The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: Catica on March 16, 2018, 10:47:23 AM

Title: What to do with my money?
Post by: Catica on March 16, 2018, 10:47:23 AM
Hi,

I've been reading MMM blog and other blogs about investing and how to get to early retirement.  But I don't understand ANYTHING.  Everything I read assumes that I know what things are, Vanguard, Index Funds, eggs, etc. I have no clue where to start.  MMM says invest your money in stock invest funds, what the heck is that???  Is there really really really a basic explanation to any of this?  I read all kinds of steps, bullet points in what order one should save/invest the money, max out 401K, then IRA etc. etc.  I do not understand why I would do such things.  Why max out 401K???  Why put money in IRA if I already put my money in 401K, why do other things on top of that.  How does that help me in early retirement if I have to pay penalty if I take that money out?  Then I read that you can take the money out of 401K and roll it over to IRA and withdraw without penalty before I'm 59.5.  Why are there bizarre tricks one has to do? 
Having said all that and almost knowing that I guess I'll never get it as this is so complicated that no one really knows for sure, that's why we have financial advisors etc.  Can someone simply tell me what would be the next thing for me to do?  I probably can't retire early, too late for me as didn't save enough but here is where I'm right now.  I'm 41, single, childless, no debt, not paying mortgage, $205000 in 403B, 40K in a savings account.  I can save more but just never thought about it.  What should I do with the 40K that just sits in a savings account and earns 1.5%.  I would probably keep 10K in it for emergencies but would like to do something else with the rest (30K).  Also, what should my strategy be for saving more?  I can definitely save more out of my paycheck, but don't know what to do with it. 

I would appreciate any guidance.  I think it's pretty obvious that I'm clueless.

Thanks
Catica
Title: Re: What to do with my money?
Post by: MDM on March 16, 2018, 11:00:19 AM
Catica, welcome to the forum.

See the 'Basic Terms' tab in the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) for some terminology.  Probably won't explain everything, but it might help.

If you go to Investment Order (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153), there are some "whys" to go with the "whats".

You might take a look at the items above, and references such as
Getting started - Bogleheads (https://www.bogleheads.org/wiki/Getting_started)
Stock Series (http://jlcollinsnh.com/stock-series/)
www.etf.com/docs/IfYouCan.pdf.

Does any of that help?  Specific questions after reviewing that info?
Title: Re: What to do with my money?
Post by: Rob_bob on March 16, 2018, 01:52:47 PM
The goal is to save for retirement, at whatever age. 401K, IRA etc. allow you to save money with tax benefits.  You deduct the contributions from your income lowering your taxes.  The contributions grow tax free and compound the returns faster.

Index funds, ETF's, Mutual Funds are all baskets of stocks in U.S. and foreign companies.  When economies grow so do the stock funds.  Historically stocks outperform all other asset classes, however you have to have a long term perspective because economies go through bad times and stocks will go down but will recover and go higher...long term.

You max out a 401K first because it has higher contribution limits and many have an employer matching contribution, free money, you like free money right?

Vanguard, Fidelity etc. are companies where you can open an investment account either a IRA or taxable, they also have their own brand of index funds.

The simplest thing to do with money that isn't going into an employer sponsored plan is to open an IRA (there are income limits for an IRA) and invest the money into a Total Stock Market Fund. At Vanguard that would be the ticker symbol VTSMX.

Spend some time reading, it will make more sense and become simpler as you learn.
Title: Re: What to do with my money?
Post by: Catica on March 16, 2018, 02:45:44 PM
Catica, welcome to the forum.

See the 'Basic Terms' tab in the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) for some terminology.  Probably won't explain everything, but it might help.

If you go to Investment Order (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153), there are some "whys" to go with the "whats".

You might take a look at the items above, and references such as
Getting started - Bogleheads (https://www.bogleheads.org/wiki/Getting_started)
Stock Series (http://jlcollinsnh.com/stock-series/)
www.etf.com/docs/IfYouCan.pdf.

Does any of that help?  Specific questions after reviewing that info?

I'm still reading some of the links you posted but from the Investment Order link here are my questions:
0. What is emergency fund, just money stashed somewhere for emergency?  Under my pillow??
1. What does ďup to company match meanĒ?  Same % as the company is contributing to my 403B?  Why only that and not more?
3. What is HSA?
4. Do not understand the WHY of Max Traditional IRA or Roth based on income level.  How do I know what is current federal marginal rate?  What is MAGI?
5. How do I know what the fees are for 401K?
Title: Re: What to do with my money?
Post by: Catica on March 16, 2018, 02:54:50 PM
The goal is to save for retirement, at whatever age. 401K, IRA etc. allow you to save money with tax benefits.  You deduct the contributions from your income lowering your taxes.  The contributions grow tax free and compound the returns faster.

Index funds, ETF's, Mutual Funds are all baskets of stocks in U.S. and foreign companies.  When economies grow so do the stock funds.  Historically stocks outperform all other asset classes, however you have to have a long term perspective because economies go through bad times and stocks will go down but will recover and go higher...long term.

You max out a 401K first because it has higher contribution limits and many have an employer matching contribution, free money, you like free money right?

Vanguard, Fidelity etc. are companies where you can open an investment account either a IRA or taxable, they also have their own brand of index funds.

The simplest thing to do with money that isn't going into an employer sponsored plan is to open an IRA (there are income limits for an IRA) and invest the money into a Total Stock Market Fund. At Vanguard that would be the ticker symbol VTSMX.

Spend some time reading, it will make more sense and become simpler as you learn.
What is "baskets of stocks in U.S. and foreign companies"?  What does "basket" mean in here?
When you say "Historically stocks outperform all other asset classes", what are asset classes?
"You max out a 401K first because it has higher contribution limits and many have an employer matching contribution, free money, you like free money right?"  But I can get that free money without maxing out, so why max out?
What is a "brand of index funds"??  What does that mean?
"The simplest thing to do with money that isn't going into an employer sponsored plan is to open an IRA (there are income limits for an IRA) and invest the money into a Total Stock Market Fund. At Vanguard that would be the ticker symbol VTSMX."  Is it better to put money into an employer sponsored plan or to open IRA?  That's unclear to me from this sentence.

Thanks

Title: Re: What to do with my money?
Post by: FI45RE on March 16, 2018, 02:58:59 PM
http://jlcollinsnh.com/stock-series/

This helps to explain a lot of the definitions, and explains how these financial tools work.
Title: Re: What to do with my money?
Post by: Rob_bob on March 16, 2018, 03:32:25 PM
An emergency fund is cash in a bank account, usually an amount to cover at least six months of your bills in case you out of a job.

Yes the company match is the amount the employer will contribute to you retirement plan.

The government sets the max income someone can have to make tax deductible contributions to an IRA.

The reason you contribute to the limit for a 401K even after the company match is because you can contribute a larger amount and get a larger tax deduction than with an IRA which has a max contribution of $5500 if you are under 50 years old.  After you fully contribute to the 401K then you go to an IRA, the idea is to get the biggest tax reduction, you would like to pay less taxes right?

HSA is Health Savings Account.  Another place you can put money and deduct it from your taxes.  You need to have a qualified high deductible health insurance policy to use it.

Google marginal tax rates and MAGI, do you know your tax bracket?  MAGI is less than your gross income and more than your adjusted gross income on your tax form.

Fees on 401k, ask your employer.

Basket of stocks, just a descriptive term for a Mutual fund.  Fund companies simply by a bunch of stocks that make up some segment of the total stock market.  Say health care, or utilities or even the total market itself.  When you buy that single fund you own a piece of all the stocks in that fund.

Asset classes. Company stocks, Real estate, commodities, currencies etc.

