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  • #16
    are all the 403b options annuities right off the bat, or do they start as target date funds or mutual funds while accumulating and then will become annuities once you start drawing from them at ~72 years old? What if you end up leaving the job- can the 403b be rolled into a new job's 401k? Can it be rolled into a solo 401k? If so- invest and then when you separate from the job roll it over so you avoid annuity option.

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    • #17
      Check on the annuity thing. That is odd.

      Live cheaply so you can pay off the loans or make a side fund.

      Not planning on kids you will recover fast.

      I like the screen name.

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      • #18
        Still checking on the annuity thing and the 457. In the meanwhile I can now access my employer 401a retirement fund options. They'll contribute 10% annually ($22600) to this fund and I will vest on the first day of my 3rd year of employment. While my options are limited, I identified a few appealing ones and I would like some input as to which direction to head. The most appealing options are:
        1. WF/BlackRock S&P500 Index CIT - 0.032% ER - tracks well w/ the S&P based on my research
        2. American Funds Growth Fund of America R6 - 0.31% ER; slightly higher returns than the index fund; R6 class shares have no load; but this is a newer fund that has only been around since 2009
        3. (Default) WF Target Date Fund 2050 R6 - 0.14% net ER

        The S&P500 index makes the most sense to me due to the mix of low ER and good returns, unless there is a good reason to keep a target date fund in my employer-sponsored account.
        I have read about trying to approximate the total market if I don't have access to a fund like VTSAX in order to diversify my investments. Should that be done across my accounts or within the 401a? I have access to the following low ER BlackRock funds within the 401a which could help me achieve this...
        • WF/BlackRock S&P MidCap Index CIT - 0.053% ER
        • WF/BlackRock Russell 2000 Index CIT N - 0.08% ER
        But
        1. Is this necessary?
        2. How do I know what percentage of each to contribute to? None of these funds have ticker symbols for me to be able to use the Morningstar Xray tool.
        3. How about bonds and international markets? Do those need to be represented here as well? I've done a lot of education in the past week but I think one area I'm sorely lacking in is a resource to learn what types of investments (bonds, REIT, stocks, funds, etc.) are best in which buckets (401/403, 457, IRA, taxable, etc.). I would appreciate if someone could share links to good learning about this subject. Perhaps it means I need to review the fundamentals about the underlying accounts and investment classes.
        Thank you.

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        • #19
          I would just stick with the S&P 500 fund for now. You can use substitute symbols for the mid cap fund (IVOO is a good one that is the Vanguard S&P mid cap ETF. IWM is a russell 2000 index ETF. they are pretty much identical to your options). But I would err on the side of keeping things simple honestly.

          You need an overall investing plan that includes an asset allocation. Figure that out first, then worry about asset location. One thing I will say is don't put REITs in taxable. Don't put taxable bonds in a taxable account. WCI has a good series on asset allocation. You probably can't go wrong by spending the $500 on the FYFA course either.

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          • #20
            Thanks! We are slowly trudging along. The HR benefits coordinator for my new employer has hinted to me to put off my 403b selection until this winter because "some good changes are coming." Fingers crossed for something with Vanguard or Fidelity. The other 403b options are not annuities; I have access to mutual funds through Columbia and Franklin Templeton. I believe I can fund my 403b until Dec 31 but I guess I need to ask my employer if I'm eligible for a 5% match on this calendar year (I just started in July) and then again in 2021, or if it's by hiring date, or is there a standard way matches are handled?

            I think we will do the FYFA course in January, thanks for the reminder.

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            • #21
              For 20% of your gross pay, I would not rely on HR or put off to January setting up your investment plan. Some plans limit your contribution to 5% match per paycheck, no catchup. You should cobble together a reasonable plan on your payroll deductions, the accounts and investments. You can always rebalance in January for the “improvements “.
              Time in the market is your path on payroll benefit plans. HR is a poor choice for investment advice.

