#1) Go with a 2060 target date fund but I also have some apprehension with only investing in a target date fund.

#2) My other consideration is to invest in the I-Shares 500 Index, however there is no way to build a true 3-fund portfolio with the options that are available in the 403b.

#3) Go all in with the 403b and select the 3 best funds, one US equity, one international, and one bond fund/balanced fund.

#4) Simply not participate in the 403b at all and choose a Roth or Traditional IRA at Schwab or Vanguard.


Thank you SO much for your help, I know this is a long post but I truly appreciate the time!
Number 2. 100% 500 index up to match. IRA traditional at Fidelity/Schwab/Vanguard for the rest. Fidelity FXNAX 0.025 total bond. FZILX 0.00 total international.

My wife has 403b at her employment. Only good option was 500 index fund. We contribute full 19,000. I am self employed and max my SEP 56,000 100% FXAIX (Fidelity 500 index). In taxable I use treasury bills on auto roll as my fixed income and emergency fund. I don't keep bonds per se. Instead I basically horde cash in the form of T-bills. However, FXNAX for total bond and FZILX for international are good additions if you are looking for 3 fund. Other international options in Fidelity are FSPSX 0.035 (developed international - no emerging market), FSGGX 0.055 (developed and emerging market), FTIHX 0.06 (developed ,emerging , small cap developed)
Last edited by Ferdinand2014 on Fri Oct 04, 2019 11:45 am, edited 1 time in total.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

Rheuminator
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 11:37 am

Mtangler25 wrote:
Fri Oct 04, 2019 11:21 am

I am very thankful that you brought the question of the type of account, we will definitely reach out to HR for this clarification. And if the Employer funded plan is indeed a 403b, then should we still forgo the other 403b and just go with the Roth?
Yes, I would forego your own elective contributions to the 403b until you’ve maxed out the IRAs first.

I agree with the 4-step process outlined by Mark, which is the same steps I advocated for already — though I didn’t mention your own IRA options, as he did. His point #3 actually needs to be clarified though — because your wife has ordinary income, you yourself need not have any income to contribute to your own IRA. You can always contribute to IRAs for both spouses so long as only one has ordinary income.

Rheuminator
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 11:42 am

On a different note, you’ll want to pay especially close attention to any advice @retiredjg gives you — he/she gives among the best, most thorough, and authoritative advice I’ve yet seen on the Bogleheads forum.

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Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 11:43 am

retiredjg wrote:
Fri Oct 04, 2019 11:31 am
mtangler25, the answers to all your questions depends on things we don't know. Mostly, what do the other family investments look like and how much can you two save each year? We also need to know if she could deduct a contribution to tIRA (might be unlikely) and if the two of you are eligible to contribute directly to Roth IRA.

There are only 3 good ideas that I see right now.
  • -Don't use the 403b at all....because by the time you fill your work plan and 2 IRAs, there is no more money to save for retirement

    -Use the 403b a lot but only invest in the 500 index (which is the only good choice), holding both bonds and international stocks in other family accounts (they do not have to be her accounts)

    -Use the 403b a little bit for the 500 index and build the rest of the portfolio in the other accounts.
So tell us about your other accounts and how much you can save for retirement each year.

Thank you, I will list all of the accounts. We are recently married so everything is still "seperate"

His Accounts:

Schwab Roth IRA

Schwab Total Stock Index (SWTSX)

Schwab Total Inl Index (SWISX)

Simple IRA 3% Employer match

SPDR Total Stock Index (SPTM)

Trowe Price Enhanced Bond Index (PBDIX)

Trowe Price Blue Chip Fund (TRBCX)

HSA
Cash - $1,470.00
Vanguard Target 2060 fund (VTTSX) $1,075.00


Her Accounts:

None, she is a recent graduate with her second degree and just started her job on 9/20/19.

Debt:

His: None
Hers: $50,000 (Now ours)

Combined Income: $100K (pre tax)

No Children/dependents

Filing taxes jointly

Our goal is to contribute 15% of our annual income to our retirement accounts. I say it is our GOAL because we are about to start paying off debt at a rapid pace so our investment contributions are going to be significantly reduced.

We are looking at our strategy for paying off debt, that strategy hasn’t yet been decided on as we have a little time before payments are due and we literally just go married in early September. So, I cannot give an exact number of how much we will be putting towards our investments in the next 2-3 years.
Last edited by Mtangler25 on Fri Oct 04, 2019 12:26 pm, edited 3 times in total.

