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mesaverde

I currently max out a government 457b each year, and contribute to a Fidelity total U.S. stock market index fund in it (expense ratio .07%). I realize this is a valuable benefit that many employees do not have. I am 40 and hope to use this as a strategy for retiring at age 45-50 without incurring an...

mesaverde

I've contributed to all three types of accounts but am currently maxing out a 457b each year as your wife is doing. To me the 457b is clearly superior because the $ can be withdrawn at ANY age upon separation from service, penalty free. Her 403b may not have low cost funds. If it does not have low c...

mesaverde

My favorite experience is a long backpacking trip through the Grand Canyon in the wintertime, which I've done twice. It's the low season, so there are very few people... you feel like you almost have the canyon to yourself! It's also warmer in the canyon than many other places. On the rims, there's ...

mesaverde

One thought: do at least some 403(b) thru age 50. Then roll to Trad IRA and start Roth IRA conversions which will be ideal since you'll have low or no income. After 5 years you can withdraw conversions without penalty (up to age 59.5 then no penalty). Do this every year. By the time you hit 55 you ...

mesaverde

Currently I'm maxing out a government 457b each year (low cost index funds with Fidelity) and investing ~$1,200/month in a Vanguard taxable account. I'm in the 25% federal tax bracket. I'm 40 and my goal is to retire at age 50, when my mortgage (3.25% fixed) will be paid off. I will have a generous ...

mesaverde

William Million wrote:Noteworthy how poorly this managed fund lags its benchmark, suggesting inept fund management.

According to the numbers on Morningstar.com, this fund (VGPMX) has outperformed stocks in its category for most time periods.

mesaverde

Thank you for the feedback. I'm leaning towards keeping the loan. Perhaps I'll just put it on autopayments so it's less hassle and forget about it. It's a good feeling knowing the loan can be paid off at any time, while earning more than .9%.

mesaverde

I recently bought a new Honda Fit and plan to drive it "until the wheels fall off" (as I did with my last car, which I drove to 272,000 miles). I have the cash to pay for the car in full, sitting in a Vanguard Prime money market account. But at the last moment I decided to finance the car ...

mesaverde

hello, I also had a 30 year fixed FHA loan that began in 2010, at 4.75%. In late 2011, I was able to do a no cost refinance to a 15 year fixed loan @ 3.25%. I paid the 30 year FHA loan balance down (adding additional principal to an online payment) to avoid mortgage insurance on the new 15 year loan...

mesaverde

hi eschaef, I am a teacher and went through the same thing you are going through years ago. This is what I did: 1. went and spoke at a school board meeting about adding low cost 457b and 403b vendors, and showed them in diagrams/statistics just how damn expensive the annuities are. 2. followed up wi...

mesaverde

hello NHRATA01, I've been maxing out a government 457b plan (as opposed to 403b) for years because of the clear advantage of the 457- one can withdraw penalty free at ANY age upon separation from service. Translation= as soon as you think you have enough saved, you have the option of retiring, perha...

mesaverde

Thank you everyone for the feedback. I'm leaning towards the Vanguard fund because: 1. I don't have an account with USAA or T Rowe Price, and buying their funds through Vanguard "fund access" involves more red tape than buying the Vanguard fund directly ($20 purchase fee for the T Rowe Pri...

mesaverde

Bob's not my name wrote:
mesaverde wrote:I itemize
5.75% * (1 - 25%) = 4.3%

hi Bob's Not My Name,
Could you explain this math? Thanks!

mesaverde

livesoft wrote:Is this a trick question? It seems one fund will be better by 5.75% times the yield, but I am not going to tell you which one.

Thank you for the feedback livesoft... my main concern is the difference in expense ratio (the Vanguard fund is at .20% and the USAA fund is .55%)

mesaverde

hello, I am trying to decide whether to invest in the Vanguard high yield tax exempt fund (VWAHX) or USAA Virginia bond fund (USVAX). I am in the 25% federal tax bracket and pay 5.75% in Virginia state taxes. In comparing the two funds, they both appear to have similar yields and their credit qualit...

mesaverde

I had the same FHA 30 year loan you have and refinanced to a 15 year loan at a much lower interest rate. It's a win-win situation: you won't waste any more money on PMI AND you will pay much less interest. But don't take anyone's word for it... run the numbers for yourself! Here's perhaps the best c...

