I moved all my retirement (except current 401K) and money market accounts to vanguard about 2 years ago. I have about 90% in VTSMX, the rest in bonds. I look at it twice a year and rebalance if necessary. Otherwise I forget about it. Vanguard is a great company with some of the lowest expense ratios out there. It's not easy making the break on your own but your future self will thank you.
My current self is already kind of upset with my past self, but I just can't stay mad at that guy for some reason :P
I am curious if you actually sold the stock and are taking possession of the funds before moving to Vanguard. This seems like it could have serious tax implications. I am hoping you mean that you did transfer paperwork. Was Edward Jones the employer's choice for the 403b and they are letting you switch to Vanguard?
I had three accounts that Edward Jones was managing: 403b w/American Funds, IRA w/Edward Jones, Taxable Account w/Edward Jones. The 403b and IRA are being transferred directly to Vanguard and the taxable account is going into my bank account. My Edward Jones advisor didn't know the tax implications of selling it(which made me nervous, but I convinced myself that I had to get away.) She had never really been able to give me advice about taxes, adjusting withholdings, etc. I lost ~$2,000 in 8 months with Edward Jones, so I'm hoping there won't be a huge hit from just getting my money out of that account. Crossing my fingers probably isn't the best strategy, but that's another reason why I've increased my 403b contribution - just in case of a big tax hit.
Congratulations on all that money you'll be saving in fees!
Yup, I'm trying to spread the word to others about the downsides of front loads and high expenses.
1. Good Move!
2. No IRAs in your plan?
3. Do you also have access to a 457B? A lot of folks with 403B's do, and all things being equal, 457B is better due to being able to withdraw penalty free after separating from your employer, regardless of age. Plus it is in addition to the 403B/401K limit, so another $18K of tax-deferral at your disposal.
1. I finally got one right!
2. I have a small IRA I started before I began working as a gov't employee. I thought there wasn't a tax advantage to contributing to a 403b and an IRA?
3. I do have access to a 457. The differences were probably explained to me 8 years ago, so I'll need to take a refresher course. I'll do some homework on it. Contributing to both at some point in the future sounds like a good idea. I was thinking about using the money I pulled out of my taxable account as a cushion for increasing tax-deferred contributions. $36K with be close to half my annual salary.
Here's what's on my employer's website: (and I also have a pension plan through CalPers)
What is the 403(b) withdrawal regulation?
Once you withdraw funds from your retirement plan, your distribution is subject to ordinary income taxes. If you have a 403(b) account and you withdraw money from your account before you reach age 59 1/2, there may be a 10% early-withdrawal penalty payable to the IRS on any pre-tax amount withdrawn. In addition, your distribution will be subject to mandatory 20% federal income tax withholding unless the entire withdrawal is rolled over directly to another qualified retirement plan or IRA.
Are there exceptions to the distribution penalty?
According to the IRS, a 10% premature withdrawal penalty can be waived if employee:
Reaches age 59 1/2
Separates from service
Dies
Becomes disabled
In the case of salary reduction contributions, encounters financial hardship
403(b) Vendor List
American Funds
Fidelity Investments
Foresters Financial
Metropolitan Life
Midland National
Voya Financial
T-Rowe Price
CalSTRS Pension2
VALIC
Vanguard Fiducairy Trust
Roth 403(b) Vendor List
Foresters Financial
Fidelity Investments
Voya Financial
CalSTRS Pension2
VALIC
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What is the 457 plan withdrawal regulation?
Once you withdraw funds from your retirement plan, your distribution is subject to ordinary income taxes. If you withdraw money from your account before you retire (at age 55), there may be a 10% early-withdrawal penalty payable to the IRS on any amount withdrawn. Please check your vendor's Web site for detailed regulations.
Are there exceptions to the distribution penalty?
According to the IRS, a 10% premature withdrawal penalty can be waived if the employee:
Reaches age 55 and is retired or no longer works for the District
Is at least 59 1/2 years old regardless of your retirement status
Has died
Becomes disabled
Encounters financial hardship
457(b) and Roth 457(b) Vendor List
EBSG
VALIC
CalSTRS Pension2
EDIT:
Pension2 has access to some Vanguard funds, but with higher expenses(around .30%):
http://www.calstrs.com/sites/main/files/file-attachments/p2_fee.pdfPension2 also has some "easy choice" portfolios, with higher expenses(around .40%):
http://www.calstrs.com/sites/main/files/file-attachments/easy_choice_portfolios.pdfMy wife and I are working on our expenses, budget and desired income during retirement. After we figure that out I'll have a better idea of when I can retire. I'm thinking 55, so I can collect from my CalPers pension. It seems like that would work well with a 457b.
Suggestions welcome :)