Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

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Barto10
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Joined: Fri Jul 30, 2021 2:30 pm

Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

Updated August 3rd with asked/suggested info. Answers are in italics


Hello,

First time post here, and want to thank in advance for the generous knowledge and advice. I plan to post a full profile of my investments and portfolio based on the template suggested, however am seeking some advice as a novice and having made some stupid money mistakes along with some decent ones (live and learn!).
Basic info: I’m a 41 year old teacher in Virginia, spouse is a 40 year old teacher. Both contributing to Virginia Retirement system, we both worked for 5 years in another state (MA) where we did NOT contribute to Social Security there based on state arrangement. When we left Massachusetts we decided to roll over those pension funds into Vanguard IRA’s. We also have 403B accounts with AXA/Equitable.

What is your tax bracket, both federal and state?
federal (22%) and state (5.75%)

How much (in dollars) do you currently contribute annually to each account?
Please see below

Does the 403b plan permit Roth contributions?
Unsure, researching into this

Will you be eligible for both pensions and Social Security benefits
Yes for pension, formula is based on years of service and age, will have to see if stay until 60+ in this system but doubtful.

Does your employer also offer a 457b plan?
Yes

Are you eligible to contribute to Roth IRAs? IRS, "Amount of Roth IRA Contributions That You Can Make For 2021", link.
Yes, up to 6000 for each of us


My questions are:
1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
2) Whether to keep 403B with AXA/Equitable, or roll into one of the other 403B providers (employer only offers 4, best of which appears to be fidelity)?
3) Should we start Roth IRA’s?

INVESTMENTS
*My Vanguard IRA ~ 77K- new/annual contributions= 0
My AXA/Equitable 403B~ 40K- new/annual contributions=$4800 annually
My Principal Supplementary retirement account ~ 8K= New/annual contributions= $1300 annually
My Virginia VRS Retirement account- Pension fund, 10 years of service, balance about 40K- New/annual contributions ~ 4200 (mandatory calculated by percentage of salary)


*Spouse’s Vanguard IRA- 24.5K- new/annual contributions=0
Spouse’s AXA/Equitable 403B ~ 14K- new/annual contributions=0
Spouse’s Principal Supplementary retirement account ~ 4.5K- new/annual contributions=$1300
Spouse’s Virginia VRS Retirement account- Pension fund, 8 years of service, balance about 24K- new/annual contributions=$4200

DEBTS:
Home mortgage=360K at 3.5% vs. home value= 550K
Some student loan debt= 40K at 1.5% average interest rate
Car loan= 15K at 4.25%
Personal loan= of 16K 6.5%

OTHER:
No kids yet, planning and hoping for at least one asap

*Vanguard IRA’s---So I made some stupid mistakes with about 15-20k worth of our Traditional IRA’s during the tech and crypto boom late in 2020 early 2021. I got wide eyes and naively bought stock at top of market before significant drop on numerous stocks. The rest of my portfolio is mostly in safer/smarter plays like VFIAX, VIGAX, Vanguard target 2045, Gold stock, Gold miners, and a few others (which have done well over several years).
So, my dilemma is on all of the losses below of mostly tech, crypto, small cap stuff from being stupid this year: Should I hold? Or sell and move those funds back into bogglehead funds (the 3 funds)? Just not sure if and when to take the losses and don't want to lose opportunity of growth if some of these stocks stay down or worsen. Any advice and feedback is welcomed. I for sure have learned my lesson to not think I’m smart enough to pick stocks and play the market…all future contributions are indexes and likely the 3 fund portfolio. Help me out on the losers though! Thank you!

ABML- AMERICAN BATTERY METALS CORP NV= $803 (Losses =302)
AG- FIRST MAJESTIC SILVER = $1206 (Losses= $754)
ALPP- ALPINE 4 HOLDINGS INC CL A= $1367 (Losses=$1234)
ARKK- ARK INNOVATION ETF= 2760 (Losses= $648)
ETHE- GRAYSCALE ETHERIUM TRUST= $515 (Losses= $300)
GBTC- GRAYSCALE BITCOIN TRUST= $3091 (Gains +$588)
GDX- VANECK VECTORS GOLD MINERS= $2890= Gains +$1226)
GFI- GOLD FIELDS= $5608 (Gains= +$2933)
GILT- GILAT SATELLITE NETWORKS LTD NEW= $1781 (Losses= $1496)
GOLD- BARRICK GOLD= $3266 (Gains= +$1178)
HVBT- HIVE BLOCKCHAIN= $4237 (Losses= $4065)
LCID- LUCID GROUP= $3178 (Losses= $2190)
NIO- NIO INC ADS REPSTG CL A ORD SHS= $2904 (Losses=$693)
PLUG- PLUG POWER INC NEW= $572 (Losses =$860)
PACB- PACIFIC BIOSCIENCES CA INC= $900 (Losses= $69)
PSLV- SPROTT PHYSICAL SILVER TRUST= $738 (Losses= $126)
SBUX- STARBUCKS CORP= $2412 (Gains= +$1216)
SKLZ- SKILLZ INC CL A= $535 (Losses= $545)
SPWR- SUNPOWER CORP= $594 (Losses= $398)
SUNW- SUNWORKS INC NEW= $449 (Losses= $491)
TSM- TAIWAN SEMICONDUCTOR = $821 (Losses=$92)
VFIAX- Vanguard 500 Index Admiral Shares= $36930 (Gains= +$19295)
VIGAX- Vanguard Growth Index Admiral Shares= $12362 (Gains= +$7900)
VTIVX- Vanguard Target Retirement 2045 Fund= $6800 (Gains= +$1900)
VWUSX- Vanguard U.S. Growth Fund Investor Shares= $4400 (Gains=+$400)

