Just think of it! pros and cons in mutual funds in Mutual funds, stocks and bonds. Sometimes Annuities are the best fit. Warren buffet bought ab annuity. I t depends on what the client wants. Diversification is the way to go.
Thanks again for your super clear and informative videos! I really appreciated how you kindly noted that these retirement plans are very confusing, especially for someone new to investing. Would love to see a similar clip from you on CalSTRs. Are CalSTRs invested? Are there any interest rates or are they idle cash? Can we roll them over pre-retirement to invest?
Hi Ngoc and thank you for the comment and questions. CalSTRS invests the funds as most other pension funds. They pool everyone's money together and invest in a variety of different securities and implement different strategies according the actuarial needs of the fund. I believe some of CalSTRS benefits can be rolled over but I would consult with a CalSTRS representative to be sure.
I work for a school district in California and the only plan that was offered to me was the following: 403(b) Tax-Sheltered Annuity Plan and within this contract, the money is invested in the following: Vanguard total stock, mid-cap, and large cap mutual funds. I did have a positive return in 2020.
Hi and thank you for the question. In general, stocks has a positve return last year. However, to be sure, you should review your account statements. It's a little concerning to me that you were only offered one plan. Most school districts offer multiple investment providers to choose from. If you'd like me to look into your situation in more detail, we should schedule a call to review. You can reach me via my website at www.theastuteadvisor.com
Hello and thank you for taking the time to break this down. Very informative. I know you’ve posted this a while back and I’m just seeing this now but, my wife was recently hired as a professor at a university and offered a 403b. Sadly did not know we had to manually set everything up. They have it automatically allocated between four different places at 25% each but that just seems too much to keep track of - they have it with TIAA, Fidelity and two other places I can’t remember offhand. We’re thinking about just having it at Fidelity and wanted to know if you recommend splitting it between different places or keeping it with one? Thanks.
Thanks for the question. I'm suprised they allocate it among separate custodians. That definitely makes it difficult to keep track of. I would consider using Fidelity. TIAA has some funds that have major time commitments and restrictions. For example, I've had several clients invest in the TIAA guaranteed portfolio. What they didn't realize is that you can only withdraw a certain percentage of it each year. One client invested in it 10 years ago and left the employer a few years back. When we contacted TIAA to roll it into an IRA, they informed us that you could only access a portion of it over the coarse of 9 years. I've seen this several times. I don't think TIAA is adequately explaining this to 403b participants. I don't even think they should offer something like that. I hope this helps. If it does, consider checking out my 2021 Financial Planning Cheat Sheet www.theastuteadvisor.com/2021cheatsheet
@@davidn.waldropcfp2260 Wow! Thank you so much for taking the time to reply with such detail. Yeah, I was blown away when we logged on at first and it was spread out like that. I’m so glad to hear you say this because - late last night - I decided that we were going to have to be fully with Fidelity. So this gives me peace that I made the right decision. And yes, I agree - the idea of having it separated out seems way too much to handle. Again, thank you for taking the time to reply - I really appreciate it. I’ll check out that link you sent right now.
Everyone makes money everyday. Whether commission or fees for service. It's all part of service. Does it really matter whether you get commission or not. Asking that question about commissions infers a dishonesty. That's a no no!
Hi Joji, if the investment lists a 5 letter ticker symbol after the full name of the security, likely a mutual fund, if index mutual fund, will likely say "index" in the name of the fund. If annuity, they will often be referred to as "sub account." Ultimately, to be sure, you will need to read the detailed description of the investment or consult a plan representative.
I'm a teacher and complete rookie to the finance game - I have the option within my 403b plan to choose Vanguard Total Stock Market Index (VITSX) - is that a solid option?
If you have a long term time horizon (plan to be invested for more than 10 years) and are comfortable seeing the investment fluctuate by +20% or -20% and possibly more, it may be appropriate for you. Everyone has a different time horizon, risk tolerance, and investment objective so it's impossible for me (or any advisor) to say without knowing more about you. If you'd like to book a one hour consulting call with me, send me an email. If you're new to investing, a consulting call with me will help you get on the right track. You can email me through my website www.theastuteadvisor.com
I’m a teacher and have the 403b plan for about 10 years . Somebody told me to put the minimum and get the Lincoln plan. Im putting $500.00 every month on the 403b . Which Will you suggest for me? I’m in my 21 years of teaching and planning to retire in 8-9 years more.
