Portfolio Advice Please! - First Time Poster

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Topic Author
Emmitt
Posts: 20
Joined: Tue Mar 23, 2021 4:29 pm

Re: Portfolio Advice Please! - First Time Poster

Post by Emmitt »

Sahara wrote: Wed Apr 14, 2021 4:32 am
Emmitt wrote: Tue Apr 13, 2021 9:04 pm
I've tried to do some research and it seems like Invesco might be the best of the bad options. I've found that there is a $30 annual fee, but I can't find many ERs on the funds, and I'm not sure, but I don't believe it's an annuity product.

Thanks for the info on the NYSUT legal plan. I had no idea. I need to have a will written. Did you use this service and were you happy with it?
I did use the NYSUT legal plan this year. For retirees, the fee is only $55. I signed up and paid online. Then I completed the PDF and mailed it to the legal firm in NYC. About 3 weeks later my documents arrived and I reviewed them. There were 2 local law firms listed for execution (signing) of the documents. I scheduled an appointment and the execution took about 15 minutes overall. The process is very simple which was exactly what I wanted. It’s a great value.

https://memberbenefits.nysut.org/progra ... rvice-plan

Additional overly helpful retired NY teacher advice for future consideration that you may already know:

1. Salary - Max out your graduate credits to max out your salary and therefore your pension. Learner’s Edge was popular in my district.

2. Health Insurance - As retire2022 mentioned, you’ll want to investigate your district’s contribution to health insurance after age 55. In my district coverage continues after 55 at a reduced rate governed by the contract. While working, single teachers pay 10% of the premium. Single retirees pay 5% of the premiums. Other districts require sick days or much higher contributions to the cost of health insurance prior to age 65. This is something you’ll want to be aware of in advance.

3. Sick days - We had no payout upon retirement for accrued sick days and they were not used in any way to cover the cost of post-retirement health insurance but I know local districts who operate in this manner. Others pay upwards of $100 per day upon retirement.
Great info, thank you! I'll definitely be looking into the NYSUT member benefits.

1. I will look into learner's edge. I also coach and take numerous supplemental assignments which I will heavily focus on during my final three years in order to maximize my pension.

2. Our current contract has a major highlight in it that states that after 20 years of service the district will pay 100% of single coverage health care costs from our retirement year (55 for me) up until we qualify for Medicare.

3. We can accumulate up to 180 sick days and upon retirement the districts will buy them back at a per diem rate (currently $150). That payment goes directly into my established 403b account, which is another major factor in the push for a cost effective provider.

It's great to get the opportunity to discuss these factors and obtain advice from a retired NYS teacher, so thank you.
Sahara
Posts: 603
Joined: Tue Dec 04, 2018 5:21 pm

Re: Portfolio Advice Please! - First Time Poster

Post by Sahara »

It's my pleasure to add to your knowledge about some of these issues. You are already much better informed than many of my ex-colleagues.

You will want any course you use to advance on the salary schedule approved prior to enrolling. We have some local districts that do not allow the Learner's Edge courses for one reason or another. I did take a NYSUT course one summer as well, but I didn't find it as beneficial as the courses I took at Learner's Edge. One can significantly increase their income over their career in this manner.

Regarding health insurance, that really is excellent. The coverage most likely stipulates that the benefit is dependent upon "retirement." In my district that meant applying for your pension with NYSTRS and a few faculty members were disappointed that they were unable to utilize the benefit when leaving earlier but attaining 20 years. Just one of those complications you want to know ahead of time as you continue to plan.
retire2022
Posts: 3286
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Portfolio Advice Please! - First Time Poster

Post by retire2022 »

Emmitt wrote: Sat Apr 17, 2021 2:09 pm
So, where I stand right now, my new numbers are as follows:

Desired Asset Allocation:
85% stocks
15% bonds
International allocation: 20% of stocks

Roth IRA
Current Contribution - $6,000/year
36% -Vanguard Total Stock Market ETF (VTI) (0.03%)
20% -Vanguard Total International Stock ETF (VXUS) (0.08%)
15% -Vanguard Total Bond Market ETF (BND) (0.04%)


NYSDCP 457b
Current Contribution - $6,000/year
3% -NYSDCB Equity Index Unitized Account, 0.0084% (S&P 500 large cap stocks)
1% -NYSDCB Russell 2500 Index Unitized Account, 0.0225% (mid/small cap stocks)


AXA/Equitable 403b
Current Contribution - $225/year (One Time Annual Employer Contribution)
25% -EQ/Equity 500 Index (.55) +$30 Annual Fee & 1.2% Annual M&E Fee

I know it's been recommended that I not keep bonds in my Roth, but I'm not really sure how I can do that and keep my current AA intact. Does this seem like the best I can do at the current moment, or do you see glaring necessities? I'd really appreciate any further advice as I move forward. Thanks again!
Emmitt

I recommend you keep bonds in taxable account instead of Roth IRA.