Who are the other providers available in the 403b plan?
403B Providers:
AIG/VALIC
AXA/Equitable
Fidelity Investments
Metropolitan Life Insurance company
Reliastar Life- Subsidiary of Voya
USAA Mutual Funds
Voya Financial

457B:
AIG Retirement Services (VALIC)
AXA/Equitable
Fidelity Investments
Metropolitan Life Insurance company
Reliastar Life- Subsidiary of Voya
Voya Financial

Fidelity offers what appears to be lowest expenses and some of the indexes I am strongly considering—Fidelity Total Market Index FSKAX (expense ratio .015%)
Last edited by Barto10 on Tue Aug 03, 2021 6:31 pm, edited 2 times in total.
delamer
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Joined: Tue Feb 08, 2011 5:13 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by delamer »

Given that these are all held with retirement accounts, there are no tax consequences to selling.

So sell what you don’t want to keep long term, and reinvest in your index funds.

Basically, if you wouldn’t buy it today then sell it.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
harikaried
Posts: 2613
Joined: Fri Mar 09, 2012 2:47 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by harikaried »

Barto10 wrote: Fri Jul 30, 2021 4:50 pmHelp me out on the losers though!
Why not also the "winners?" Did you pick them the same way as the "losers?" If you really wanted to simplify, you could just consolidate everything in the IRA to Vanguard Target Retirement 2045 (VTIVX), which currently is 90% stocks / 10% bonds. It does include international, which may be desired based at your individual stock picks.
Barto10 wrote: Fri Jul 30, 2021 4:50 pm Home mortgage= 360K vs. home value= 550K
Some student loan debt, one car loan of 15K, personal loan of 16K
What's the interest rates? Might be worthwhile to pay some down/off although you didn't seem to indicate any cash/checking/taxable balance.
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retired@50
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Location: Living in the U.S.A.

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by retired@50 »

Barto10 wrote: Fri Jul 30, 2021 4:50 pm My questions are:
1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
3) Should we start Roth IRA’s?


ABML- AMERICAN BATTERY METALS CORP NV= $803 (Losses =302)
AG- FIRST MAJESTIC SILVER = $1206 (Losses= $754)
ALPP- ALPINE 4 HOLDINGS INC CL A= $1367 (Losses=$1234)
ARKK- ARK INNOVATION ETF= 2760 (Losses= $648)
ETHE- GRAYSCALE ETHERIUM TRUST= $515 (Losses= $300)
GBTC- GRAYSCALE BITCOIN TRUST= $3091 (Gains +$588)
GDX- VANECK VECTORS GOLD MINERS= $2890= Gains +$1226)
GFI- GOLD FIELDS= $5608 (Gains= +$2933)
GILT- GILAT SATELLITE NETWORKS LTD NEW= $1781 (Losses= $1496)
GOLD- BARRICK GOLD= $3266 (Gains= +$1178)
HVBT- HIVE BLOCKCHAIN= $4237 (Losses= $4065)
LCID- LUCID GROUP= $3178 (Losses= $2190)
NIO- NIO INC ADS REPSTG CL A ORD SHS= $2904 (Losses=$693)
PLUG- PLUG POWER INC NEW= $572 (Losses =$860)
PACB- PACIFIC BIOSCIENCES CA INC= $900 (Losses= $69)
PSLV- SPROTT PHYSICAL SILVER TRUST= $738 (Losses= $126)
SBUX- STARBUCKS CORP= $2412 (Gains= +$1216)
SKLZ- SKILLZ INC CL A= $535 (Losses= $545)
SPWR- SUNPOWER CORP= $594 (Losses= $398)
SUNW- SUNWORKS INC NEW= $449 (Losses= $491)
TSM- TAIWAN SEMICONDUCTOR = $821 (Losses=$92)
VFIAX- Vanguard 500 Index Admiral Shares= $36930 (Gains= +$19295)
VIGAX- Vanguard Growth Index Admiral Shares= $12362 (Gains= +$7900)

VTIVX- Vanguard Target Retirement 2045 Fund= $6800 (Gains= +$1900)
VWUSX- Vanguard U.S. Growth Fund Investor Shares= $4400 (Gains=+$400)
My advice would be to sell the red ones, and buy the green one.