Brand of index fund.  Some investment companies are in the business of creating stock funds for people to invest in and they put their name on them. Vanguard and Blackrock are the biggest.  It's like Ford and Chevy, brand names.
Title: Re: What to do with my money?
Post by: yachi on March 16, 2018, 04:03:05 PM
Catica,
There is a saying that perfection is the enemy of the good.  It means in striving for perfection, you can miss doing what's good.  The Investment Order link and bizarre tricks are the perfection, basically all they do is save you taxes.  You don't need to understand all of them right away if you don't want to. 

Let's start with what you have:

$205,000 in a 403b - This is great.  It's a lot of money.  Let's make sure that money is working it's hardest for you.  In your 403B you'll have a list of funds you can be invested in, do any have the word 'index' in them?

You are contributing something to your 403b each year.  The limit is $18,500 per year.  If you can, contribute up to this amount.  If you have a fund with the work 'index' in it choose that one.

You're savings account:
"I would probably keep 10K in it for emergencies" - Good, this is your emergency fund no need to put it anywhere special.

If you can't save $18,500 per year in your 403b, you can spend the $30,000 on living expenses until your $30,000 runs out, at which point you can reduce your 403b contributions.

If you can save more than $18,500 per year, we can look at other places to put the money.  If not, you're done.  That's the good.  No need for perfecting it unless you're ready for more.
Title: Re: What to do with my money?
Post by: MDM on March 16, 2018, 04:18:56 PM
I'm still reading some of the links you posted but from the Investment Order link here are my questions:
0. What is emergency fund, just money stashed somewhere for emergency?  Under my pillow??
1. What does ďup to company match meanĒ?  Same % as the company is contributing to my 403B?  Why only that and not more?
3. What is HSA?
4. Do not understand the WHY of Max Traditional IRA or Roth based on income level.  How do I know what is current federal marginal rate?  What is MAGI?
5. How do I know what the fees are for 401K?
0. Not recommended for it to be under your pillow, but that's up to you.  The $40K you have in a saving account would qualify.
1. In many 401k/403b plans, the employer will match contributions you make.  Sometimes the match is 1-for-1, sometimes 0.5-for-1, etc.  In those two cases, you are getting a 100% or 50% return on your money, better than anything else you can reasonably expect.
3. See Abbreviations and Acronyms - Bogleheads (https://www.bogleheads.org/wiki/Abbreviations_and_Acronyms).
4. See Traditional versus Roth - Bogleheads (https://www.bogleheads.org/wiki/Traditional_versus_Roth), particularly the part about the commutative property of multiplication.  You can use the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) to determine marginal rates.  Another method is to take your current tax return and increase your 403b contribution by $100.  The marginal rate then is (amount tax decreases)/$100.
5. If it is a 401k, your employer has to show the fees.  Ask your benefits department.  If it is a 403b, they may or may not have to make the fees readily available.  But you should be able to find them by asking the person through whom you do your 403b investing.
Title: Re: What to do with my money?
Post by: Catica on March 16, 2018, 05:19:05 PM
An emergency fund is cash in a bank account, usually an amount to cover at least six months of your bills in case you out of a job.

Yes the company match is the amount the employer will contribute to you retirement plan.

The government sets the max income someone can have to make tax deductible contributions to an IRA.

The reason you contribute to the limit for a 401K even after the company match is because you can contribute a larger amount and get a larger tax deduction than with an IRA which has a max contribution of $5500 if you are under 50 years old.  After you fully contribute to the 401K then you go to an IRA, the idea is to get the biggest tax reduction, you would like to pay less taxes right?

HSA is Health Savings Account.  Another place you can put money and deduct it from your taxes.  You need to have a qualified high deductible health insurance policy to use it.

Google marginal tax rates and MAGI, do you know your tax bracket?  MAGI is less than your gross income and more than your adjusted gross income on your tax form.

Fees on 401k, ask your employer.

Basket of stocks, just a descriptive term for a Mutual fund.  Fund companies simply by a bunch of stocks that make up some segment of the total stock market.  Say health care, or utilities or even the total market itself.  When you buy that single fund you own a piece of all the stocks in that fund.

Asset classes. Company stocks, Real estate, commodities, currencies etc.

Brand of index fund.  Some investment companies are in the business of creating stock funds for people to invest in and they put their name on them. Vanguard and Blackrock are the biggest.  It's like Ford and Chevy, brand names.
Great, this was helpful.  I do to know my tax bracket, how do I find it out?
Title: Re: What to do with my money?
Post by: Catica on March 16, 2018, 05:26:20 PM
Catica,
There is a saying that perfection is the enemy of the good.  It means in striving for perfection, you can miss doing what's good.  The Investment Order link and bizarre tricks are the perfection, basically all they do is save you taxes.  You don't need to understand all of them right away if you don't want to. 

Let's start with what you have:

$205,000 in a 403b - This is great.  It's a lot of money.  Let's make sure that money is working it's hardest for you.  In your 403B you'll have a list of funds you can be invested in, do any have the word 'index' in them?

You are contributing something to your 403b each year.  The limit is $18,500 per year.  If you can, contribute up to this amount.  If you have a fund with the work 'index' in it choose that one.

You're savings account:
"I would probably keep 10K in it for emergencies" - Good, this is your emergency fund no need to put it anywhere special.

If you can't save $18,500 per year in your 403b, you can spend the $30,000 on living expenses until your $30,000 runs out, at which point you can reduce your 403b contributions.

If you can save more than $18,500 per year, we can look at other places to put the money.  If not, you're done.  That's the good.  No need for perfecting it unless you're ready for more.
Thank you yachi.  Here are the answers to your questions:

"In your 403B you'll have a list of funds you can be invested in, do any have the word 'index' in them?" - I have 2 with the word "index" in them, one is TIAA-CREF S&P 500 Index Fund  and the other is TIAA-CREF Lifecycle Index Retirement Income Fund    

You are contributing something to your 403b each year.  The limit is $18,500 per year.  If you can, contribute up to this amount. I'm afraid to put more money there because it won't be accessible until I'm 59.5yrs old.  What if I wanted to retire earlier than that?
Title: Re: What to do with my money?
Post by: Catica on March 16, 2018, 05:40:09 PM
http://jlcollinsnh.com/stock-series/

This helps to explain a lot of the definitions, and explains how these financial tools work.
I tried reading this last night and it was really hard to understand.  I don't think this is for people who know absolutely nothing.  His way of writing is perhaps hard to follow for me.  In Part I he talks about some Dr Lo and how not to believe him etc..  and another Part is about some Big Ugly Event etc.
Title: Re: What to do with my money?
Post by: MDM on March 16, 2018, 05:56:37 PM
I'm afraid to put more money there because it won't be accessible until I'm 59.5yrs old.  What if I wanted to retire earlier than that?
How to withdraw funds from your IRA and 401k without penalty before age 59.5 (https://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/).
Title: Re: What to do with my money?
Post by: ILikeDividends on March 16, 2018, 09:07:34 PM
You are contributing something to your 403b each year.  The limit is $18,500 per year.  If you can, contribute up to this amount. I'm afraid to put more money there because it won't be accessible until I'm 59.5yrs old.  What if I wanted to retire earlier than that?
You said you could save more.  That's where the additional savings come in.  You want to max out your tax advantaged accounts (403B, 401K, IRA, etc) first.  Then shove every penny more that you can save into a taxable investment account.

Ask yourself this: will paying more in taxes now help you retire earlier later?  That's why you want to max out your tax-advantaged accounts.  You should organize your plan around the assumption that you're not going to withdraw any of that money before 59.5.  Furthermore, the longer you can leave it in those accounts, after you hit 59.5, the better off you'll be.

I'll be 61 next month, but I'm not touching my IRA accounts until after I spend down my taxable accounts first, or until I hit 70, which is when you must start taking distributions from a traditional IRA.  Legally avoiding/deferring taxes is really nice no matter how old you are.