mesaverde

I would like to invest in a bond fund (in a taxable account) with the goal of using these funds to pay down/off my mortgage sometime in the future. I am in the 25% federal tax bracket and pay 5.75% in Virginia state taxes. The mortgage I have is a 15 year fixed @ 3.25%. There are 14 years left on t...

mesaverde

JDCPAEsq wrote:Why don't you just make principal payments on the mortgage rather than putting the money in a bond fund?
John

I prefer to have the money in a liquid state. I know this is a personal choice which is often discussed on this forum.

mesaverde

I would like to invest in a bond fund (in a taxable account) with the goal of using these funds to pay down/off my mortgage sometime in the future. I am in the 25% federal tax bracket and pay 5.75% in Virginia state taxes. The mortgage I have is a 15 year fixed @ 3.25%. There are 14 years left on th...

mesaverde

The OP has indicated he will have no income for the first fifteen years of retirement. He has also said he's not sure he'll be in a lower bracket then. Those statements are incompatible. We must be missing an essential piece of information. I'm maxing out a government 457b each year to have as a pe...

mesaverde

If I begin to use the extra $1,000/month to pay down the mortgage to the point where I would not need to pay PMI any longer, it will take 12 months to reach that point, and I would only save $500 or so in PMI (actually less, because I can deduct PMI from income taxes). If I use the extra $1,000 a mo...

mesaverde

Here's what I would do with the extra $1K a month if I were you: 1. Pay down the mortgage until you no longer have to pay PMI. 2. Save enough in taxable to pay taxes on the $55K conversion. 3. Split the rest. Half paying extra on the mortgage and half in taxable for retirement. Do you have an emerg...

mesaverde

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I'll also be able to start drawing a full pension starting at age 65, which will be ~$37k/year, increasing each year with inflation. I'd probably be able to defer social security until a late age.

Any feedback/thoughts would be much appreciated!

mesaverde

I was in your shoes, maxing out a Valic 457b with the expectation that I would continue to do so for the next 10 years. However, with some prodding my employer just added Fidelity as a 457b option and this week I transferred the Valic 457b to a Fidelity 457b. Are you investing directly in mutual fun...

mesaverde

have you run any sorts of numbers to see when you could start drawing your pension and how much you'd get at various ages? Retiring at 50 is pretty aggressive, you may need to contribute to BOTH funds... it obviously depends on how big your portfolio is now.But I don't really study up on early reti...

mesaverde

My employer recently added Fidelity as a 403b option. After contributing the maximum amount to a Vanguard Roth IRA each year, I’m able to contribute the maximum amount- $17,000, to either a 403b or government 457b. There is no employer match in either plan. I’m currently contributing $17,000/year to...

mesaverde

Quick comments based on little information: VSTIX Valic S&P 500 index fund (ER .38%) <--not bad VMIDX Valic mid cap index fund (ER .39%) <--not bad VCSLX Valic small cap index fund (ER .44%) <--not too bad, can probably do better VCCBX Valic core bond fund (ER .77%) <--can almost certainly do b...

mesaverde

Quick comments based on little information: VSTIX Valic S&P 500 index fund (ER .38%) <--not bad VMIDX Valic mid cap index fund (ER .39%) <--not bad VCSLX Valic small cap index fund (ER .44%) <--not too bad, can probably do better VCCBX Valic core bond fund (ER .77%) <--can almost certainly do b...

mesaverde

livesoft wrote:Use your emergency fund money to contribute to a Roth and invest it conservatively since it is your emergency fund. In other words, your Roth will hold your emergency fund.

Yes, I'm doing this already... in fact, the majority of my emergency fund consists of Roth IRA contributions.

mesaverde

Is this a government 457b plan? It has to be a government 457b plan to allow withdrawals early if you retire at 50. Also, are there other investment choices in the 457b plan? Yes, it's a government 457 plan (I am a public school teacher). There really aren't any other low cost investment choices......

mesaverde

How much do you have in your portfolio already? If you aren't able to max both of those at your age, are you saving enough to make your goal of retiring in approximately ten years? That's a very aggressive plan. Brian The reason I posted this is because it will be a challenge to contribute to both ...

mesaverde

Hello, I'm able to contribute to either a Roth IRA or 457b through my employer, but not both. I have a sufficient emergency fund already. The benefit of contributing to the 457b is that I could retire earlier... there are no penalties for withdrawing the money at any age after retiring from my emplo...

mesaverde

hello, I recently refinanced to a 15 year fixed mortgage, with an interest rate of 3.25% . After federal and state tax deductions, the effective interest rate is just 2.3% . Each month I am making significant extra cash that could be used to pay down this mortgage. I am already contributing 25% of m...