Yes, to the Roth IRA, especially if you can save enough to max out the workplace account.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Woodshark
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Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Woodshark »

I'm married to a retired teacher so my advice is,

1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
You both are teachers, not Wall St. analysts. It's time to simplify. Sell everything (both winners an losers) that's not a index or target retirement fund and invest it in a stock index or target retirement fund like VTIVX or VFIAX. Since they are in retirement accounts, it's a non taxable event.

2) Whether to keep 403B with AXA/Equitable, or roll into one of the other 403B providers
What are your choices there? You might want to do a little research. I don't know anything about AXA/Equitable but I do hear good things about Fidelity. You might want to explore your options.

3) Should we start Roth IRA’s?
I would. I wish I had started ours much earlier.
magicman
Posts: 42
Joined: Thu Jan 21, 2016 12:44 am

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by magicman »

retired@50 wrote: Fri Jul 30, 2021 5:38 pm
Barto10 wrote: Fri Jul 30, 2021 4:50 pm My questions are:
1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
3) Should we start Roth IRA’s?


ABML- AMERICAN BATTERY METALS CORP NV= $803 (Losses =302)
AG- FIRST MAJESTIC SILVER = $1206 (Losses= $754)
ALPP- ALPINE 4 HOLDINGS INC CL A= $1367 (Losses=$1234)
ARKK- ARK INNOVATION ETF= 2760 (Losses= $648)
ETHE- GRAYSCALE ETHERIUM TRUST= $515 (Losses= $300)
GBTC- GRAYSCALE BITCOIN TRUST= $3091 (Gains +$588)
GDX- VANECK VECTORS GOLD MINERS= $2890= Gains +$1226)
GFI- GOLD FIELDS= $5608 (Gains= +$2933)
GILT- GILAT SATELLITE NETWORKS LTD NEW= $1781 (Losses= $1496)
GOLD- BARRICK GOLD= $3266 (Gains= +$1178)
HVBT- HIVE BLOCKCHAIN= $4237 (Losses= $4065)
LCID- LUCID GROUP= $3178 (Losses= $2190)
NIO- NIO INC ADS REPSTG CL A ORD SHS= $2904 (Losses=$693)
PLUG- PLUG POWER INC NEW= $572 (Losses =$860)
PACB- PACIFIC BIOSCIENCES CA INC= $900 (Losses= $69)
PSLV- SPROTT PHYSICAL SILVER TRUST= $738 (Losses= $126)
SBUX- STARBUCKS CORP= $2412 (Gains= +$1216)
SKLZ- SKILLZ INC CL A= $535 (Losses= $545)
SPWR- SUNPOWER CORP= $594 (Losses= $398)
SUNW- SUNWORKS INC NEW= $449 (Losses= $491)
TSM- TAIWAN SEMICONDUCTOR = $821 (Losses=$92)
VFIAX- Vanguard 500 Index Admiral Shares= $36930 (Gains= +$19295)
VIGAX- Vanguard Growth Index Admiral Shares= $12362 (Gains= +$7900)

VTIVX- Vanguard Target Retirement 2045 Fund= $6800 (Gains= +$1900)
VWUSX- Vanguard U.S. Growth Fund Investor Shares= $4400 (Gains=+$400)
My advice would be to sell the red ones, and buy the green one.

Yes, to the Roth IRA, especially if you can save enough to max out the workplace account.

Regards,
I agree, put everything into the Target Retirement 2045 fund. Yes open a Roth IRA, contribute a reasonable amount and focus on paying off your car loan and personal loan.
Oldaroo3
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Joined: Tue Feb 16, 2021 7:09 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Oldaroo3 »

My suggestion would be to get away from AXA. That is what we did. Didn't know any better when we first started with them. They come into school and act like they are your best friend. At least it got us saving for retirement. Still took several years to finally pull the trigger. Lots of second guessing myself, but I finally got tired of paying for the rep's BMW.

All the research I could find online stated that AXA had excessive fees. Probably in the 2% range. I found it difficult to actually figure out how much we were paying yearly. What finally convinced me was looking at Vanguard fees and seeing that I could get an S and P 500 fund for peanuts compared to the more than 1% being charged by AXA.

I see you do not have Vanguard as an option, but folks around here seem to like Fidelity. You should be able to do a transfer (I think that's what they call it.) over to Fidelity from AXA. AXA requires lots of paperwork as I recall. It is a process to be sure. I think it took several months to finally get it all done, but it was worth it. You will probably have a surrender fee if you have not been with AXA for their required amount of time. You have several options that I can think of:

1. Leave the money at AXA for now, stop contributions. Open a 403(b) at Fidelity and start contributions. Keep this up until there are no more surrender fees. I think it like 7 or 10 years. You will still be paying fees to AXA during that time.