Plan your early retirement around a strategy of saving/investing even more than that in a taxable account, in order to bridge the gap from your early retire date until you are at least 59.5, or later than that is even better.
Title: Re: What to do with my money?
Post by: Catica on March 17, 2018, 05:55:49 AM
You are contributing something to your 403b each year.  The limit is $18,500 per year.  If you can, contribute up to this amount. I'm afraid to put more money there because it won't be accessible until I'm 59.5yrs old.  What if I wanted to retire earlier than that?
You said you could save more.  That's where the additional savings come in.  You want to max out your tax advantaged accounts (403B, 401K, IRA, etc) first.  Then shove every penny more that you can save into a taxable investment account.

Ask yourself this: will paying more in taxes now help you retire earlier later?  That's why you want to max out your tax-advantaged accounts.  You should organize your plan around the assumption that you're not going to withdraw any of that money before 59.5.  Furthermore, the longer you can leave it in those accounts, after you hit 59.5, the better off you'll be.

I'll be 61 next month, but I'm not touching my IRA accounts until after I spend down my taxable accounts first, or until I hit 70, which is when you must start taking distributions from a traditional IRA.  Legally avoiding/deferring taxes is really nice no matter how old you are.

Plan your early retirement around a strategy of saving/investing even more than that in a taxable account, in order to bridge the gap from your early retire date until you are at least 59.5, or later than that is even better.
I can save more than I'm saving now.  I can't save more than $18500.  What should I do with $30K that's sitting in the savings account?
Title: Re: What to do with my money?
Post by: bortman on March 17, 2018, 06:55:50 AM
Like you, when I came across MMM and the forum a few years back I was overwhelmed.

Some bullets to guide you on a macro level ...

ē Learning about FIRE -- or anything else, for that matter -- is a process. Give yourself time to take it in.

ē Saving your money is never bad. Not making it work for you in *some* way *is* bad. After that, it's all about optimizing how you save. This is the reason why we're here .. to make our money work so that we don't have to.

ē All investments have conditions, constraints, and benefits. Guidance about investment order is meant to help you to optimize your investments, so you get to FIRE more expeditiously.

ē For the most part, we're lazy-but-efficient investors. We aim for investments that don't require a great understanding of the minutiae of how various investments work .. only enough to allow us to minimize expenses and ensure slow-and-steady investment gains.

ē That said, savings rate -- the % of your income that you save -- is another big theme here. Maximizing savings rate will help you to accumulate wealth more quickly.


Quote
I can save more than I'm saving now.  I can't save more than $18500.  What should I do with $30K that's sitting in the savings account?

You are already contributing to a 403b. Many employers that offer 403b also make a 457b available. You should check if your employer has a 457b plan too.

If they do, then you could start contributing to the 457b in addition to the 403b. This will greatly reduce your net pay, but you could then live off of your $30k savings until you max out your 457b. That's a good way to reduce your taxable income while getting the $30k to work for you.

Note that:

ē you can contribute $18,500 to your 403b *and* another $18,500 to a 457b

ē 457b is more accessible prior to age 59.5 (https://forum.mrmoneymustache.com/investor-alley/457b-plan/msg1740289/#msg1740289), giving you another pool of money to access in early retirement

(if you haven't come across it already: FIRE =  Financial Independence Retire Early)
http://www.early-retirement.org/forums/f47/acronyms-and-slang-frequently-used-on-the-forum-34884.html
Title: Re: What to do with my money?
Post by: Rob_bob on March 17, 2018, 02:07:23 PM
An emergency fund is cash in a bank account, usually an amount to cover at least six months of your bills in case you out of a job.

Yes the company match is the amount the employer will contribute to you retirement plan.

The government sets the max income someone can have to make tax deductible contributions to an IRA.

The reason you contribute to the limit for a 401K even after the company match is because you can contribute a larger amount and get a larger tax deduction than with an IRA which has a max contribution of $5500 if you are under 50 years old.  After you fully contribute to the 401K then you go to an IRA, the idea is to get the biggest tax reduction, you would like to pay less taxes right?

HSA is Health Savings Account.  Another place you can put money and deduct it from your taxes.  You need to have a qualified high deductible health insurance policy to use it.

Google marginal tax rates and MAGI, do you know your tax bracket?  MAGI is less than your gross income and more than your adjusted gross income on your tax form.

Fees on 401k, ask your employer.

Basket of stocks, just a descriptive term for a Mutual fund.  Fund companies simply by a bunch of stocks that make up some segment of the total stock market.  Say health care, or utilities or even the total market itself.  When you buy that single fund you own a piece of all the stocks in that fund.

Asset classes. Company stocks, Real estate, commodities, currencies etc.

Brand of index fund.  Some investment companies are in the business of creating stock funds for people to invest in and they put their name on them. Vanguard and Blackrock are the biggest.  It's like Ford and Chevy, brand names.
Great, this was helpful.  I do to know my tax bracket, how do I find it out?

Google: tax brackets for 2018.  You will get a list of the income range for each tax bracket.

If you are concerned about getting money out of a retirement account before 59.5 without jumping through some hoops consider a Roth IRA.  All contributions  can be withdrawn at any time because you don't get a tax deduction on the contributions, but you must leave the gains in until 59.5.  You would need to keep track of how much you contribute over the years so you know how much you could withdraw.  You can contribute $5500 per year under age 50 and $6500 over age 50.  After age 59.5 all withdrawals are tax free.

If that $30k in savings is your emergency fund you could put it in a Certificate of Deposit, CD.  Usually they are for some set period of time like 1 year 2 years etc.  If you cash them in sooner you pay a penalty on the interest earned.  However Ally Bank has an 11 month Penalty Free CD paying about 1.74%.

Or if you don't care about a tax deduction and it's not emergency money open a Roth account and a taxable brokerage account. Put $5500 in the Roth and the rest in the taxable account, invest in a Total Market Index fund then every year move money from the taxable account to the Roth.

Google is your friend, whenever you don't understand a term just search for it  :)
Title: Re: What to do with my money?
Post by: MrThatsDifferent on March 17, 2018, 03:30:12 PM
Ok, Cattica, I think youíre being brave for putting yourself out there and letting everyone know what you donít know. I felt like you almost 18 months ago. I read everything and a lot of it was (still is) over my head and Iím a fairly intelligent and educated person. Finance and math though are not my fortes. But look at you, for someone who doesnít know jack shit, youíve got $245k of net worth with virtually no anchors. Thatís awesome and amazing. Imagine what you could do if you focused?

So, Iíll share what worked for me and maybe it can help you, one finance dummy to another. ;-)

Simplify everything. I have an excel spreadsheet where I record my assets (what gives/makes me money) and my liabilities (what takes my money away) to determine my net worth. I track this each month and record: Cash (what I have in the bank), Retirement (whatís in my retirement account) and Investments (whatís in my Vanguard account) and then I add this number up and subtract my liabilities (currently none as we rent and donít have a mortgage). Thatís how I determine my net worth. Your goal is to think of those 3 areas or buckets as levers you can use to increase your NW. Your other goal is to keep it simple.

For Cashósimplest thing you can do is take whatever safety money you want (say $10k) and put it in the bank that has the highest interest with the lowest fees and Park it there until/unless you need it as an emergency and then use and replenish.

For Retirement ógo to HR and say you want to max out whatever company retirement account you have and then forget about it for now.

For InvestmentsóLook up Vanguard dot com and get their number. Call them and say you want to open up an account that is a set and forget, like a total life strategy account. They will guide you through everything. All you want to do is send a set amount of money every pay to that account. Then get the ability to check the account online and record your figures. The key here is to not panic or get too excited when the numbers go up or down. You have to just let it do itís thing for at least 10 years, 20 is ideal.

And, thatís it. That simple. Donít make it more complex until you understand it all better.

Now, you have 2 more things to work out: what you can save and invest now, and what you want to live on when you retire. You need 2 budgets: now budget and retire budget. With now budget, the game is to live the life you want as efficiently as possible and take what is left over and put it in your investments. Your Cash and Retirement buckets are already set, so the excess just goes to Investments.