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Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 11:44 am

Rheuminator wrote:
Fri Oct 04, 2019 11:42 am
On a different note, you’ll want to pay especially close attention to any advice @retiredjg gives you — he/she gives among the best, most thorough, and authoritative advice I’ve yet seen on the Bogleheads forum.
Wow, quite an endorsement. I am honored!

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Fri Oct 04, 2019 12:26 pm

Mtangler25 wrote:
Fri Oct 04, 2019 11:44 am
Rheuminator wrote:
Fri Oct 04, 2019 11:42 am
On a different note, you’ll want to pay especially close attention to any advice @retiredjg gives you — he/she gives among the best, most thorough, and authoritative advice I’ve yet seen on the Bogleheads forum.
Wow, quite an endorsement. I am honored!
Don't get too excited. It just means I've been around a long time. :twisted:

(But thanks for the kind words Rheuminator... :happy )

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Fri Oct 04, 2019 12:39 pm

Mtangler25 wrote:
Fri Oct 04, 2019 11:43 am
...we literally just go married in early September.
This makes a big difference in what I think you should do this year. It takes more than a marriage ceremony to get each comfortable with sharing accounts with a spouse. It won't hurt to give things a year to settle down.

His Accounts:

Schwab Roth IRA

Schwab Total Stock Index (SWTSX)

Schwab Total Inl Index (SWISX)

Simple IRA 3% Employer match

SPDR Total Stock Index (SPTM)

Trowe Price Enhanced Bond Index (PBDIX)

Trowe Price Blue Chip Fund (TRBCX)

HSA
Cash - $1,470.00
Vanguard Target 2060 fund (VTTSX) $1,075.00
His accounts are already reasonably diversified (although we don't know what the ratios are). Have you (alone) got a stock to bond ratio in mind? Have you (together) come up with a stock to bond ratio for your future together? It may be too soon for that last question.


Combined Income: $100K (pre tax)
This is getting near the limit for your wife to deduct a contribution to tIRA, but I think she probably can if you want more tax-deferred savings vs more Roth IRA savings.

So, I cannot give an exact number of how much we will be putting towards our investments in the next 2-3 years.
Let's start with a guess.

How much have you been putting in His SIMPLE IRA? Do you think that will go down? How much have you been putting in Roth IRA? Do you think that will go down?


How much do you think she might be able to save for retirement (over and above the money that is already going to the mandatory thing whatever it is)?

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 12:42 pm

Mtangler25 wrote:
Fri Oct 04, 2019 11:43 am

Combined Income: $100K (pre tax)

Filing taxes jointly
I believe you said earlier your marginal tax rate is 22%. So long as you are indeed filing jointly and taking the standard deduction of $24,000, your marginal tax bracket is instead 12%, in which case Roth is a no-brainer.

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 12:50 pm

This is getting near the limit for your wife to deduct a contribution to tIRA, but I think she probably can if you want more tax-deferred savings vs more Roth IRA savings.
@Retiredjg, isn’t this a moot point since she has a 403b (I’m assuming that’s the automatic plan her employer contributes to)? Or is that only if she makes elective contributions to it herself? Though I’m sure it’s more common than I’m aware, I haven’t before seen such an arrangement where an employer contributes their portion without requiring an employee contribution, so I’m not totally sure if this type of plan negates tIRA deduction as would a 403b/401k where the employee has to contribute to get a match.

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Fri Oct 04, 2019 12:51 pm

Here's what I'm thinking for the time being.

Since you plan to knock out the debt quickly, you will be saving less in the next year or two than you hope to save later. This means there may not even be any money to put in the 403b this year.

It appears you (jointly) are going to be under the limit for deducting a contribution to traditional IRA. So that is an option which accomplishes the same thing as the 403b at a lower cost.

However, I'm inclined to suggest Roth IRA instead unless you really feel you need the tax-deferral to reduce current income.

You and your employer are putting tax-deferred money into a SIMPLE IRA. Edited...Her employer is putting money into something that looks like it will become a pension - that will also be taxable in retirement. I'm thinking what you can save this year might just be split between His SIMPLE IRA, Her Roth IRA and His Roth IRA. After the debt is paid and there is more money to save, then she can start using the 500 index in the 403b.
Last edited by retiredjg on Fri Oct 04, 2019 12:55 pm, edited 1 time in total.