I keep the most riskiest securities which is 28% of Vanguard Information Technology VGT 0.10% in my Roth IRA.

In addition if we have a "Really Bad Day" like March 23, 2020 then the bonds could be liquidated and be used as "Dry Powder" if you have cash you should think about some taxable accounts as well.

Having taxable accounts, Vanguard Total Stock Market VTI could come in handy to buy another home or vacation home, or college fund for future children if you two decide.

This is my opinion the only change I would suggest.
User avatar
vanbogle59
Posts: 1314
Joined: Wed Mar 10, 2021 7:30 pm

Re: Portfolio Advice Please! - First Time Poster

Post by vanbogle59 »

If your portfolio were a car, it would be very shiny and run like a dream. :mrgreen:
But where are you going?

Maybe I missed it, but have you worked out your goals? Hard to know HOW to do something until you know WHAT you are trying to accomplish.
(If you've already done all this, just tell me to buzz off :-) )
Emmitt wrote: Tue Mar 23, 2021 4:40 pm ... At this rate, those pensions combined will be somewhere in the range of 130K per year before taxes.
When do you plan to retire? After those pensions kick in?
How much will it take to support your preferred lifestyle? If it's anywhere near "130K before taxes," you seem to be driving very fast, but maybe you don't need to.
Sahara
Posts: 603
Joined: Tue Dec 04, 2018 5:21 pm

Re: Portfolio Advice Please! - First Time Poster

Post by Sahara »

As the thread went into the second page I missed the recent allocation post. I can't do much portfolio related without a spreadsheet, so I've popped the numbers as I recall them into my template. This is how I envision your portfolio.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

Right now, as suggested by retire2022, I would get the bonds out of the Roth. That puts you at 4% bonds as illustrated on the spreadsheet. I would use contributions to get to your desired 15% bonds, then shift the contributions to maintain your desired AA. This will only take a year or two and I don't believe it exposes you to major risk.

The contributions illustrated here are 85/15, so they do not reflect the above suggestion just your desired AA. Make a copy and play around with the numbers as you finalize your plan.

I also agree with Vanbogle. At some point you will want to project your earnings and investments through age 55, then pension and social security and RMDs. For now, it sounds like you may have some plans to marry and that will change a lot of the projections. I like the idea to contribute 50% pre tax and 50% Roth at this point since you are expecting a pension and social security. You are unlikely to have the opportunity to withdraw your tax deferred money in a lower tax bracket.
volleyballer
Posts: 17
Joined: Fri Jul 02, 2021 10:22 am

Re: Portfolio Advice Please! - First Time Poster

Post by volleyballer »

Emmitt wrote: Tue Apr 13, 2021 9:04 pm My list of current 403b options are as follows:
Ameriprise Financial/RiverSource
Equitable (formerly AXA)
Invesco OppenheimerFunds
PenServ SmartSAV (formerly Foresters)
Sgroi Financial LLC
The Legend Group, A Lincoln Investment Company
Voya Financial (Natl NY)

I've tried to do some research and it seems like Invesco might be the best of the bad options. I've found that there is a $30 annual fee, but I can't find many ERs on the funds, and I'm not sure, but I don't believe it's an annuity product.
Hello Emmitt, I came across this thread and noticed your 403b provider choices are almost identical to what my wife's school district offers (in other words, pretty lousy). Did you end up choosing one of these providers?

My wife and I currently max out her 457, my 401k, and our Roth IRA's. We may have the fortunate ability to start adding to the 403b bucket in the next couple years, and I am trying to find the best low cost self directed plan and/or lobby for better choices to be added. Omni P3 used to have Vanguard and Fidelity in my wife's district, but they are on the grandfathered list and cannot accept new applications.