In your retirement budget, you think of the life you want when youíre done working or you scale work down. It might look the same, might look different but try to guesstimate what that yearly spend will be. Now, multiply that number by 25. Thatís the total amount of money you need of net worth to FIRE. Thatís it. Then youíve won the game!

Once you get everything simple and automated, then you can start tweaking and working on nuances like how to get more money from your Now budget. But start with this first. Good luck.
Title: Re: What to do with my money?
Post by: BTDretire on March 17, 2018, 04:29:47 PM
Congrates on the $240k+, that is way more than a start, in 10 years that mostly likely will be $500k. Now, what can you save and grow during those 10 years? Seems like in 10 to 15 years you could have $1M.

Management Fees are important, you want low costs, that's why many here recommend Vanguard index Funds.
If you have $1M invested with a 1% management fee, that's $10,000 out of your pocket. With $200,000, it's $10,000
over the next 5 years. So, Find out the fee for your 403b, if it is high, then you may want to only put money in, up to your company match. (because the match is free money) Then additional savings can go to an low fee IRA or a Roth IRA.

 Money invested in an IRA is a tax deduction the year you make it, and, it grows tax free. You would open a IRA at the company, say Vanguard, Schwab, T D Ameritrade, or a bank, then pick what you want the money invested in, VTSAX, LifeStrategy Funds,
etc.

Money invested in an ROTH IRA DOESN'T  get a tax deduction the year you make it, BUT it does grows tax free. You would open a ROTH IRA at the company, say Vanguard, Schwab, T D Ameritrade, or a bank, then pick what you want the money invested in, VTSAX, LifeStrategy Funds, etc.

  I would suggest VTSAX, that is an index fund that is invested in about 3600 companies, the companies cover
a wide range of types of companies, in other words, it is diversified, (not invested in one type of product, only like steel or only airplanes) Fee is only 0.04%.
  Someone above recommended the LifeStrategy Funds, nothing wrong there, they are less volatile, meaning the dollar amount will change less from day to day. Why are they less volatile?  Besides many stocks they also have bonds in their portfolio. There are 4 LifeStrategy Funds, they hold 20% bonds, 40% bonds, 60% bonds, and 80% bonds. The higher the percentage of bonds the more conservative. The higher percentage of bonds, the less it will rise in a booming stock market, but, also the less it will fall in a recession/depression. The website has some easily understood graphics.
 https://investor.vanguard.com/mutual-funds/lifestrategy/#/
 You may feel more comfortable with some bonds, but at 41yrs old, I think it is a bit early in your life for bonds. You can weather one or two more stock market cycles. The stock market goes up and down over the short term and up over the long term.

 An HSA is a Health Saving Account, IF you have a high deductible insurance plan, you can invest $3,450. And get a income tax deduction for it. It grows tax free, you can use it for health related expenses, BUT, many are saving it as a retirement account and paying for medical expenses with regular earnings.  You can save your medical receipts and then when retired spend any amount tax free upto the amount of your receipts.Or you canroll yur HSA into an IRA.

 I suggest you keep asking questions, this group is a treasure of knowledge, shared willingly with pleasure, and an occasional
facepunch. :-)

Title: Re: What to do with my money?
Post by: GOFU on March 17, 2018, 06:23:05 PM
You are pretty clearly a natural saver. That puts you ahead of the game and will serve you well. Don't go changin'.

All the entries above are good ones. My only advice at this stage would be:

1. Keep saving. This is the biggest difference between people who have a retirement fund and those who do not.

2. TAKE THE ADVICE YOU ARE GETTING!! Many come around asking for help but what they really want is confirmation of their own bad ideas. Don't be that person. Much of the advice so far is to increase your knowledge and start simply. But get started you must. This is good advice. Take it.

3. Keep reading. In six months or a year you will wonder why you found it all so mysterious, and you will wonder why people fork over their hard-earned money to financial "advisors" who know little to no more than you do.

Keep saving.

Did I mention you should keep saving?
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 06:20:54 AM
0. Not recommended for it to be under your pillow, but that's up to you.  The $40K you have in a saving account would qualify.
1. In many 401k/403b plans, the employer will match contributions you make.  Sometimes the match is 1-for-1, sometimes 0.5-for-1, etc.  In those two cases, you are getting a 100% or 50% return on your money, better than anything else you can reasonably expect.
3. See Abbreviations and Acronyms - Bogleheads (https://www.bogleheads.org/wiki/Abbreviations_and_Acronyms).
4. See Traditional versus Roth - Bogleheads (https://www.bogleheads.org/wiki/Traditional_versus_Roth), particularly the part about the commutative property of multiplication.  You can use the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) to determine marginal rates.  Another method is to take your current tax return and increase your 403b contribution by $100.  The marginal rate then is (amount tax decreases)/$100.
5. If it is a 401k, your employer has to show the fees.  Ask your benefits department.  If it is a 403b, they may or may not have to make the fees readily available.  But you should be able to find them by asking the person through whom you do your 403b investing.
Hi MDM, I missed this previous reply from you.
0. Got it!
1. My employer contributes a flat percentage to my plan no matter how much I contribute.
3. Thanks, will read
4. Thanks, will read and figure out
5. Yeah, the plan is 403b.  I will ask TIAA.  Do I just say "What are the fees for my account?"

Thank you
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 06:27:04 AM
Like you, when I came across MMM and the forum a few years back I was overwhelmed.

Some bullets to guide you on a macro level ...

ē Learning about FIRE -- or anything else, for that matter -- is a process. Give yourself time to take it in.

ē Saving your money is never bad. Not making it work for you in *some* way *is* bad. After that, it's all about optimizing how you save. This is the reason why we're here .. to make our money work so that we don't have to.

ē All investments have conditions, constraints, and benefits. Guidance about investment order is meant to help you to optimize your investments, so you get to FIRE more expeditiously.

ē For the most part, we're lazy-but-efficient investors. We aim for investments that don't require a great understanding of the minutiae of how various investments work .. only enough to allow us to minimize expenses and ensure slow-and-steady investment gains.

ē That said, savings rate -- the % of your income that you save -- is another big theme here. Maximizing savings rate will help you to accumulate wealth more quickly.


Quote
I can save more than I'm saving now.  I can't save more than $18500.  What should I do with $30K that's sitting in the savings account?

You are already contributing to a 403b. Many employers that offer 403b also make a 457b available. You should check if your employer has a 457b plan too.

If they do, then you could start contributing to the 457b in addition to the 403b. This will greatly reduce your net pay, but you could then live off of your $30k savings until you max out your 457b. That's a good way to reduce your taxable income while getting the $30k to work for you.

Note that:

ē you can contribute $18,500 to your 403b *and* another $18,500 to a 457b

ē 457b is more accessible prior to age 59.5 (https://forum.mrmoneymustache.com/investor-alley/457b-plan/msg1740289/#msg1740289), giving you another pool of money to access in early retirement

(if you haven't come across it already: FIRE =  Financial Independence Retire Early)
http://www.early-retirement.org/forums/f47/acronyms-and-slang-frequently-used-on-the-forum-34884.html
Thanks Bortman.  My employer only offers 457b to very high paying employees, that's not me.  Looking closely I see that my contribution goes to TDA and the employers contribution goes to a separate plan but at the same investment company.
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 06:32:25 AM
An emergency fund is cash in a bank account, usually an amount to cover at least six months of your bills in case you out of a job.

Yes the company match is the amount the employer will contribute to you retirement plan.

The government sets the max income someone can have to make tax deductible contributions to an IRA.

The reason you contribute to the limit for a 401K even after the company match is because you can contribute a larger amount and get a larger tax deduction than with an IRA which has a max contribution of $5500 if you are under 50 years old.  After you fully contribute to the 401K then you go to an IRA, the idea is to get the biggest tax reduction, you would like to pay less taxes right?

HSA is Health Savings Account.  Another place you can put money and deduct it from your taxes.  You need to have a qualified high deductible health insurance policy to use it.