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Fri Oct 04, 2019 12:53 pm

Rheuminator wrote:
Fri Oct 04, 2019 12:42 pm
Mtangler25 wrote:
Fri Oct 04, 2019 11:43 am

Combined Income: $100K (pre tax)

Filing taxes jointly
I believe you said earlier your marginal tax rate is 22%. So long as you are indeed filing jointly and taking the standard deduction of $24,000, your marginal tax bracket is instead 12%, in which case Roth is a no-brainer.
I would agree with that too.

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Fri Oct 04, 2019 1:03 pm

Rheuminator wrote:
Fri Oct 04, 2019 12:50 pm
@Retiredjg, isn’t this a moot point since she has a 403b (I’m assuming that’s the automatic plan her employer contributes to)? Or is that only if she makes elective contributions to it herself?
I think you are asking if she is covered by a retirement plan at work. Yes she is. I suspect the employer contributions are going to something like a 401a, but that's just a guess.

The fact that she is covered by an employer plan at work does not mean she cannot make deductible contributions to tIRA if their AGI is low enough (under $103k).

Though I’m sure it’s more common than I’m aware, I haven’t before seen such an arrangement where an employer contributes their portion without requiring an employee contribution,
I do not think this is a 403b. I think it is a pension plan. But I don't think it matters either way.

...so I’m not totally sure if this type of plan negates tIRA deduction as would a 403b/401k where the employee has to contribute to get a match.
You may be accustomed to thinking that "plan at work" means you "can't deduct a contribution to tIRA", but that is only true for high wage earnings.

See this chart. It is specifically for people covered by a plan at work.

https://www.irs.gov/retirement-plans/20 ... an-at-work

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Rheuminator » Fri Oct 04, 2019 1:12 pm

retiredjg wrote:
Fri Oct 04, 2019 1:03 pm
Rheuminator wrote:
Fri Oct 04, 2019 12:50 pm
@Retiredjg, isn’t this a moot point since she has a 403b (I’m assuming that’s the automatic plan her employer contributes to)? Or is that only if she makes elective contributions to it herself?
I think you are asking if she is covered by a retirement plan at work. Yes she is. I suspect the employer contributions are going to something like a 401a, but that's just a guess.

The fact that she is covered by an employer plan at work does not mean she cannot make deductible contributions to tIRA if their AGI is low enough (under $103k).

Though I’m sure it’s more common than I’m aware, I haven’t before seen such an arrangement where an employer contributes their portion without requiring an employee contribution,
I do not think this is a 403b. I think it is a pension plan. But I don't think it matters either way.

...so I’m not totally sure if this type of plan negates tIRA deduction as would a 403b/401k where the employee has to contribute to get a match.
You may be accustomed to thinking that "plan at work" means you "can't deduct a contribution to tIRA", but that is only true for high wage earnings.

See this chart. It is specifically for people covered by a plan at work.

https://www.irs.gov/retirement-plans/20 ... an-at-work
Very nice — thanks for the info. Perhaps I developed that notion, as you pointed out, due to receiving the initial measure of my personal finance knowledge via Jim Dahle (White Coat Investor), whose target audience is high-income earners.

In any case, as we mentioned already, I think the Roth is the winner here — barring financial catastrophe, the OP’s marginal tax rate is unlikely to ever be below 12%, at least not until retirement, and even then almost certainly not. That doesn’t even consider the compounding potential outweighing the current deduction over such a long time horizon.

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Wiggums » Fri Oct 04, 2019 1:14 pm

retiredjg wrote:
Fri Oct 04, 2019 11:31 am
mtangler25, the answers to all your questions depends on things we don't know. Mostly, what do the other family investments look like and how much can you two save each year? We also need to know if she could deduct a contribution to tIRA (might be unlikely) and if the two of you are eligible to contribute directly to Roth IRA.

There are only 3 good ideas that I see right now.
  • -Don't use the 403b at all....because by the time you fill your work plan and 2 IRAs, there is no more money to save for retirement

    -Use the 403b a lot but only invest in the 500 index (which is the only good choice), holding both bonds and international stocks in other family accounts (they do not have to be her accounts)

    -Use the 403b a little bit for the 500 index and build the rest of the portfolio in the other accounts.
So tell us about your other accounts and how much you can save for retirement each year.
Those high fees are crazy. If you do the 403b contribution, I would select the 500 index. Do the math, but I’d be tempted to skip the 403b and pay down your debt.