2. Suck up the surrender fees and just move the money to Fidelity.

3. I believe you can move 10% per year to another provider with no surrender fees.

I don't recall seeing how long you have been with AXA, so the above may be moot.

One thing I will add is that while at AXA we had a guaranteed interest fund of 3%. When I was working on extricating ourselves from AXA, the phone rep mentioned something about allowing us to stay in the guaranteed 3% fund with no fees. I assumed he was just using whatever methods he could to try to get us to stay and I did not take the bait. I was anxious to get out. Looking back, it may not have been the best move. That may have been a good place to park some money as the bond portion of our portfolio. If you are in this or can get it with low/no fees it may be worth looking into. Not sure though.

Good luck.
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Clark & Addison
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Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Clark & Addison »

Definitely want to get out of Equitable/AXA. If Fidelity (not American Fidelity) is one of your approved 403b vendors, that will most likely be your best bet. Here's a link on information on how to get out of Equitable/AXA https://403bwise.org/blog/entry/blog-guest-post-axa If you haven't visited www.403bwise.org I highly recommend it for more information on 403b plans. There is a 403bwise Facebook group that is also worth joining.
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ruralavalon
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Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by ruralavalon »

Barto10 wrote: Fri Jul 30, 2021 4:50 pmHome mortgage= 360K vs. home value= 550K
Some student loan debt, one car loan of 15K, personal loan of 16K
How much student debt?

What is the interest rate on each debt?


Barto10 wrote: Fri Jul 30, 2021 4:50 pm My questions are:
1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
There are no tax consequences to making changes in the Vanguard IRAs.

I suggest switching everything to very diversified index funds (to decrease risk) with very low expense ratios (to increase your net returns), examples are:
2) Vanguard Total Stock Market Index Fund (VTSAX)ER 0.04%;
2) Vanguard Total International Stock Index Fund (VTIAX) ER 0.11%; and
3) Vanguard Total Bond Market Index Fund (VBTLX)ER 0.05%.



Barto10 wrote: Fri Jul 30, 2021 4:50 pm2) Whether to keep 403B with AXA/Equitable, or roll into one of the other 403B providers (employer only offers 4, best of which appears to be fidelity)?
Do not keep AXA Equitable.

Who are the other providers available in the 403b plan?

Which provider offers the funds with the lowest expenses?

Switch to the provider offering the funds with the lowest expenses.


Barto10 wrote: Fri Jul 30, 2021 4:50 pm3) Should we start Roth IRA’s?
What is your tax bracket, both federal and state?

How much (in dollars) do you currently contribute annually to each account?

Does the 403b plan permit Roth contributions?

Will you be eligible for both pensions and Social Security benefits?

Does your employer also offer a 457b plan?


Are you eligible to contribute to Roth IRAs? IRS, "Amount of Roth IRA Contributions That You Can Make For 2021", link.


Please simply add any new information to your original post using the edit button (the pencil icon near the upper right corner of your post) it helps a lot if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
Barto10
Posts: 15
Joined: Fri Jul 30, 2021 2:30 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

Thank you to all for the feedback and honest assessment. I have updated my original post to add more detail/answers. I am appreciative that while my situation is modest and that I've been humbled with some poor moves (and lack thereof with wise planning), there's good resources here to change course and set for a healthier financial future.

It sounds like moving on from many of these stocks is warranted, and I will do so. A few of them I may hold for a limited time to see if they rise so I can recoup some, but indexes will be selected from here. It also sounds like moving along from my current 403 provider is warranted due to fees. I am in the guaranteed fixed interest plan with about 7K of my 403B portfolio, which is a nice fund, but I don't think it makes up for higher expense ratios elsewhere in the 403B portfolio enough to keep me with this provider.

Additional input is welcomed on my original 3 questions, and anything else to consider! Thank you!
Topic Author
Barto10
Posts: 15
Joined: Fri Jul 30, 2021 2:30 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

Thanks ruralavalon, I updated above and appreciate your and other's input!
ruralavalon wrote: Sat Jul 31, 2021 9:54 am
Barto10 wrote: Fri Jul 30, 2021 4:50 pmHome mortgage= 360K vs. home value= 550K
Some student loan debt, one car loan of 15K, personal loan of 16K
How much student debt?

What is the interest rate on each debt?


Barto10 wrote: Fri Jul 30, 2021 4:50 pm My questions are:
1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
There are no tax consequences to making changes in the Vanguard IRAs.

I suggest switching everything to very diversified index funds (to decrease risk) with very low expense ratios (to increase your net returns), examples are:
2) Vanguard Total Stock Market Index Fund (VTSAX)ER 0.04%;
2) Vanguard Total International Stock Index Fund (VTIAX) ER 0.11%; and
3) Vanguard Total Bond Market Index Fund (VBTLX)ER 0.05%.