Google marginal tax rates and MAGI, do you know your tax bracket?  MAGI is less than your gross income and more than your adjusted gross income on your tax form.

Fees on 401k, ask your employer.

Basket of stocks, just a descriptive term for a Mutual fund.  Fund companies simply by a bunch of stocks that make up some segment of the total stock market.  Say health care, or utilities or even the total market itself.  When you buy that single fund you own a piece of all the stocks in that fund.

Asset classes. Company stocks, Real estate, commodities, currencies etc.

Brand of index fund.  Some investment companies are in the business of creating stock funds for people to invest in and they put their name on them. Vanguard and Blackrock are the biggest.  It's like Ford and Chevy, brand names.
Great, this was helpful.  I do to know my tax bracket, how do I find it out?

Google: tax brackets for 2018.  You will get a list of the income range for each tax bracket.

If you are concerned about getting money out of a retirement account before 59.5 without jumping through some hoops consider a Roth IRA.  All contributions  can be withdrawn at any time because you don't get a tax deduction on the contributions, but you must leave the gains in until 59.5.  You would need to keep track of how much you contribute over the years so you know how much you could withdraw.  You can contribute $5500 per year under age 50 and $6500 over age 50.  After age 59.5 all withdrawals are tax free.

If that $30k in savings is your emergency fund you could put it in a Certificate of Deposit, CD.  Usually they are for some set period of time like 1 year 2 years etc.  If you cash them in sooner you pay a penalty on the interest earned.  However Ally Bank has an 11 month Penalty Free CD paying about 1.74%.

Or if you don't care about a tax deduction and it's not emergency money open a Roth account and a taxable brokerage account. Put $5500 in the Roth and the rest in the taxable account, invest in a Total Market Index fund then every year move money from the taxable account to the Roth.

Google is your friend, whenever you don't understand a term just search for it  :)
I'm in 22% tax bracket.
Title: Re: What to do with my money?
Post by: BTDretire on March 18, 2018, 07:07:47 AM
I'm in 22% tax bracket.

 Depending on your income, if you put enough money into tax deductible accounts you
can get down to the 12% bracket.
 My wife and I both have SEP/IRAs, and fund an HSA. With those and a few others
deductions we get to a very low tax burden. This may end in 2018, as the child deduction goes away.
Both my kids are over 16. I'm older and I want to start Roth conversions, which will bump my income.
 I still expect to stay in the 12% bracket.Other wisw I don't think it's worth doing a Roth conversion.
Title: Re: What to do with my money?
Post by: MDM on March 18, 2018, 08:12:27 AM
1. My employer contributes a flat percentage to my plan no matter how much I contribute.
...
5. Yeah, the plan is 403b.  I will ask TIAA.  Do I just say "What are the fees for my account?"
1. In that case, $0 is the "up to the company match" amount.

5. Yes, pretty much that.  There may be two types of fees:
a) A fee for your participation in the 403b plan, regardless of your investments.  This may be a flat fee (e.g., $40/yr) or some fraction of your 403b balance.
b) Fees specific to the funds in which you invest.  Those are often called a fund's "expense ratio" (ER) and might range from ~0.05% (which would be good) to ~1.5% (which would be bad).
Title: Re: What to do with my money?
Post by: CupcakeGuru on March 18, 2018, 10:37:33 AM
Catica, welcome! First of all you are doing very well. I see that others have recommended the http://jlcollinsnh.com/stock-series/ which is fabulous. I would also recommend the https://www.bogleheads.org/wiki/Getting_started. They are both very helpful when you are interested in learning how to invest.

Keep up the good work!
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 11:55:34 AM
An emergency fund is cash in a bank account, usually an amount to cover at least six months of your bills in case you out of a job.

Yes the company match is the amount the employer will contribute to you retirement plan.

The government sets the max income someone can have to make tax deductible contributions to an IRA.

The reason you contribute to the limit for a 401K even after the company match is because you can contribute a larger amount and get a larger tax deduction than with an IRA which has a max contribution of $5500 if you are under 50 years old.  After you fully contribute to the 401K then you go to an IRA, the idea is to get the biggest tax reduction, you would like to pay less taxes right?

HSA is Health Savings Account.  Another place you can put money and deduct it from your taxes.  You need to have a qualified high deductible health insurance policy to use it.

Google marginal tax rates and MAGI, do you know your tax bracket?  MAGI is less than your gross income and more than your adjusted gross income on your tax form.

Fees on 401k, ask your employer.

Basket of stocks, just a descriptive term for a Mutual fund.  Fund companies simply by a bunch of stocks that make up some segment of the total stock market.  Say health care, or utilities or even the total market itself.  When you buy that single fund you own a piece of all the stocks in that fund.

Asset classes. Company stocks, Real estate, commodities, currencies etc.

Brand of index fund.  Some investment companies are in the business of creating stock funds for people to invest in and they put their name on them. Vanguard and Blackrock are the biggest.  It's like Ford and Chevy, brand names.
Great, this was helpful.  I do to know my tax bracket, how do I find it out?

Google: tax brackets for 2018.  You will get a list of the income range for each tax bracket.

If you are concerned about getting money out of a retirement account before 59.5 without jumping through some hoops consider a Roth IRA.  All contributions  can be withdrawn at any time because you don't get a tax deduction on the contributions, but you must leave the gains in until 59.5.  You would need to keep track of how much you contribute over the years so you know how much you could withdraw.  You can contribute $5500 per year under age 50 and $6500 over age 50.  After age 59.5 all withdrawals are tax free.

If that $30k in savings is your emergency fund you could put it in a Certificate of Deposit, CD.  Usually they are for some set period of time like 1 year 2 years etc.  If you cash them in sooner you pay a penalty on the interest earned.  However Ally Bank has an 11 month Penalty Free CD paying about 1.74%.

Or if you don't care about a tax deduction and it's not emergency money open a Roth account and a taxable brokerage account. Put $5500 in the Roth and the rest in the taxable account, invest in a Total Market Index fund then every year move money from the taxable account to the Roth.

Google is your friend, whenever you don't understand a term just search for it  :)
$40K is extra money I have in the bank that I want to do something with rather than having it sit in the bank.  $10K out of that would be the emergency money I would leave in the bank but I want to do something with $30K.  So you are suggesting to open Roth (if I don't care about tax deductions, but I don't know whether I care or not since I don't understand it), put $5500 out of the $30K and the rest in the taxable account (what would that be?).  How do I invest in the Total Market Index fund?
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 12:06:05 PM
Ok, Cattica, I think youíre being brave for putting yourself out there and letting everyone know what you donít know. I felt like you almost 18 months ago. I read everything and a lot of it was (still is) over my head and Iím a fairly intelligent and educated person. Finance and math though are not my fortes. But look at you, for someone who doesnít know jack shit, youíve got $245k of net worth with virtually no anchors. Thatís awesome and amazing. Imagine what you could do if you focused?

So, Iíll share what worked for me and maybe it can help you, one finance dummy to another. ;-)

Simplify everything. I have an excel spreadsheet where I record my assets (what gives/makes me money) and my liabilities (what takes my money away) to determine my net worth. I track this each month and record: Cash (what I have in the bank), Retirement (whatís in my retirement account) and Investments (whatís in my Vanguard account) and then I add this number up and subtract my liabilities (currently none as we rent and donít have a mortgage). Thatís how I determine my net worth. Your goal is to think of those 3 areas or buckets as levers you can use to increase your NW. Your other goal is to keep it simple.

For Cashósimplest thing you can do is take whatever safety money you want (say $10k) and put it in the bank that has the highest interest with the lowest fees and Park it there until/unless you need it as an emergency and then use and replenish.

For Retirement ógo to HR and say you want to max out whatever company retirement account you have and then forget about it for now.

For InvestmentsóLook up Vanguard dot com and get their number. Call them and say you want to open up an account that is a set and forget, like a total life strategy account. They will guide you through everything. All you want to do is send a set amount of money every pay to that account. Then get the ability to check the account online and record your figures. The key here is to not panic or get too excited when the numbers go up or down. You have to just let it do itís thing for at least 10 years, 20 is ideal.