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Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 3:43 pm

retiredjg wrote:
Fri Oct 04, 2019 12:39 pm
Mtangler25 wrote:
Fri Oct 04, 2019 11:43 am
...we literally just go married in early September.
This makes a big difference in what I think you should do this year. It takes more than a marriage ceremony to get each comfortable with sharing accounts with a spouse. It won't hurt to give things a year to settle down.

His Accounts:

Schwab Roth IRA

Schwab Total Stock Index (SWTSX)

Schwab Total Inl Index (SWISX)

Simple IRA 3% Employer match

SPDR Total Stock Index (SPTM)

Trowe Price Enhanced Bond Index (PBDIX)

Trowe Price Blue Chip Fund (TRBCX)

HSA
Cash - $1,470.00
Vanguard Target 2060 fund (VTTSX) $1,075.00
His accounts are already reasonably diversified (although we don't know what the ratios are). Have you (alone) got a stock to bond ratio in mind? Have you (together) come up with a stock to bond ratio for your future together? It may be too soon for that last question.


Combined Income: $100K (pre tax)
This is getting near the limit for your wife to deduct a contribution to tIRA, but I think she probably can if you want more tax-deferred savings vs more Roth IRA savings.

So, I cannot give an exact number of how much we will be putting towards our investments in the next 2-3 years.
Let's start with a guess.

How much have you been putting in His SIMPLE IRA? Do you think that will go down? How much have you been putting in Roth IRA? Do you think that will go down?


How much do you think she might be able to save for retirement (over and above the money that is already going to the mandatory thing whatever it is)?

Thank you again for your help and for going into such great detail!

We as a couple have not spoken about AA at all, we have been together for a long time but recently married as I have stated previously. Due to her having debt, most of our financial conversations have been more personal finance/budget/debt related. She knows I understand the investments and we will be having more discussions about AA and other investment details in the near future. Right now we are in the process of selecting benefits, retirement accounts, and getting ready to game plan for paying off debt.

My desired AA for the next 5-10 years is in the neighborhood of 90% equity 10% fixed income. We are both 25, and I am comfortable with an aggressive allocation. I would imagine that by age 30-35 we will be moving towards to the 15%-20% fixed income range. and rebalancing more regularly as we age.


As far as my personal monthly retirement savings, it has gone down as of recent. I was contributing $400/month to my Simple IRA from February (when I became eligible) and $200/month to my Roth. The Roth contributions have varied for the past year. Now that we have two incomes, our budget will be changing... for the better.

As far as future contributions, I am confident that they will increase, just maybe not right away. We haven't sat down and looked at what our loan payments are going to be, there are obviously a lot of factors to consider and there is a 6-month grace period before loan payments start. The loans are income-based payments so that will change starting in 2020.

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Mtangler25
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 3:48 pm

retiredjg wrote:
Fri Oct 04, 2019 12:51 pm
Here's what I'm thinking for the time being.

Since you plan to knock out the debt quickly, you will be saving less in the next year or two than you hope to save later. This means there may not even be any money to put in the 403b this year.

It appears you (jointly) are going to be under the limit for deducting a contribution to traditional IRA. So that is an option which accomplishes the same thing as the 403b at a lower cost.

However, I'm inclined to suggest Roth IRA instead unless you really feel you need the tax-deferral to reduce current income.

You and your employer are putting tax-deferred money into a SIMPLE IRA. Edited...Her employer is putting money into something that looks like it will become a pension - that will also be taxable in retirement. I'm thinking what you can save this year might just be split between His SIMPLE IRA, Her Roth IRA and His Roth IRA. After the debt is paid and there is more money to save, then she can start using the 500 index in the 403b.
retiredjg,

I really like this, yes I think that we can make do with my current accounts and starting a Roth for her, then wait to open the 403b. As of now, our goal is to pay off the debt quickly so we want to throw as much of our income as possible on the pile. There is a case to be made that we should be trying to decrease our taxable income but at the end of the day, we just want to pay it off and decreasing our taxable income will just prolong the process even though reducing taxable income can reduce the monthly payments... But it doesn't decrease the debt!