Hi Norma, thanks for the question and apologies for the delayed response. Unfortunately, i don't have enough information to completely answer the question. However, in general, the goal should be that you put as much as you can into the 403(b) or other type of retirement account as possible. Be careful though. If the investment product is an annuity or some other account with high fees and restrictions, you might be just fine staying away from the the 403(b) and invest in an IRA instead (depending on how much you contribute).
403b plans have so many downsides to them...it is time to revamp the entire system. I made a video on all the dangers of investing in 403b plans. Change starts with education and awareness.
So my district discovered that my investment company was contributing to my roth ira and not a 403b. So the company wants to move the money (3000) into a 403b and they offered to pay me the lost gains as well (500) if I sign a release that will indemnify them. They claim that both of these money moves will be non taxable events. Is that true? My teacher spidey sence tells me maybe not.
@@davidn.waldropcfp2260 Let's say someone on your team screwed up and did this. Wold it be "mistakes like this happen from time to time and we have ways of correcting it that are not a big deal" or would it be "o crap hopefully our little teacher client doesn't get a tax attorney and sue us because we messed up big time"? Can you give me a reaction on that much?
@@royburnacoven3559 I think it would be more like the former. Most things can be corrected. However, that doesn't mean the correction won't have an adverse effect on you. I would make sure that if they are acknowledging it was their error, they need to cover the costs associated with fixing it
Apologies for the delayed reply. VALIC is a major player in the 403(b) annuity and variable annuity market and has been around for many years. I'm not endorsing them as a company nor any of its brokers or employees. Ultimately, you would want to consult with an independent advisor to review any products your are considering, regardless of the company.
Hi Leo, Thank you for contributing to the conversation. You can have multiple Roth IRAs and contribute to all of them so long as you don't go over the IRS contribution limit for that year. However, while you can do it, contributing to multiple Roth IRAs isn't the best way to go about it. Be sure to get my 2020 Financial Planning Cheat Sheet located here www.theastuteadvisor.com/2020cheatsheet
Few harried teachers have the energy to become financial experts. So they just do what the retirement investment companies recommend while they have a few minutes to spend listening to the pitch and signing up. Few harried teachers make enough to put large monthly amounts in the plan - if all they have is their salary to live on. The various retirement plans are a relic from the past. Smart young people are beginning to realize there is no future, given the climate collapse and all the consequences.
I’m glad you found it helpful. You should also check out my 2020 Financial Planning Cheat Sheet (linked below). It’s been updated for the new retirement rules taking effect this year. www.theastuteadvisor.com/2020cheatsheet
I'm not a teacher. I’m so sorry I’m seeing this just now. I wasn’t getting the notifications for some reason. I’ve got a lot to reply to. If you download my 2023 Financial Planning Cheat Sheet, I will be able to respond directly via email. Here’s the link: www.theastuteadvisor.com/2023cheatsheetLP
Hi Tommy, you would likely benefit from a portfolio review by a professional. They can make sure your investment objective, time horizon, and risk tolerance are matched up with the fund you're invested in. Just be sure to work with a CFP who is independent and not trying to sell you anything. In other words, a fiduciary advisor. Good luck
Just think of it! pros and cons in mutual funds in Mutual funds, stocks and bonds. Sometimes Annuities are the best fit. Warren buffet bought ab annuity. I t depends on what the client wants. Diversification is the way to go.
You speak in a way that is very humble and enjoyable to listen to. Thank you
Thank you for the kind words. Be sure to get my 2020 Financial Planning Cheat Sheet located here www.theastuteadvisor.com/2020cheatsheet
Thanks again for your super clear and informative videos! I really appreciated how you kindly noted that these retirement plans are very confusing, especially for someone new to investing. Would love to see a similar clip from you on CalSTRs. Are CalSTRs invested? Are there any interest rates or are they idle cash? Can we roll them over pre-retirement to invest?