Barto10 wrote: Fri Jul 30, 2021 4:50 pm2) Whether to keep 403B with AXA/Equitable, or roll into one of the other 403B providers (employer only offers 4, best of which appears to be fidelity)?
Do not keep AXA Equitable.

Who are the other providers available in the 403b plan?

Which provider offers the funds with the lowest expenses?

Switch to the provider offering the funds with the lowest expenses.


Barto10 wrote: Fri Jul 30, 2021 4:50 pm3) Should we start Roth IRA’s?
What is your tax bracket, both federal and state?

How much (in dollars) do you currently contribute annually to each account?

Does the 403b plan permit Roth contributions?

Will you be eligible for both pensions and Social Security benefits?

Does your employer also offer a 457b plan?


Are you eligible to contribute to Roth IRAs? IRS, "Amount of Roth IRA Contributions That You Can Make For 2021", link.


Please simply add any new information to your original post using the edit button (the pencil icon near the upper right corner of your post) it helps a lot if all of your information is in one place.
02nz
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Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by 02nz »

Pay off personal and car loan ASAP.

Refinance mortgage, you should be able to get better than 3.5% now. Lowest-risk way is to do a no-cost refi, where you get a lender credit (negative points, basically) to cover closing costs. As long as the rate is lower than your current rate, you come out ahead right away, no "break-even" period.

A cash-out refi can make sense for paying off the personal and car loans, but make sure it's not going to enable getting more of these kinds of debts.
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ruralavalon
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Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by ruralavalon »

Debt.
Barto10 wrote: Fri Jul 30, 2021 4:50 pmHome mortgage=360K at 3.5% vs. home value= 550K
Some student loan debt= 40K at 1.5% average interest rate
Car loan= 15K at 4.25%
Personal loan= of 16K 6.5%
You can probably get a better interest on your mortgage.

Look into refinancing your mortgage for a lower interest rate.

Pay off the $16k personal loan at 6.5% and the $15k car loan at 4.25%. Paying off the 6.5% interest debt should be a top priority. Wiki article "Prioritizing Investments", link.

What is the interest rate currently being paid on the $40k student debt?


Employer plans.
I suggest switching providers in the 403b plan from AXA Equitable to Fidelity. I suggest increasing contributions to the 403b accounts from the current $4.8k annually. The maximum annual employee contribution is $19.5k each.

Does Fidelity offer these three funds in your 403b plan?
1) Fidelity Total Market Index Fund (FSKAX) ER 0.015%;
2) Fidelity Total International Index Fund (FTIHX) ER 0.06%; and
3) Fidelity U.S. Bond Index Fund (FXNAX) ER 0.025%.

If so then I suggest that you use those funds.

What is the "Principal Supplementary retirement" plan? Is that a 457b plan?


IRAs at Vanguard.
In your IRAs at Vanguard I suggest switching everything to very diversified index funds (to decrease risk) with very low expense ratios (to increase your net returns), examples are:
1) Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%;
2) Vanguard Total International Stock Index Fund (VTIAX) ER 0.11%; and
3) Vanguard Total Bond Market Index Fund (VBTLX) ER 0.05%.



Traditional versus Roth.
Barto10 wrote: Fri Jul 30, 2021 4:50 pmWhat is your tax bracket, both federal and state?
federal (22%) and state (5.75%)
. . . . .
Will you be eligible for both pensions and Social Security benefits
Yes for pension, formula is based on years of service and age, will have to see if stay until 60+ in this system but doubtful.
If doubtful that you will receive a pension in addition to Social Security benefits, then maximum annual employee contributions to the 403bs are likely better than Roth IRA contributions. It looks like you currently have just $78k in traditional tax-deferred accounts.


Asset allocation.
What is the asset allocation (the overall stock/bond mix, and domestic/international stock mix) that you want to aim for?
Last edited by ruralavalon on Tue Aug 03, 2021 7:49 pm, edited 6 times in total.
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retired@50
Posts: 12709
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by retired@50 »

Barto10 wrote: Tue Aug 03, 2021 6:25 pm It sounds like moving on from many of these stocks is warranted, and I will do so. A few of them I may hold for a limited time to see if they rise so I can recoup some, but indexes will be selected from here.
See the wiki on behavioral pitfalls. Your desire to "recoup" sounds a heck of a lot like anchoring.

Link: https://www.bogleheads.org/wiki/Behavioral_pitfalls

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Topic Author
Barto10
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Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

Thank you for the feedback, yes, already started purging some stocks to get into the index funds.
delamer wrote: Fri Jul 30, 2021 5:16 pm Given that these are all held with retirement accounts, there are no tax consequences to selling.

So sell what you don’t want to keep long term, and reinvest in your index funds.

