All Forum Posts by: Tom B.

Really great advice everyone! Thanks so much!

I appreciate that Scott!

Sorry Scott-I just saw you did reply to wait on moving her money over. 

Thanks for helping me with this Scott!   

No, she is not retired but she will be contributing for the next 30 years.   The plan MOST of the teachers are in is terrible: 1.3% plan that takes 25% and to puts it in annuities.  I've tried to warn most of them to it out but it falls on deaf ears.    I prescribe to JLCollins Simple Path to Wealth that advises low-cost funds. Personally, I have nothing against fiduciary financial advisors, I just have a bias against the only ones in our district that pretend to be fiduciary suckering all the teachers into this awful high fees.  Most teachers don't even understand what fiduciary means.

That being said; if she's going to move it to index funds regardless, I was wondering what your opinion was: do you think it matters to wait on a direct exchange or it doesn't matter?  

Her "advisors" are screaming "don't sell!"  But she is just making a direct exchange-not selling.
 

PS:   I even tried at a point to price out fiduciary advisors but most were not fee-only and wanted at least 1% of earnings.    Do you know of sensible advisors that can help teachers with reasonable prices?    Do you know what those prices look like per hour?   Thanks

Thanks for your input Sanford!  Glad to see you have your employees' best interests. 

Unfortunately, our district doesn't seem to take much of any interest at all. They allow salesmen to pose as "financial advisors" who are not fiduciary and just try to push us into high fee funds or annuities.    Most of these advisors set-it-and-forget-it and we don't hear from them again.   Therefore I think she, and a lot of teachers, would be better off in low-cost index funds.

To clarify:

-No, her current Valic 403b plan doesn't offer a match.  Our employer offers three brokers:     Two are through Valic and Voya(=actively managed HIGH fees).    The third is through Empower/Great West which offers a slew of low-cost index funds.  

-Our employer does not offer a Roth but I have one myself.  I have told her about Roth but she likes the idea of tax-deferred for now.

-Most teachers I talk to unfortunately are not interested in learning more about investments.  Some don't even contribute to their 403b or ROTH considering the are banking on their pension.

 I suggested this Vanguard Targeted plan because it's at least low-cost and will reallocate for her.   
I was just wondering if moving now or later mattered.  Appreciate it!

Thanks Brandon.   

Yea, the reason I said maybe to wait is her current 403b plan isn't freefalling due to her being invested HEAVILY in bonds.  But this is also the reason their 403b plans don't perform well in a bull market.   

Here is the other kicker.  They take 25% of our money and put it in annuities that earn 3% while they invested god knows what during the bull market of our money.  If we want to direct exchange, we have to wait FIVE years to pull it out.    

I just can't see the benefit of waiting on a direct exchange, considering she's in it for the long haul.

Appreciated 

Before people scream "DON'T SELL NOW!" please hear me out:

A friend of mine realized her actively managed 403b plan had a HIGH FEE 1.30% expense ratio and wanted to direct exchange into a Vanguard low-cost Index fund Vanguard 2050 at .15% ER that is offered).   It seemed like a good idea until Coronavirus set in and the market went haywire.  

  We are public school teachers so the only advisors offered are salesmen that push us into sucky 403b high fee plans. Most other fee-only advisors are expensive or want 1% for advice.  She doesn't understand much about finance so she asked me for advice.

Situation: She is 30 years old, a teacher, and will be investing for the next 25-30 years.  

Question: Do you think she should ...

A)  NOT do a direct exchange now rather leave her 403b plan alone and don't worry about the high fees?

B) DIRECT EXCHANGE into the Targeted Vanguard 2050 considering she will be in it for a while and might as well take advantage of the fire sale on stock?

C) Leave her old 403b plan alone, BUT ALSO open the Vanguard 2050 in order to contribute until this blows over, and then direct exchange (my advice).

She is not interested in real estate.  

I appreciate any help!

I just acquired my first SFH in Rockford. Great areas and opportunities. Not to mention great people/investors that helped me throughout the process. Going to look for our next one soon!

Great work!  Just wondering, did you talk to the bank about the loan/refi rates before the purchase, during the renovations, or only after you had it finished with a renter in?  

Also, wondering what were the major projects involved in this property.  Appreciated!

@John Neff

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