Hi Ngoc and thank you for the comment and questions. CalSTRS invests the funds as most other pension funds. They pool everyone's money together and invest in a variety of different securities and implement different strategies according the actuarial needs of the fund. I believe some of CalSTRS benefits can be rolled over but I would consult with a CalSTRS representative to be sure.
I work for a school district in California and the only plan that was offered to me was the following: 403(b) Tax-Sheltered Annuity Plan and within this contract, the money is invested in the following: Vanguard total stock, mid-cap, and large cap mutual funds. I did have a positive return in 2020.
Hi and thank you for the question. In general, stocks has a positve return last year. However, to be sure, you should review your account statements. It's a little concerning to me that you were only offered one plan. Most school districts offer multiple investment providers to choose from. If you'd like me to look into your situation in more detail, we should schedule a call to review. You can reach me via my website at www.theastuteadvisor.com
Hello and thank you for taking the time to break this down. Very informative. I know you’ve posted this a while back and I’m just seeing this now but, my wife was recently hired as a professor at a university and offered a 403b. Sadly did not know we had to manually set everything up. They have it automatically allocated between four different places at 25% each but that just seems too much to keep track of - they have it with TIAA, Fidelity and two other places I can’t remember offhand. We’re thinking about just having it at Fidelity and wanted to know if you recommend splitting it between different places or keeping it with one? Thanks.
Thanks for the question. I'm suprised they allocate it among separate custodians. That definitely makes it difficult to keep track of. I would consider using Fidelity. TIAA has some funds that have major time commitments and restrictions. For example, I've had several clients invest in the TIAA guaranteed portfolio. What they didn't realize is that you can only withdraw a certain percentage of it each year. One client invested in it 10 years ago and left the employer a few years back. When we contacted TIAA to roll it into an IRA, they informed us that you could only access a portion of it over the coarse of 9 years. I've seen this several times. I don't think TIAA is adequately explaining this to 403b participants. I don't even think they should offer something like that. I hope this helps. If it does, consider checking out my 2021 Financial Planning Cheat Sheet www.theastuteadvisor.com/2021cheatsheet
@@davidn.waldropcfp2260 Wow! Thank you so much for taking the time to reply with such detail. Yeah, I was blown away when we logged on at first and it was spread out like that. I’m so glad to hear you say this because - late last night - I decided that we were going to have to be fully with Fidelity. So this gives me peace that I made the right decision. And yes, I agree - the idea of having it separated out seems way too much to handle. Again, thank you for taking the time to reply - I really appreciate it. I’ll check out that link you sent right now.
Everyone makes money everyday. Whether commission or fees for service. It's all part of service. Does it really matter whether you get commission or not. Asking that question about commissions infers a dishonesty. That's a no no!
Awesome video! What would be the easiest way to determine if the investment you invested in is a mutual fund, index fund, or annuity?
Hi Joji, if the investment lists a 5 letter ticker symbol after the full name of the security, likely a mutual fund, if index mutual fund, will likely say "index" in the name of the fund. If annuity, they will often be referred to as "sub account." Ultimately, to be sure, you will need to read the detailed description of the investment or consult a plan representative.
Great video!
Thank you for sharing.
Thank you for the kind words. Happy to help.
I'm a teacher and complete rookie to the finance game - I have the option within my 403b plan to choose Vanguard Total Stock Market Index (VITSX) - is that a solid option?
If you have a long term time horizon (plan to be invested for more than 10 years) and are comfortable seeing the investment fluctuate by +20% or -20% and possibly more, it may be appropriate for you. Everyone has a different time horizon, risk tolerance, and investment objective so it's impossible for me (or any advisor) to say without knowing more about you. If you'd like to book a one hour consulting call with me, send me an email. If you're new to investing, a consulting call with me will help you get on the right track. You can email me through my website www.theastuteadvisor.com
403b is the way to go
I think you mean VTSAX? That's what I invest in. Solid option in my opinion.
maybe talk about IUL insurance?
Uh, yeah, your advisor probably gets compensated in some manner.