Here is what I have found so far:
Planmember:
https://pdfs.planmember.com/PDFs/Accoun ... 202022.pdf
$50/yr + 0.35% for Participant Choice
Has VTSAX @ 0.04%

PenServ SmartSAV:
Recordkeeping: $50/yr
Asset Management: 0.3%/yr
Financial Professional Servicing: 0.95%/yr
I got this info from a PenServ customer service rep. I'm not sure if I can opt out of the professional servicing and/or the asset management fees - I have an email out to them to find out.
Has VTSAX @ 0.04%
ETA - you can opt out of the professional servicing, but the 0.3% asset management fee still applies for self directed accounts.

Lincoln - at least in my district, we cannot access the "Participant Directed Platform" that I have seen talked about here, so would have to go through an adviser and pay AUM fee. I didn't really discuss further or get details.

Voya - variable annuity, so I didn't go much further. Fees seemed well over 1% AUM so I didn't go far with that.

Invesco - I found their info on 403b compare. They charge a flat fee of $30/yr, which sounds great at first. Then when you look up the funds, the funds themselves have very high fees. For example, their "Invesco S&P 500 Index A" is 0.54% plus a 5.5% front end load, which seems absurd.

Thanks!
Last edited by volleyballer on Wed Dec 22, 2021 11:02 pm, edited 1 time in total.
krow36
Posts: 2470
Joined: Fri Jan 30, 2015 5:05 pm
Location: WA

Re: Portfolio Advice Please! - First Time Poster

Post by krow36 »

volleyballer wrote: Wed Dec 22, 2021 10:39 pm PenServ SmartSAV:
Recordkeeping: $50/yr
Asset Management: 0.3%/yr
Financial Professional Servicing: 0.95%/yr
I got this info from a PenServ customer service rep. I'm not sure if I can opt out of the professional servicing and/or the asset management fees - I have an email out to them to find out.
Has VTSAX @ 0.04%
ETA - you can opt out of the professional servicing, but the 0.3% asset management fee still applies for self directed accounts.
Nice work volleyballer! PenServ SmartSAV is a much lower-cost 403b vendor than AXA.Emmitt, I think you should seriously consider making a contract exchange. It involves considerable paperwork but a fee difference of AXA's minimum fee of 1.75% vs PenServe's minimum fee of 0.34% is worth the hassle I think. After the PenServe account is up and running, you can stop contributions to the AXA account and call the AXA 800 help # and ask for your surrender fee. Also ask what it would be if you waited another year or 2? The fee is 5% of the contributions (not growth) made during the current and previous 5 contract years. It’s waived if:
1. You signed the contract 12 years ago.
2. You signed the contract 5 years ago and are age 59.5.
3. You signed the contract 5 years ago, are age 55 and are separated from service.
After you know your surrender fee, you can decide if you want to bite the bullet, or wait a year or more. Many posters decide to get out ASAP.
volleyballer
Posts: 17
Joined: Fri Jul 02, 2021 10:22 am

Re: Portfolio Advice Please! - First Time Poster

Post by volleyballer »

Thanks for the reply, krow36.

My next steps for my wife's 403b are to see if I can get some better options added to the plan - 0.3% for a self directed plan is still too high imo, especially when Vanguard charges that much for their Personal Advisor service. I have another year before we would be able to contribute anyways.

I called Legend group to inquire about Lincoln Participant Directed Platform, they didn't know anything about it. I have a call out to the Lincoln main office to see if they can somehow get us into the PDP.

If that fails, I plan to send an email or letter to the administrator in the district that would be responsible for the 403b plans. I am also acquainted with the head of the teacher's union so I can get their input as well before sending the letter off. Ideally I would get Vanguard reinstated on Omni, but I would also be very happy with Lincoln PDP or Security Benefit NEA Direct Invest.

If I were to sign up with Planmember or PenServ in the short term, and then later on get a better option added to the plan menu, do you know if I can transfer money within 403b providers while still in service?
krow36
Posts: 2470
Joined: Fri Jan 30, 2015 5:05 pm
Location: WA

Re: Portfolio Advice Please! - First Time Poster

Post by krow36 »

Yes, you are allowed to do a "contract exchange" between the vendors listed on the district's vendor list. Good luck with your efforts to get Vanguard, Fidelity or Aspire added to the 403b vendor list.
Post Reply