Basically, if you wouldn’t buy it today then sell it.
Topic Author
Barto10
Posts: 15
Joined: Fri Jul 30, 2021 2:30 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

Thank you magicman for the comments. Yes, you confirmed what many others suggested in selling these stocks/funds and moving into the index(s).
We don't contribute a large amount to the 403B's, but are working on consolidating to a provider that is low fee and will try to accellerate contributions. Also, I believe we will be starting Roth IRA's soon. Will have to decide whether a Roth Conversion from these Traditional IRA"s is best, or to just start Roth IRA's and slowly contribute each pay period.
magicman wrote: Fri Jul 30, 2021 6:50 pm
retired@50 wrote: Fri Jul 30, 2021 5:38 pm
Barto10 wrote: Fri Jul 30, 2021 4:50 pm My questions are:
1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
3) Should we start Roth IRA’s?


ABML- AMERICAN BATTERY METALS CORP NV= $803 (Losses =302)
AG- FIRST MAJESTIC SILVER = $1206 (Losses= $754)
ALPP- ALPINE 4 HOLDINGS INC CL A= $1367 (Losses=$1234)
ARKK- ARK INNOVATION ETF= 2760 (Losses= $648)
ETHE- GRAYSCALE ETHERIUM TRUST= $515 (Losses= $300)
GBTC- GRAYSCALE BITCOIN TRUST= $3091 (Gains +$588)
GDX- VANECK VECTORS GOLD MINERS= $2890= Gains +$1226)
GFI- GOLD FIELDS= $5608 (Gains= +$2933)
GILT- GILAT SATELLITE NETWORKS LTD NEW= $1781 (Losses= $1496)
GOLD- BARRICK GOLD= $3266 (Gains= +$1178)
HVBT- HIVE BLOCKCHAIN= $4237 (Losses= $4065)
LCID- LUCID GROUP= $3178 (Losses= $2190)
NIO- NIO INC ADS REPSTG CL A ORD SHS= $2904 (Losses=$693)
PLUG- PLUG POWER INC NEW= $572 (Losses =$860)
PACB- PACIFIC BIOSCIENCES CA INC= $900 (Losses= $69)
PSLV- SPROTT PHYSICAL SILVER TRUST= $738 (Losses= $126)
SBUX- STARBUCKS CORP= $2412 (Gains= +$1216)
SKLZ- SKILLZ INC CL A= $535 (Losses= $545)
SPWR- SUNPOWER CORP= $594 (Losses= $398)
SUNW- SUNWORKS INC NEW= $449 (Losses= $491)
TSM- TAIWAN SEMICONDUCTOR = $821 (Losses=$92)
VFIAX- Vanguard 500 Index Admiral Shares= $36930 (Gains= +$19295)
VIGAX- Vanguard Growth Index Admiral Shares= $12362 (Gains= +$7900)

VTIVX- Vanguard Target Retirement 2045 Fund= $6800 (Gains= +$1900)
VWUSX- Vanguard U.S. Growth Fund Investor Shares= $4400 (Gains=+$400)
My advice would be to sell the red ones, and buy the green one.

Yes, to the Roth IRA, especially if you can save enough to max out the workplace account.

Regards,
I agree, put everything into the Target Retirement 2045 fund. Yes open a Roth IRA, contribute a reasonable amount and focus on paying off your car loan and personal loan.
Topic Author
Barto10
Posts: 15
Joined: Fri Jul 30, 2021 2:30 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

Thank you harikaried, I updated my original post with the debt amounts and interest rates, and are trying to chop away at these debts while accelerating investment contributions. Our cash/emergency fund amount is ~15k. Appreciate you and the BH community for the solid input!
harikaried wrote: Fri Jul 30, 2021 5:36 pm
Barto10 wrote: Fri Jul 30, 2021 4:50 pmHelp me out on the losers though!
Why not also the "winners?" Did you pick them the same way as the "losers?" If you really wanted to simplify, you could just consolidate everything in the IRA to Vanguard Target Retirement 2045 (VTIVX), which currently is 90% stocks / 10% bonds. It does include international, which may be desired based at your individual stock picks.
Barto10 wrote: Fri Jul 30, 2021 4:50 pm Home mortgage= 360K vs. home value= 550K
Some student loan debt, one car loan of 15K, personal loan of 16K
What's the interest rates? Might be worthwhile to pay some down/off although you didn't seem to indicate any cash/checking/taxable balance.
Topic Author
Barto10
Posts: 15
Joined: Fri Jul 30, 2021 2:30 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

02nz, thank you! We refinanced to 30year in early 2020, then missed the super low interest rate period and preoccupied with other matters in early 2021 before rates moved up. Now that they're back down, we are reconsidering and will also check on the no-cost refi and cash-out option. Relucant to reset the clock again to 30year, but if we could accelerate payments or even get to 20year or 25year refi, that could be ideal. Another hope is maybe our current lender could do a rate modification if we indicate that we're refinancing?
02nz wrote: Tue Aug 03, 2021 6:34 pm Pay off personal and car loan ASAP.