I’m a teacher and have the 403b plan for about 10 years . Somebody told me to put the minimum and get the Lincoln plan. Im putting $500.00 every month on the 403b . Which Will you suggest for me? I’m in my 21 years of teaching and planning to retire in 8-9 years more.
Hi Norma, thanks for the question and apologies for the delayed response. Unfortunately, i don't have enough information to completely answer the question. However, in general, the goal should be that you put as much as you can into the 403(b) or other type of retirement account as possible. Be careful though. If the investment product is an annuity or some other account with high fees and restrictions, you might be just fine staying away from the the 403(b) and invest in an IRA instead (depending on how much you contribute).
You should contribute the maximum allowed.
Thank You Sir!
403b plans have so many downsides to them...it is time to revamp the entire system. I made a video on all the dangers of investing in 403b plans. Change starts with education and awareness.
Very true Rich. Thanks for your input!
So my district discovered that my investment company was contributing to my roth ira and not a 403b. So the company wants to move the money (3000) into a 403b and they offered to pay me the lost gains as well (500) if I sign a release that will indemnify them. They claim that both of these money moves will be non taxable events. Is that true? My teacher spidey sence tells me maybe not.
I'm sorry to hear this. I have not encountered a scenario like this and am hesitant to weigh in. Please let us know how it develops.
@@davidn.waldropcfp2260 Let's say someone on your team screwed up and did this. Wold it be "mistakes like this happen from time to time and we have ways of correcting it that are not a big deal" or would it be "o crap hopefully our little teacher client doesn't get a tax attorney and sue us because we messed up big time"? Can you give me a reaction on that much?
@@royburnacoven3559 I think it would be more like the former. Most things can be corrected. However, that doesn't mean the correction won't have an adverse effect on you. I would make sure that if they are acknowledging it was their error, they need to cover the costs associated with fixing it
Shared
Thanks so much and hope you found it helpful!
Is VALIC good?
Apologies for the delayed reply. VALIC is a major player in the 403(b) annuity and variable annuity market and has been around for many years. I'm not endorsing them as a company nor any of its brokers or employees. Ultimately, you would want to consult with an independent advisor to review any products your are considering, regardless of the company.
@@davidn.waldropcfp2260 thank you. Sorry I never saw your reply. I was just revisiting this video. I had valic and rolled over to vanguard.
so how many Roth IRAs can one open?or does it have to meet the limit overall?
Hi Leo, Thank you for contributing to the conversation. You can have multiple Roth IRAs and contribute to all of them so long as you don't go over the IRS contribution limit for that year. However, while you can do it, contributing to multiple Roth IRAs isn't the best way to go about it. Be sure to get my 2020 Financial Planning Cheat Sheet located here www.theastuteadvisor.com/2020cheatsheet
Thanks for not clearing this up.
Few harried teachers have the energy to become financial experts. So they just do what the retirement investment companies recommend while they have a few minutes to spend listening to the pitch and signing up. Few harried teachers make enough to put large monthly amounts in the plan - if all they have is their salary to live on. The various retirement plans are a relic from the past. Smart young people are beginning to realize there is no future, given the climate collapse and all the consequences.
I’m glad you found it helpful. You should also check out my 2020 Financial Planning Cheat Sheet (linked below). It’s been updated for the new retirement rules taking effect this year. www.theastuteadvisor.com/2020cheatsheet
Do you have any plans for the impeding Apocalypse?
My retirement plan is to work until I die.
Tell me arent a teacher. Please.
I'm not a teacher. I’m so sorry I’m seeing this just now. I wasn’t getting the notifications for some reason. I’ve got a lot to reply to. If you download my 2023 Financial Planning Cheat Sheet, I will be able to respond directly via email. Here’s the link: www.theastuteadvisor.com/2023cheatsheetLP
I let it randomly choose my 403b investment. the 20k 1yr has lost me 2k. my friend keeps telling me get fxiax. its still positive for him
Hi Tommy, you would likely benefit from a portfolio review by a professional. They can make sure your investment objective, time horizon, and risk tolerance are matched up with the fund you're invested in. Just be sure to work with a CFP who is independent and not trying to sell you anything. In other words, a fiduciary advisor. Good luck