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              • #22
                Originally posted by Tim View Post
                For 20% of your gross pay, I would not rely on HR or put off to January setting up your investment plan. Some plans limit your contribution to 5% match per paycheck, no catchup. You should cobble together a reasonable plan on your payroll deductions, the accounts and investments. You can always rebalance in January for the “improvements “.
                Time in the market is your path on payroll benefit plans. HR is a poor choice for investment advice.
                +1
                Isn't there a new hire orientation where they cover all of this stuff?
                You can post a screenshot of all your investment options here. Be sure to include fund names (not just ticker symbols) and expense ratios.

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                • #23
                  Originally posted by Lithium View Post
                  I would just stick with the S&P 500 fund for now. You can use substitute symbols for the mid cap fund (IVOO is a good one that is the Vanguard S&P mid cap ETF. IWM is a russell 2000 index ETF. they are pretty much identical to your options). But I would err on the side of keeping things simple honestly.

                  You need an overall investing plan that includes an asset allocation. Figure that out first, then worry about asset location. One thing I will say is don't put REITs in taxable. Don't put taxable bonds in a taxable account. WCI has a good series on asset allocation. You probably can't go wrong by spending the $500 on the FYFA course either.
                  Agreed. Just do the SP500 fund for now. No need for completion index fund until you figure things out. Not every account needs to approximate total market (assuming that's your strategy), rather your total portfolio. So you can put completion index fund in taxable, Roth, or whatever if needed. Same for international etc

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                  • #24
                    Originally posted by Lithium View Post

                    +1
                    Isn't there a new hire orientation where they cover all of this stuff?
                    You can post a screenshot of all your investment options here. Be sure to include fund names (not just ticker symbols) and expense ratios.
                    Anecdotally (daughter went through one last year):
                    Powerpoint presentation with a fairly large group of many levels of new employees. The give you an overview of everything with little focus on retirement plans.
                    Instructions are made to sign on to your account and schedule an appointment with your plan custodial advisor. Limited opportunity for questions, mostly eligibility for a plan as one of another of the options. You might actually spend more time on dental and eyecare options for family plans. Most of the detail is online only.
                    The majority was healthcare options and the employee withholding. In my daughters situation, the physicians healthcare is 100% paid. She mentioned the never even discussed the retirement investment options. That was on your own. Once you get a logon, then you see the details.

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                    • #25
                      Originally posted by Tim View Post
                      Anecdotally (daughter went through one last year):
                      Powerpoint presentation with a fairly large group of many levels of new employees. The give you an overview of everything with little focus on retirement plans.
                      Instructions are made to sign on to your account and schedule an appointment with your plan custodial advisor. Limited opportunity for questions, mostly eligibility for a plan as one of another of the options. You might actually spend more time on dental and eyecare options for family plans. Most of the detail is online only.
                      The majority was healthcare options and the employee withholding. In my daughters situation, the physicians healthcare is 100% paid. She mentioned the never even discussed the retirement investment options. That was on your own. Once you get a logon, then you see the details.
                      Agree that quality and emphasis is highly variable. I certainly wouldn't expect them to break down the investment options, but hopefully if they cover it they could at least clarify eligibility date, vesting schedule, if there is a true up on the match, etc. Often helps to attend with a group so you hear questions that didn't occur to you.
                      Obviously if you are going to a generic new employee orientation dominated by receptionists and MA's it's going to far less useful than one mostly geared for MD's.

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                      • #26
                        Originally posted by Tim View Post
                        Anecdotally (daughter went through one last year):
                        Powerpoint presentation with a fairly large group of many levels of new employees. The give you an overview of everything with little focus on retirement plans.
                        Instructions are made to sign on to your account and schedule an appointment with your plan custodial advisor. Limited opportunity for questions, mostly eligibility for a plan as one of another of the options. You might actually spend more time on dental and eyecare options for family plans. Most of the detail is online only.
                        The majority was healthcare options and the employee withholding. In my daughters situation, the physicians healthcare is 100% paid. She mentioned the never even discussed the retirement investment options. That was on your own. Once you get a logon, then you see the details.
                        This - it's pretty terrible. I was one of two MD's in the room, everyone else was a masters level or below (mostly below). Thankfully the HR coordinator is actually a decent source of information when I pepper her with multiple small questions via email, she did tell me to max out the 403b contribution for this year instead of waiting for new options when I emailed her a follow-up question, so there's that. And anyhow, that's why I'm posting my questions here, right? I'll keep things simple in the 401a, thanks everyone.