mesaverde

hello, My girlfriend & I are in our 30's, have stable professional careers, are fully committed to each other for a long term relationship, and are deeply in love. We've both been married and divorced once, and don't really plan to get married again or have kids (neither of us has kids). We both...

mesaverde

Based on your advice, I will definitely add a 457 and perhaps reduce my cash/emergency fund even more, especially considering that I will have access if I lose my job. I would like the implement the idea from the wiki about placing cash needs in a tax-advantaged account. FYI, the NYS Deferred Compe...

mesaverde

If your expense ratios are anywhere close to equal in the 403b and 457b plans, the 457b wins hands down. It's pretty simple: the more you're able to contribute to the 457b, the earlier you should be able to retire. That's because there's no 10% early withdrawal penalty on a 457b (as there is with a ...

mesaverde

Better yet, don't get married unless you have a specific reason to do so. Couples can be committed, faithful, and completely in love without being married. Marriage is a legal contract with potential negative results if things go wrong and it ends in divorce.

mesaverde

The perfect example of manager risk.
On top of that, those who invest in this fund pay a higher price for manager risk!

mesaverde

For someone young, in their 20's or early 30's, a 30 year mortgage often makes sense because of the lower payments and mortgage interest deduction. For many young adults, they may be stretching it just to make payments on a 30 year mortgage. Also, many (most?) countries outside the U.S. don't allow ...

mesaverde

I'm in the process of refinancing also. Today I filled out an online application with First Internet Bank. There are some positive comments about them here on Bogleheads. You may want to do a search and read up on them.

mesaverde

I understand the arguments against paying PMI. In my particular situation, I am paying $100/month in PMI. In my Roth IRA with Vanguard, I could withdraw the contributions in order to bring the loan to value ratio to 78% and stop paying this PMI. But I like the peace of mind of having the $ there eit...

mesaverde

I've read this forum for years and have read time and time again that one should put 20% down when purchasing a home (in order to avoid mortgage insurance). As if this applies to everyone, in every situation. For many lower/middle class incomes, saving a 20% down payment can be a difficult task, per...

mesaverde

I'm a gringo and have learned Spanish pretty well. I often travel to Latin America on my own; in that way, I am constantly speaking Spanish in a variety of situations. Ideally, immersion is the best, but you said that isn't possible so here are some suggestions: 1. If possible, make friends whose 1s...

mesaverde

I'm so glad I found this site. I've been funding my 457 plan with Metlife (varaible annuity product) for the last several years and, in my opinion, paying excessive fees. I was in their cheapest s&p index fund ( actually it's called a sub account) and still paying over 1.6%. I just switched my ...

mesaverde

Could you not open a Roth-IRA outside this plan, and then use whichever bond fund you like? Yes, but I hope to retire at age ~50 and will depend on this plan for ~10 years before reaching age 59.5, when penalty-free distributions can be made from other retirement accounts. Given that, a bond fund i...

mesaverde

Hello, I contribute to a 457b. For stocks, I'm only investing in index funds. But there are no bond index funds. The lowest cost intermediate bond funds (load waived) are: PTTAX Pimco Total Return .90% ER, 430% turnover VCCBX Valic Core Bond Fund .77 ER, 82% turnover VCGSX Valic Government Securitie...

mesaverde

I'm a public school teacher. For 15 years I've traveled outside the US several times a year. I can honestly say that, despite the hassle and high cost, spending periods of time outside the US has overall been an enriching and educational experience. It helps to satisfy my curiosity about other cultu...

mesaverde

In my employer's government 457b plan, the international fund offerings are not so great . The two best options appear to be: REREX American Funds Euro Pacific Fund (ER .86%) DIISX Dreyfus International Index (MSCI EAFE) fund (ER .60%) There appear to be pros and cons for both funds: REREX pro : Ha...

mesaverde

In my employer's government 457b plan, the international fund offerings are not so great. The two best options appear to be: REREX American Funds Euro Pacific Fund (ER .86%) DIISX Dreyfus International Index (MSCI EAFE) fund (ER .60%) There appear to be pros and cons for both funds: REREX pro : Has ...

mesaverde

Hello, In 2010 I purchased my first home. I will be itemizing deductions for 2010 taxes. From the mortgage interest deduction alone, I will be receiving a refund of ~$2,400. During 2010 I had claimed 2 federal allowances on form W-4. So, perhaps I can avoid getting such a large refund by claiming mo...

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