And, thatís it. That simple. Donít make it more complex until you understand it all better.

Now, you have 2 more things to work out: what you can save and invest now, and what you want to live on when you retire. You need 2 budgets: now budget and retire budget. With now budget, the game is to live the life you want as efficiently as possible and take what is left over and put it in your investments. Your Cash and Retirement buckets are already set, so the excess just goes to Investments.

In your retirement budget, you think of the life you want when youíre done working or you scale work down. It might look the same, might look different but try to guesstimate what that yearly spend will be. Now, multiply that number by 25. Thatís the total amount of money you need of net worth to FIRE. Thatís it. Then youíve won the game!

Once you get everything simple and automated, then you can start tweaking and working on nuances like how to get more money from your Now budget. But start with this first. Good luck.
Thanks for your simple explanation MrThatsDifferent.  Let me respond to each point you made.

1. Simplify everything / net worth.  Yes, I feel I got everything simplified and I calculated my net worth.  I can track monthly.
2. Cash. I will keep it in my bank account which yelds 1.5% APY.  I think that's decent, unless there is something much better that I'm not aware off.
3. Retirement.  I can change my contribution online.  I can just take $18500 divide by 12 and ask them to take out that amount out of my paycheck monthly.  Does that make sense?  One questions I have which investing company I should go with.  I have a choice of Vanguard, Fidelity and TIAA-CREF.  Currently I'm with TIAA.
4. Investments.  That Vanguard account, what is it?  Can I take the money out without penalty before I'm 59.5 years old?
5. I need to figure out what I want to live on when I retire.  That's hard :)
Title: Re: What to do with my money?
Post by: MDM on March 18, 2018, 12:09:20 PM
...if I don't care about tax deductions, but I don't know whether I care or not since I don't understand it)
If you enter your expected 2018 tax situation in the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) (or your 2017 tax situation in the last 2017 version (9.11), attached to post https://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/msg1825323/#msg1825323), what marginal rates do you see on the chart over cell J93?


Quote
How do I invest in the Total Market Index fund?
Start by opening an account at (listed alphabetically)
Fidelity (https://www.fidelity.com/),
Schwab (https://www.schwab.com/public/schwab/client_home), or
Vanguard (https://investor.vanguard.com/home/).
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 12:15:33 PM
Congrates on the $240k+, that is way more than a start, in 10 years that mostly likely will be $500k. Now, what can you save and grow during those 10 years? Seems like in 10 to 15 years you could have $1M.

Management Fees are important, you want low costs, that's why many here recommend Vanguard index Funds.
If you have $1M invested with a 1% management fee, that's $10,000 out of your pocket. With $200,000, it's $10,000
over the next 5 years. So, Find out the fee for your 403b, if it is high, then you may want to only put money in, up to your company match. (because the match is free money) Then additional savings can go to an low fee IRA or a Roth IRA.

 Money invested in an IRA is a tax deduction the year you make it, and, it grows tax free. You would open a IRA at the company, say Vanguard, Schwab, T D Ameritrade, or a bank, then pick what you want the money invested in, VTSAX, LifeStrategy Funds,
etc.

Money invested in an ROTH IRA DOESN'T  get a tax deduction the year you make it, BUT it does grows tax free. You would open a ROTH IRA at the company, say Vanguard, Schwab, T D Ameritrade, or a bank, then pick what you want the money invested in, VTSAX, LifeStrategy Funds, etc.

  I would suggest VTSAX, that is an index fund that is invested in about 3600 companies, the companies cover
a wide range of types of companies, in other words, it is diversified, (not invested in one type of product, only like steel or only airplanes) Fee is only 0.04%.
  Someone above recommended the LifeStrategy Funds, nothing wrong there, they are less volatile, meaning the dollar amount will change less from day to day. Why are they less volatile?  Besides many stocks they also have bonds in their portfolio. There are 4 LifeStrategy Funds, they hold 20% bonds, 40% bonds, 60% bonds, and 80% bonds. The higher the percentage of bonds the more conservative. The higher percentage of bonds, the less it will rise in a booming stock market, but, also the less it will fall in a recession/depression. The website has some easily understood graphics.
 https://investor.vanguard.com/mutual-funds/lifestrategy/#/
 You may feel more comfortable with some bonds, but at 41yrs old, I think it is a bit early in your life for bonds. You can weather one or two more stock market cycles. The stock market goes up and down over the short term and up over the long term.

 An HSA is a Health Saving Account, IF you have a high deductible insurance plan, you can invest $3,450. And get a income tax deduction for it. It grows tax free, you can use it for health related expenses, BUT, many are saving it as a retirement account and paying for medical expenses with regular earnings.  You can save your medical receipts and then when retired spend any amount tax free upto the amount of your receipts.Or you canroll yur HSA into an IRA.

 I suggest you keep asking questions, this group is a treasure of knowledge, shared willingly with pleasure, and an occasional
facepunch. :-)
Thanks BTDRetire.  Lots of good info in your post and lots to think about.
I'm finding about my account fees.
What is considered high deductible insurance plan?  I have nothing to compare to.
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 12:19:42 PM
You are pretty clearly a natural saver. That puts you ahead of the game and will serve you well. Don't go changin'.

All the entries above are good ones. My only advice at this stage would be:

1. Keep saving. This is the biggest difference between people who have a retirement fund and those who do not.

2. TAKE THE ADVICE YOU ARE GETTING!! Many come around asking for help but what they really want is confirmation of their own bad ideas. Don't be that person. Much of the advice so far is to increase your knowledge and start simply. But get started you must. This is good advice. Take it.

Thanks GOFU.  The idea of retiring early only popped up last week and I've been reading since then, but obviously I'm super clueless so I need lots of help. Just a few days on this forum and I already feel I know twice as much as I knew before I came here, so I see a great benefit in hanging out here and reading various posts.

3. Keep reading. In six months or a year you will wonder why you found it all so mysterious, and you will wonder why people fork over their hard-earned money to financial "advisors" who know little to no more than you do.

Keep saving.

Did I mention you should keep saving?
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 12:21:16 PM
I'm in 22% tax bracket.

 Depending on your income, if you put enough money into tax deductible accounts you
can get down to the 12% bracket.
Interesting.  This is a HUGE difference in taxes.  I will seriously try to get myself into the 12% bracket.
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 12:23:18 PM
1. My employer contributes a flat percentage to my plan no matter how much I contribute.
...
5. Yeah, the plan is 403b.  I will ask TIAA.  Do I just say "What are the fees for my account?"
1. In that case, $0 is the "up to the company match" amount.

5. Yes, pretty much that.  There may be two types of fees:
a) A fee for your participation in the 403b plan, regardless of your investments.  This may be a flat fee (e.g., $40/yr) or some fraction of your 403b balance.
b) Fees specific to the funds in which you invest.  Those are often called a fund's "expense ratio" (ER) and might range from ~0.05% (which would be good) to ~1.5% (which would be bad).
1. So does that mean I should not contribute to 403B since my company match is irrelevant?  Should I put the money somewhere else?
2. I emailed them about the fees.  Thanks
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 12:24:02 PM
Catica, welcome! First of all you are doing very well. I see that others have recommended the http://jlcollinsnh.com/stock-series/ which is fabulous. I would also recommend the https://www.bogleheads.org/wiki/Getting_started. They are both very helpful when you are interested in learning how to invest.