Refinance mortgage, you should be able to get better than 3.5% now. Lowest-risk way is to do a no-cost refi, where you get a lender credit (negative points, basically) to cover closing costs. As long as the rate is lower than your current rate, you come out ahead right away, no "break-even" period.

A cash-out refi can make sense for paying off the personal and car loans, but make sure it's not going to enable getting more of these kinds of debts.
Topic Author
Barto10
Posts: 15
Joined: Fri Jul 30, 2021 2:30 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

You are speaking the truth! I read over the behavior pitfalls and these are good to check myself on, as I (and I'm sure many others) let emotions and behavior patterns dictate irrational investing.
retired@50 wrote: Tue Aug 03, 2021 7:37 pm
Barto10 wrote: Tue Aug 03, 2021 6:25 pm It sounds like moving on from many of these stocks is warranted, and I will do so. A few of them I may hold for a limited time to see if they rise so I can recoup some, but indexes will be selected from here.
See the wiki on behavioral pitfalls. Your desire to "recoup" sounds a heck of a lot like anchoring.

Link: https://www.bogleheads.org/wiki/Behavioral_pitfalls

Regards,
Topic Author
Barto10
Posts: 15
Joined: Fri Jul 30, 2021 2:30 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by Barto10 »

Original poster here,

Some have asked about whether my and my spouse's employer offers 457B. Yes, our employers do offer them (Fidelity is one of the providers). Question:
1) Should we opt for 457B contributions over 403B contributions going forward (we are not close to max contributions to the 403B's but intend to up those significantly)?
2) We are transferring 403B's from old employers into Fidelity 403B's, is it possible to move from 403B into 457B with these funds, and would this be wise?
Barto10 wrote: Fri Jul 30, 2021 4:50 pm Updated August 3rd with asked/suggested info. Answers are in italics


Hello,

First time post here, and want to thank in advance for the generous knowledge and advice. I plan to post a full profile of my investments and portfolio based on the template suggested, however am seeking some advice as a novice and having made some stupid money mistakes along with some decent ones (live and learn!).
Basic info: I’m a 41 year old teacher in Virginia, spouse is a 40 year old teacher. Both contributing to Virginia Retirement system, we both worked for 5 years in another state (MA) where we did NOT contribute to Social Security there based on state arrangement. When we left Massachusetts we decided to roll over those pension funds into Vanguard IRA’s. We also have 403B accounts with AXA/Equitable.

What is your tax bracket, both federal and state?
federal (22%) and state (5.75%)

How much (in dollars) do you currently contribute annually to each account?
Please see below

Does the 403b plan permit Roth contributions?
Unsure, researching into this

Will you be eligible for both pensions and Social Security benefits
Yes for pension, formula is based on years of service and age, will have to see if stay until 60+ in this system but doubtful.

Does your employer also offer a 457b plan?
Yes

Are you eligible to contribute to Roth IRAs? IRS, "Amount of Roth IRA Contributions That You Can Make For 2021", link.
Yes, up to 6000 for each of us


My questions are:
1) What to do with Vanguard IRA’s which I made poor choices "gambling" on some speculative stocks this past year…so what to sell, what to hold, etc?
2) Whether to keep 403B with AXA/Equitable, or roll into one of the other 403B providers (employer only offers 4, best of which appears to be fidelity)?
3) Should we start Roth IRA’s?

INVESTMENTS
*My Vanguard IRA ~ 77K- new/annual contributions= 0
My AXA/Equitable 403B~ 40K- new/annual contributions=$4800 annually
My Principal Supplementary retirement account ~ 8K= New/annual contributions= $1300 annually
My Virginia VRS Retirement account- Pension fund, 10 years of service, balance about 40K- New/annual contributions ~ 4200 (mandatory calculated by percentage of salary)


*Spouse’s Vanguard IRA- 24.5K- new/annual contributions=0
Spouse’s AXA/Equitable 403B ~ 14K- new/annual contributions=0
Spouse’s Principal Supplementary retirement account ~ 4.5K- new/annual contributions=$1300
Spouse’s Virginia VRS Retirement account- Pension fund, 8 years of service, balance about 24K- new/annual contributions=$4200

DEBTS:
Home mortgage=360K at 3.5% vs. home value= 550K
Some student loan debt= 40K at 1.5% average interest rate
Car loan= 15K at 4.25%
Personal loan= of 16K 6.5%

OTHER:
No kids yet, planning and hoping for at least one asap

*Vanguard IRA’s---So I made some stupid mistakes with about 15-20k worth of our Traditional IRA’s during the tech and crypto boom late in 2020 early 2021. I got wide eyes and naively bought stock at top of market before significant drop on numerous stocks. The rest of my portfolio is mostly in safer/smarter plays like VFIAX, VIGAX, Vanguard target 2045, Gold stock, Gold miners, and a few others (which have done well over several years).
So, my dilemma is on all of the losses below of mostly tech, crypto, small cap stuff from being stupid this year: Should I hold? Or sell and move those funds back into bogglehead funds (the 3 funds)? Just not sure if and when to take the losses and don't want to lose opportunity of growth if some of these stocks stay down or worsen. Any advice and feedback is welcomed. I for sure have learned my lesson to not think I’m smart enough to pick stocks and play the market…all future contributions are indexes and likely the 3 fund portfolio. Help me out on the losers though! Thank you!