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                        • #27
                          You already received some great advices here and are in a better position than most by just being in this forum. I want to emphasize the importance of living below your means and having a high savings rate. When we started out a few years ago, we had a bit higher income than than you guys did but a larger debt burden and a mortgage. We were definitely not financially savvy but with just living an average life, we were able to pay off both in less than 3 year. You will do fine. Congrats on your engagement and enjoy planning for your wedding.

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                          • #28
                            Okay, spent my slow afternoon digging into the 403b options available.
                            Metlife - out, it's all annuities
                            Templeton - out, it's mostly very high ERs
                            Columbia - we have access to a subset of no-load institutional funds but not NINDX which is their S&P500 index fund. Here's a selection of funds from the list I pulled for their combination of low ER and high 5 and 10% returns.
                            Symbol YTD 1 Yr 3 Yr (Annualized) 5 Yr (Annualized) 10 Yr (Annualized) Total Exp Ratio Alpha Beta RSquared Std. Dev. M* Rating
                            CBALX 7.07% 16.86% 9.10% 8.35% 10.11% 0.70% 0.08 0.66 0.97 3.29 *****
                            CLQZX 14.48% 30.05% 16.17% 14.08% -- 0.92% 0.24 1.03 0.96 5.17 ***
                            GEGTX 18.95% 37.54% 18.24% 14.50% 16.03% 0.79% 0.4 1.01 0.93 5.17 ***
                            UMLGX 23.23% 42.91% 19.24% 13.78% 16.31% 0.87% 0.28 1.18 0.86 6.29 ***
                            ACRNX 9.51% 18.57% 13.40% 11.22% 12.25% 0.85% -0.12 1.16 0.87 6.06 **
                            COTZX 20.23% 26.33% 11.98% 8.65% 8.92% 0.64% 71.00% 0.23 45.00% 173.00% *****
                            CCIZX 14.47% 41.46% 21.99% 21.36% 0.99% 42.00% 1.18 83.00% 633.00% ***
                            CMSCX 31.3 42.02 26.63 18.57 16.97 1.08% 0.64 1.28 0.79 7.16

                            I guess this is important context: I don't anticipate staying longer than 3 years at my current employer, just enough to vest fully into the 401a. I could stay on longer as PT staff but I imagine if I'm staying in my city for > 3 years I will have transitioned at least 30 hours of my time to a solo/small practice so I imagine I would be rolling it over into my solo 401k or roth IRA at that time.

                            I was initially intrigued in the GEGTX fund but I'm not sure what to make of factors like the morningstar rating and risk components of each. Does it matter over potentially only 3 years? (Or if we are getting new retirement options next year anyway, am I splitting too fine a hair?) And I understand that more than the numbers selecting a mutual fund (particularly non-index ones) reflects my opinions about the underlying securities/funds, the fund managers' approach, and the direction of the economy as a whole. I don't quite know enough to have informed opinions about such matters.

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                            • #29
                              I don't recognize any of those mutual funds. Are any of them index funds, rather than actively managed? If those are your only options, it's unfortunate you don't have anything at lower cost available.

                              Also, you mentioned the Templeton plan has funds with "mostly" very high ER's. But it's better to be in a plan with one good mutual fund and 10+ terrible funds than be in a plan with all mediocre to bad funds. One good mutual fund may be all you need. The Columbia plan looks pretty bad.

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                              • #30
                                If you're sure you're only going to be participating in the plan for 3 years, I'd suggest picking CBALX (as it has one of the lower ERs on your list, and appears to be reasonably stock-heavy) and putting 100% of your contributions into that. The fund's long-term performance doesn't matter so much, as you are going to be rolling it over into another retirement account soon.

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