Keep up the good work!
Thanks, I will read
Title: Re: What to do with my money?
Post by: MDM on March 18, 2018, 12:34:36 PM
1. So does that mean I should not contribute to 403B since my company match is irrelevant?  Should I put the money somewhere else?
It means the dollar amount for step 1 of Investment Order (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153) is $0.  Keep going down the list....
Title: Re: What to do with my money?
Post by: Catica on March 18, 2018, 12:53:29 PM
1. So does that mean I should not contribute to 403B since my company match is irrelevant?  Should I put the money somewhere else?
It means the dollar amount for step 1 of Investment Order (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153) is $0.  Keep going down the list....
I don't understand. All these years I've been putting money in 403b.  What you are saying that I shouldn't have.  That's confusing. 
Then next thing on the list for me would be Max HSA.  I read the why for doing this, but I don't get why I would put money into something that can only be used for medical expenses
Title: Re: What to do with my money?
Post by: MDM on March 18, 2018, 12:58:55 PM
I don't understand. All these years I've been putting money in 403b.  What you are saying that I shouldn't have.  That's confusing.
Correct, not as part of "Step 1" - but keep reading....

Quote
Then next thing on the list for me would be Max HSA.  I read the why for doing this, but I don't get why I would put money into something that can only be used for medical expenses
Because
1. Most people will incur significant medical expenses at some time in their lives, and paying those tax-free is a good thing.
2. If you are the rare exception to #1, at worst the HSA acts the same as a tIRA after age 65.
Title: Re: What to do with my money?
Post by: testtest on March 18, 2018, 02:58:40 PM
No advice from me, just have to pay the community on the back for your patience. I don't work that way. I just reading this thread makes me cringe. Define "baskets"? Jeez.

Good for all of you; you really are exercising the power to change lives one at a time. Too much of a grump, over here.

Sent from my XT1049 using Tapatalk

Title: Re: What to do with my money?
Post by: testtest on March 18, 2018, 02:59:59 PM


No advice from me, just have to pat the community on the back for your patience. I don't work that way. I just reading this thread makes me cringe. Define "baskets"? Jeez.

Good for all of you; you really are exercising the power to change lives one at a time. Too much of a grump, over here.

edit: "pay" to "pat"

Sent from my XT1049 using Tapatalk



Sent from my XT1049 using Tapatalk

Title: Re: What to do with my money?
Post by: MrThatsDifferent on March 19, 2018, 01:52:18 AM
Ok, Cattica, I think youíre being brave for putting yourself out there and letting everyone know what you donít know. I felt like you almost 18 months ago. I read everything and a lot of it was (still is) over my head and Iím a fairly intelligent and educated person. Finance and math though are not my fortes. But look at you, for someone who doesnít know jack shit, youíve got $245k of net worth with virtually no anchors. Thatís awesome and amazing. Imagine what you could do if you focused?

So, Iíll share what worked for me and maybe it can help you, one finance dummy to another. ;-)

Simplify everything. I have an excel spreadsheet where I record my assets (what gives/makes me money) and my liabilities (what takes my money away) to determine my net worth. I track this each month and record: Cash (what I have in the bank), Retirement (whatís in my retirement account) and Investments (whatís in my Vanguard account) and then I add this number up and subtract my liabilities (currently none as we rent and donít have a mortgage). Thatís how I determine my net worth. Your goal is to think of those 3 areas or buckets as levers you can use to increase your NW. Your other goal is to keep it simple.

For Cashósimplest thing you can do is take whatever safety money you want (say $10k) and put it in the bank that has the highest interest with the lowest fees and Park it there until/unless you need it as an emergency and then use and replenish.

For Retirement ógo to HR and say you want to max out whatever company retirement account you have and then forget about it for now.

For InvestmentsóLook up Vanguard dot com and get their number. Call them and say you want to open up an account that is a set and forget, like a total life strategy account. They will guide you through everything. All you want to do is send a set amount of money every pay to that account. Then get the ability to check the account online and record your figures. The key here is to not panic or get too excited when the numbers go up or down. You have to just let it do itís thing for at least 10 years, 20 is ideal.

And, thatís it. That simple. Donít make it more complex until you understand it all better.

Now, you have 2 more things to work out: what you can save and invest now, and what you want to live on when you retire. You need 2 budgets: now budget and retire budget. With now budget, the game is to live the life you want as efficiently as possible and take what is left over and put it in your investments. Your Cash and Retirement buckets are already set, so the excess just goes to Investments.

In your retirement budget, you think of the life you want when youíre done working or you scale work down. It might look the same, might look different but try to guesstimate what that yearly spend will be. Now, multiply that number by 25. Thatís the total amount of money you need of net worth to FIRE. Thatís it. Then youíve won the game!

Once you get everything simple and automated, then you can start tweaking and working on nuances like how to get more money from your Now budget. But start with this first. Good luck.
Thanks for your simple explanation MrThatsDifferent.  Let me respond to each point you made.

1. Simplify everything / net worth.  Yes, I feel I got everything simplified and I calculated my net worth.  I can track monthly.
2. Cash. I will keep it in my bank account which yelds 1.5% APY.  I think that's decent, unless there is something much better that I'm not aware off.
3. Retirement.  I can change my contribution online.  I can just take $18500 divide by 12 and ask them to take out that amount out of my paycheck monthly.  Does that make sense?  One questions I have which investing company I should go with.  I have a choice of Vanguard, Fidelity and TIAA-CREF.  Currently I'm with TIAA.
4. Investments.  That Vanguard account, what is it?  Can I take the money out without penalty before I'm 59.5 years old?
5. I need to figure out what I want to live on when I retire.  That's hard :)

My pleasure.  Writing this for you has helped me share with others.

1. Thatís great!
2. That seems pretty good for the US
3. Personally I would stick with Vanguard as they have great products and low fees but the gang here might be able to answer that better.
4. Investments Vanguard are your index funds that sit outside your retirement accounts. Those you can access whenever. Again, depends on your strategy but for me, it gives me more control.
5. For me, I take the categories I use now and think through what Iíd still need if not working? Then I think of where I want to live, because I can choose to live somewhere cheaper. Then, if anything new, like maybe extended travel. World will be your oyster.
6. There is one other thing, tax minimization but youíll get to that eventually..
Title: Re: What to do with my money?
Post by: Catica on March 19, 2018, 01:09:10 PM
Ok, Cattica, I think youíre being brave for putting yourself out there and letting everyone know what you donít know. I felt like you almost 18 months ago. I read everything and a lot of it was (still is) over my head and Iím a fairly intelligent and educated person. Finance and math though are not my fortes. But look at you, for someone who doesnít know jack shit, youíve got $245k of net worth with virtually no anchors. Thatís awesome and amazing. Imagine what you could do if you focused?

So, Iíll share what worked for me and maybe it can help you, one finance dummy to another. ;-)

Simplify everything. I have an excel spreadsheet where I record my assets (what gives/makes me money) and my liabilities (what takes my money away) to determine my net worth. I track this each month and record: Cash (what I have in the bank), Retirement (whatís in my retirement account) and Investments (whatís in my Vanguard account) and then I add this number up and subtract my liabilities (currently none as we rent and donít have a mortgage). Thatís how I determine my net worth. Your goal is to think of those 3 areas or buckets as levers you can use to increase your NW. Your other goal is to keep it simple.

For Cashósimplest thing you can do is take whatever safety money you want (say $10k) and put it in the bank that has the highest interest with the lowest fees and Park it there until/unless you need it as an emergency and then use and replenish.

For Retirement ógo to HR and say you want to max out whatever company retirement account you have and then forget about it for now.

For InvestmentsóLook up Vanguard dot com and get their number. Call them and say you want to open up an account that is a set and forget, like a total life strategy account. They will guide you through everything. All you want to do is send a set amount of money every pay to that account. Then get the ability to check the account online and record your figures. The key here is to not panic or get too excited when the numbers go up or down. You have to just let it do itís thing for at least 10 years, 20 is ideal.

And, thatís it. That simple. Donít make it more complex until you understand it all better.

Now, you have 2 more things to work out: what you can save and invest now, and what you want to live on when you retire. You need 2 budgets: now budget and retire budget. With now budget, the game is to live the life you want as efficiently as possible and take what is left over and put it in your investments. Your Cash and Retirement buckets are already set, so the excess just goes to Investments.