ABML- AMERICAN BATTERY METALS CORP NV= $803 (Losses =302)
AG- FIRST MAJESTIC SILVER = $1206 (Losses= $754)
ALPP- ALPINE 4 HOLDINGS INC CL A= $1367 (Losses=$1234)
ARKK- ARK INNOVATION ETF= 2760 (Losses= $648)
ETHE- GRAYSCALE ETHERIUM TRUST= $515 (Losses= $300)
GBTC- GRAYSCALE BITCOIN TRUST= $3091 (Gains +$588)
GDX- VANECK VECTORS GOLD MINERS= $2890= Gains +$1226)
GFI- GOLD FIELDS= $5608 (Gains= +$2933)
GILT- GILAT SATELLITE NETWORKS LTD NEW= $1781 (Losses= $1496)
GOLD- BARRICK GOLD= $3266 (Gains= +$1178)
HVBT- HIVE BLOCKCHAIN= $4237 (Losses= $4065)
LCID- LUCID GROUP= $3178 (Losses= $2190)
NIO- NIO INC ADS REPSTG CL A ORD SHS= $2904 (Losses=$693)
PLUG- PLUG POWER INC NEW= $572 (Losses =$860)
PACB- PACIFIC BIOSCIENCES CA INC= $900 (Losses= $69)
PSLV- SPROTT PHYSICAL SILVER TRUST= $738 (Losses= $126)
SBUX- STARBUCKS CORP= $2412 (Gains= +$1216)
SKLZ- SKILLZ INC CL A= $535 (Losses= $545)
SPWR- SUNPOWER CORP= $594 (Losses= $398)
SUNW- SUNWORKS INC NEW= $449 (Losses= $491)
TSM- TAIWAN SEMICONDUCTOR = $821 (Losses=$92)
VFIAX- Vanguard 500 Index Admiral Shares= $36930 (Gains= +$19295)
VIGAX- Vanguard Growth Index Admiral Shares= $12362 (Gains= +$7900)
VTIVX- Vanguard Target Retirement 2045 Fund= $6800 (Gains= +$1900)
VWUSX- Vanguard U.S. Growth Fund Investor Shares= $4400 (Gains=+$400)

Who are the other providers available in the 403b plan?
403B Providers:
AIG/VALIC
AXA/Equitable
Fidelity Investments
Metropolitan Life Insurance company
Reliastar Life- Subsidiary of Voya
USAA Mutual Funds
Voya Financial

457B:
AIG Retirement Services (VALIC)
AXA/Equitable
Fidelity Investments
Metropolitan Life Insurance company
Reliastar Life- Subsidiary of Voya
Voya Financial

Fidelity offers what appears to be lowest expenses and some of the indexes I am strongly considering—Fidelity Total Market Index FSKAX (expense ratio .015%)
zie
Posts: 1080
Joined: Sun Mar 22, 2020 4:35 pm

Re: Portfolio mistakes- How to proceed for two teachers with IRA and 403B?

Post by zie »

Barto10 wrote: Fri Aug 06, 2021 11:50 am Original poster here,

Some have asked about whether my and my spouse's employer offers 457B. Yes, our employers do offer them (Fidelity is one of the providers). Question:
1) Should we opt for 457B contributions over 403B contributions going forward (we are not close to max contributions to the 403B's but intend to up those significantly)?
2) We are transferring 403B's from old employers into Fidelity 403B's, is it possible to move from 403B into 457B with these funds, and would this be wise?
1) Assuming you are employed by the Government, the 457B offers 1 extra feature over the 403B, the funds are available immediately after you separate from the employer, fee free. a 403B is fee free after you reach age 59.5. If you are not government, then the 457B has the feature, but has a downside, if the non-profit fails for some reason, you may or may not get the money you put into the 457B back. I.e. it's technically legal for the non-profit to use YOUR 457B money for their debts. As far as I know this is ridiculously rare, but it's a risk, and you should be aware of it.

All that said, most people prefer 457B's especially the Retire Early types.

2) I'd be surprised if you can move funds from a 403B -> 457B, but if you are fine with the 457B rules(see #1 above) and you can convince the people to let you, I don't see any harm in it. The reason I think it wouldn't be allowed is because a 457B plan is technically delayed payment, i.e. it's your pay check money being held back by your employer, until you separate employment, where you then get it all at once. A 403B is way more like a traditional 401k, it's always your money.
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
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