Author Topic: John Hancock Union 401K?  (Read 334 times)

blueman

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John Hancock Union 401K?
« on: May 12, 2020, 12:44:28 PM »
Hi!

I started a new job three months ago. It's through the IBEW outside construction (Union). I live in CA north bay. With overtime, I hope to make 100k this year. As part of my benefits for every hour, I work $9.50 an hour is put into my NEAP which is a 457 plan. That's kind of amazing, but I can't add any extra money to it. I also would be eligible for two rather small pensions if I work in the Union long enough to become vested.

I max out my IRA every year and I probably have 60k + in retirement savings currently with Vanguard. I'm male, 32 years old, and I have a healthy emergency fund and no debt. I don't own a home or anything significant beyond a car. 

I recently figured out that I'm eligible for a 401k with Coast Benefits in San Deigo county. It's some sort of Union umbrella 401k. It's through John Hancock, who I haven't heard good things about. According to Coast Benefits, the total cost/fees of the 401k is 1.5% when there is less than $10,000 in your account and $270 annually when there is more than $10,000 in your account. That's far more expensive than I'd like it to be, but I'm inclined to do it anyway and try and max it out. The tax savings seem worth it. Any thoughts? Concerns? Experiences with something similar?

Kem

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Re: John Hancock Union 401K?
« Reply #1 on: May 12, 2020, 01:45:01 PM »
https://forum.mrmoneymustache.com/investor-alley/investment-order/

457 Plan is funded at $9.5/hour - hopefully going into a low cost Equity Mutual Fund and not an annuity.
So about $20K/year into this plan.

$6K/year into an IRA

Does the 401K offer Matching?  If so I'd contribute up to the Match. 
At 1.5% I'd not put more than the match in - especially since you already have 26K/year going into pre-tax / deferred comp plans.

If any kind of tax holidays get kicked into an upcoming stimulus you may want to convert some of your IRA / Traditional retirement into a Roth.

If you have an HSA, max that puppy out, pay med costs out-of-pocket, and save all med receipts for the next 30-40 years. 

I PERSONALLY would then dump the remaining funds into a taxable brokerage accounts - something with really low expenses and highly tax efficient.  Something like VTI.   

I would not count on a pension - if it is around and pays out enjoy the frosting, but do not plan on it being a set certainty.

Perhaps also read:
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
https://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/

And a personal fav: jl collins - the simple path to wealth
« Last Edit: May 12, 2020, 01:55:07 PM by Kem »

terran

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Re: John Hancock Union 401K?
« Reply #2 on: May 12, 2020, 08:38:44 PM »
Those 401(k) fees are pretty terrible at first, but start getting much less bad as your balance goes up. If the investment options are good and you can afford to max out the full $19500 per year I'd probably be inclined to do it. After two years you're down to a 0.7% expense ratio which isn't good but also not terrible and it gets better from there. What are the investments available in the 401(k) and what additional expenses do they have?