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by MarkVH0518 » Fri Oct 04, 2019 5:02 pm

You are getting very good advice from retireddg. I often read his recommendations because are so thorough.
He hints about that fact that you may have some one-off opportunities as this year and
your tax situation will be a bit different next year because your wife will work 12 months in 2020 and not just as few as in 2019.

Looking into the near future, the investment recommendations for 2019 may be a bit different in 2020.
It would not be a disaster to follow 2019 recommendations in 2020, but there might be items that you'd prefer to change.
The most significant difference is if your wife is allowed to contribute to IRA in 2019, but is not allowed in 2020 because of increased income.

How comfortable are you with filling tax forms?
With trepidation that I might overwhelm you,
I'm going to recommend that you fill out your 2019 tax forms (however you get it done) asap in February 2020 for tax year 2019.
And immediately after that you create an estimate for TY2020.
You can use the forms from TY2019 to estimate taxes for 2020, if you use software you can use the same software program.
There will only be minor tax changes between 2019 and 2020.

The reason to plan 2020 early is that you are bumping into a number of different limits: tax brackets, IRA contribution limits, maybe some others,
that will impact the recommendations for which accounts to fund first.

To repeat, this is looking ahead just a bit, but it's not that far ahead.
Starting at your ages, you and your wife will achieve a lot by saving at the rate you are proposing even without
being very knowledgeable about taxes.
So it is not *necessary* for you to become knowledgeable on taxes yet.
Still it would be to your advantage to learn about the account limits you might be bumping into in the next 18 and 24 months.

Mark

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Fri Oct 04, 2019 6:12 pm

MarkVH0518 wrote:
Fri Oct 04, 2019 5:02 pm
You are getting very good advice from retireddg. I often read his recommendations because are so thorough.
He hints about that fact that you may have some one-off opportunities as this year and
your tax situation will be a bit different next year because your wife will work 12 months in 2020 and not just as few as in 2019.

Looking into the near future, the investment recommendations for 2019 may be a bit different in 2020.
It would not be a disaster to follow 2019 recommendations in 2020, but there might be items that you'd prefer to change.
The most significant difference is if your wife is allowed to contribute to IRA in 2019, but is not allowed in 2020 because of increased income.

How comfortable are you with filling tax forms?
With trepidation that I might overwhelm you,
I'm going to recommend that you fill out your 2019 tax forms (however you get it done) asap in February 2020 for tax year 2019.
And immediately after that you create an estimate for TY2020.
You can use the forms from TY2019 to estimate taxes for 2020, if you use software you can use the same software program.
There will only be minor tax changes between 2019 and 2020.

The reason to plan 2020 early is that you are bumping into a number of different limits: tax brackets, IRA contribution limits, maybe some others,
that will impact the recommendations for which accounts to fund first.

To repeat, this is looking ahead just a bit, but it's not that far ahead.
Starting at your ages, you and your wife will achieve a lot by saving at the rate you are proposing even without
being very knowledgeable about taxes.
So it is not *necessary* for you to become knowledgeable on taxes yet.
Still it would be to your advantage to learn about the account limits you might be bumping into in the next 18 and 24 months.

Mark
Mark,

I am a bit confused when you say that she wouldn’t be able to contribute to a Roth in 2020. I checked and we are within the income limits for contribution. Am I missing something?

As far as taxes go, I am not proficient with that topic. I need to be though.

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Sat Oct 05, 2019 7:55 am

Just to summarize, I think you should keep contributing to His SIMPLE IRA, His Roth IRA, and start contributing to Her Roth IRA. Don't worry about Her 403b until the debt is gone.

If your joint income is $103k, that puts you in the 12% tax bracket after subtracting the standard deduction. Getting money into Roth is sweet at only 12%. You may never be taxed at a rate lower than that in your life.

If next year you see that you might go into the 22% bracket, perhaps you can shift some new contributions from His Roth to His SIMPLE IRA and pull yourself back down into the 12% bracket.

When/if you start using Her 403b, use only the 500 index and put more bonds into His SIMPLE to maintain the 90/10 ratio you want.

I think you are on a good course. Good luck!

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Wed Oct 09, 2019 1:51 pm

retiredjg wrote:
Sat Oct 05, 2019 7:55 am
Just to summarize, I think you should keep contributing to His SIMPLE IRA, His Roth IRA, and start contributing to Her Roth IRA. Don't worry about Her 403b until the debt is gone.

If your joint income is $103k, that puts you in the 12% tax bracket after subtracting the standard deduction. Getting money into Roth is sweet at only 12%. You may never be taxed at a rate lower than that in your life.

If next year you see that you might go into the 22% bracket, perhaps you can shift some new contributions from His Roth to His SIMPLE IRA and pull yourself back down into the 12% bracket.

When/if you start using Her 403b, use only the 500 index and put more bonds into His SIMPLE to maintain the 90/10 ratio you want.

I think you are on a good course. Good luck!
Thank you very much for your help!

One last question. When/if she enrolls in her 403b and choose just the S&P 500, should we also add an S&P 500 into her Roth? So it is spread across two accounts and we will be able to find a lower expense ratio index fund?

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by retiredjg » Wed Oct 09, 2019 2:12 pm

Mtangler25 wrote:
Wed Oct 09, 2019 1:51 pm
One last question. When/if she enrolls in her 403b and choose just the S&P 500, should we also add an S&P 500 into her Roth? So it is spread across two accounts and we will be able to find a lower expense ratio index fund?
Not necessarily, but there is no way to know what you should put in the Roth IRA until you know what you have in the portfolio as a whole.

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by livesoft » Wed Oct 09, 2019 2:37 pm

Here is my suggestion:

Your family wanted the deductibility and tax-deferred status of your 401(k) and 403(b).

Your spouse's 403(b) will get 6% from her employer. I suspect that the funds that EJ provides have front-end loads, so you all will lose about 5% of the 6% contributed.

If your spouse chooses to forego additional 403(b) contributions to her craptacular plan that means she will get taxed on the money not contributed.
But you all as a family can probably use that money for expenses while her spouse (i.e. YOU!) increase your retirement plan contribution to make up for not having to spend money from your income AND thus increase the combined retirement plans contributions to the 15% or even more that you desire. And get the tax deferral without using the Edward Jones plan.

That is, don't look at this from the point of just your spouses's plan, but look at BOTH of your retirement accounts at the same time.

BTW, based on the family income, I doubt that she would be able to contribute to a deductible traditional IRA, but of course she can (and you can) contribute to Roth IRA(s).
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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by MarkVH0518 » Thu Oct 10, 2019 12:04 pm

You are now getting advice from 2 of the best bogleheads in retireddg and livesoft.

I will add these final two thoughts:
1) if you still uncertain as to whether to invest in your wife's 403b, then DON'T.
Under the principle: "if it keeps you up at night, it's the wrong investment for you"
this must still be bothering you, so don't do it.
In the best case scenario, the 403b investment is a close call, so staying out of the 403b would not be a mistake.

2) You seem to be interested and capable, so you will want to understanding taxes as they impact you.
Start by studying your 2019 tax forms and be sure you understand the non-zero numbers of those forms.
Taxes will take some time to learn because it's complicated. But have patience and don't be frustrated.
My experience is about every 5 to 7 years I learn something I should have been doing 3 years ago.
And I think I'm pretty good at it; that's the nature of taxes.

At your age you are off to a great start.
Mark

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Re: Revised & Shortened Post - Workplace Retirement Plan quesitons

Post by Mtangler25 » Wed Oct 30, 2019 3:18 pm

MarkVH0518 wrote:
Thu Oct 10, 2019 12:04 pm
You are now getting advice from 2 of the best bogleheads in retireddg and livesoft.

I will add these final two thoughts:
1) if you still uncertain as to whether to invest in your wife's 403b, then DON'T.
Under the principle: "if it keeps you up at night, it's the wrong investment for you"
this must still be bothering you, so don't do it.
In the best case scenario, the 403b investment is a close call, so staying out of the 403b would not be a mistake.

2) You seem to be interested and capable, so you will want to understanding taxes as they impact you.
Start by studying your 2019 tax forms and be sure you understand the non-zero numbers of those forms.
Taxes will take some time to learn because it's complicated. But have patience and don't be frustrated.
My experience is about every 5 to 7 years I learn something I should have been doing 3 years ago.
And I think I'm pretty good at it; that's the nature of taxes.

At your age you are off to a great start.
Mark
Thank you Mark, very solid advise. And I agree that I should start focusing on understanding taxes. Unfortunately for most of my young life i have just put my head in the sand and just let my CPA do my taxes, get a refund, then be done with it. I appreciate the encouragement as there is much I have missed and much to benefit from understanding taxes.

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