In your retirement budget, you think of the life you want when youíre done working or you scale work down. It might look the same, might look different but try to guesstimate what that yearly spend will be. Now, multiply that number by 25. Thatís the total amount of money you need of net worth to FIRE. Thatís it. Then youíve won the game!

Once you get everything simple and automated, then you can start tweaking and working on nuances like how to get more money from your Now budget. But start with this first. Good luck.
Thanks for your simple explanation MrThatsDifferent.  Let me respond to each point you made.

1. Simplify everything / net worth.  Yes, I feel I got everything simplified and I calculated my net worth.  I can track monthly.
2. Cash. I will keep it in my bank account which yelds 1.5% APY.  I think that's decent, unless there is something much better that I'm not aware off.
3. Retirement.  I can change my contribution online.  I can just take $18500 divide by 12 and ask them to take out that amount out of my paycheck monthly.  Does that make sense?  One questions I have which investing company I should go with.  I have a choice of Vanguard, Fidelity and TIAA-CREF.  Currently I'm with TIAA.
4. Investments.  That Vanguard account, what is it?  Can I take the money out without penalty before I'm 59.5 years old?
5. I need to figure out what I want to live on when I retire.  That's hard :)

My pleasure.  Writing this for you has helped me share with others.

1. Thatís great!
2. That seems pretty good for the US
3. Personally I would stick with Vanguard as they have great products and low fees but the gang here might be able to answer that better.
4. Investments Vanguard are your index funds that sit outside your retirement accounts. Those you can access whenever. Again, depends on your strategy but for me, it gives me more control.
5. For me, I take the categories I use now and think through what Iíd still need if not working? Then I think of where I want to live, because I can choose to live somewhere cheaper. Then, if anything new, like maybe extended travel. World will be your oyster.
6. There is one other thing, tax minimization but youíll get to that eventually..
MrThatsDifferent, question about #4, if investment in Vanguard Index fund gives better return than savings account and can be accessed any time, why bother with a savings account and why not put the emergency stash in there?
Title: Re: What to do with my money?
Post by: ILikeDividends on March 19, 2018, 02:27:30 PM

MrThatsDifferent, question about #4, if investment in Vanguard Index fund gives better return than savings account and can be accessed any time, why bother with a savings account and why not put the emergency stash in there?
I'll take a stab at that.   Your emergency fund needs to be immediately available for short term unforeseen emergencies.

Historically, an index fund's return absolutely clobbers the return of a savings account over the long term.  But it can dip into loss territory over the short to medium term; for months or even for a few years.  You don't want to put yourself into a position to sell at a loss to cover a short term emergency.

A savings account has a paltry return, true, but it will never dip down into loss territory on a static dollar basis (i.e., unadjusted for inflation).  It will always be available, more or less at full value, to cover an emergency.
Title: Re: What to do with my money?
Post by: wenchsenior on March 19, 2018, 02:41:39 PM
Ok, Cattica, I think youíre being brave for putting yourself out there and letting everyone know what you donít know. I felt like you almost 18 months ago. I read everything and a lot of it was (still is) over my head and Iím a fairly intelligent and educated person. Finance and math though are not my fortes. But look at you, for someone who doesnít know jack shit, youíve got $245k of net worth with virtually no anchors. Thatís awesome and amazing. Imagine what you could do if you focused?

So, Iíll share what worked for me and maybe it can help you, one finance dummy to another. ;-)

Simplify everything. I have an excel spreadsheet where I record my assets (what gives/makes me money) and my liabilities (what takes my money away) to determine my net worth. I track this each month and record: Cash (what I have in the bank), Retirement (whatís in my retirement account) and Investments (whatís in my Vanguard account) and then I add this number up and subtract my liabilities (currently none as we rent and donít have a mortgage). Thatís how I determine my net worth. Your goal is to think of those 3 areas or buckets as levers you can use to increase your NW. Your other goal is to keep it simple.

For Cashósimplest thing you can do is take whatever safety money you want (say $10k) and put it in the bank that has the highest interest with the lowest fees and Park it there until/unless you need it as an emergency and then use and replenish.

For Retirement ógo to HR and say you want to max out whatever company retirement account you have and then forget about it for now.

For InvestmentsóLook up Vanguard dot com and get their number. Call them and say you want to open up an account that is a set and forget, like a total life strategy account. They will guide you through everything. All you want to do is send a set amount of money every pay to that account. Then get the ability to check the account online and record your figures. The key here is to not panic or get too excited when the numbers go up or down. You have to just let it do itís thing for at least 10 years, 20 is ideal.

And, thatís it. That simple. Donít make it more complex until you understand it all better.

Now, you have 2 more things to work out: what you can save and invest now, and what you want to live on when you retire. You need 2 budgets: now budget and retire budget. With now budget, the game is to live the life you want as efficiently as possible and take what is left over and put it in your investments. Your Cash and Retirement buckets are already set, so the excess just goes to Investments.

In your retirement budget, you think of the life you want when youíre done working or you scale work down. It might look the same, might look different but try to guesstimate what that yearly spend will be. Now, multiply that number by 25. Thatís the total amount of money you need of net worth to FIRE. Thatís it. Then youíve won the game!

Once you get everything simple and automated, then you can start tweaking and working on nuances like how to get more money from your Now budget. But start with this first. Good luck.
Thanks for your simple explanation MrThatsDifferent.  Let me respond to each point you made.

1. Simplify everything / net worth.  Yes, I feel I got everything simplified and I calculated my net worth.  I can track monthly.
2. Cash. I will keep it in my bank account which yelds 1.5% APY.  I think that's decent, unless there is something much better that I'm not aware off.
3. Retirement.  I can change my contribution online.  I can just take $18500 divide by 12 and ask them to take out that amount out of my paycheck monthly.  Does that make sense?  One questions I have which investing company I should go with.  I have a choice of Vanguard, Fidelity and TIAA-CREF.  Currently I'm with TIAA.
4. Investments.  That Vanguard account, what is it?  Can I take the money out without penalty before I'm 59.5 years old?
5. I need to figure out what I want to live on when I retire.  That's hard :)

My pleasure.  Writing this for you has helped me share with others.

1. Thatís great!
2. That seems pretty good for the US
3. Personally I would stick with Vanguard as they have great products and low fees but the gang here might be able to answer that better.
4. Investments Vanguard are your index funds that sit outside your retirement accounts. Those you can access whenever. Again, depends on your strategy but for me, it gives me more control.
5. For me, I take the categories I use now and think through what Iíd still need if not working? Then I think of where I want to live, because I can choose to live somewhere cheaper. Then, if anything new, like maybe extended travel. World will be your oyster.
6. There is one other thing, tax minimization but youíll get to that eventually..
MrThatsDifferent, question about #4, if investment in Vanguard Index fund gives better return than savings account and can be accessed any time, why bother with a savings account and why not put the emergency stash in there?

Generally speaking, an emergency fund needs to be absolutely safe (i.e., insured against loss or bank failure, which investment funds are not) and not subject to market fluctuations the way stocks and bonds in an investment account are.  Reason being that one of the prime reasons for suddenly needing to tap an e-fund is because of an unexpected job loss.  And one of the prime reasons for job loss is a recession, which is the same time that your investment accounts are probably going to be taking a wallop.  So most people keep some e-fund safe from loss due to to market fluctuation.  Most (not all, it depends on your risk tolerance, job situation, and emergency fund needs) people keep their e-fund in federally insured bank savings accounts, cds, etc. 
Title: Re: What to do with my money?
Post by: Catica on March 19, 2018, 04:20:55 PM

MrThatsDifferent, question about #4, if investment in Vanguard Index fund gives better return than savings account and can be accessed any time, why bother with a savings account and why not put the emergency stash in there?
I'll take a stab at that.   Your emergency fund needs to be immediately available for short term unforeseen emergencies.

Historically, an index fund's return absolutely clobbers the return of a savings account over the long term.  But it can dip into loss territory over the short to medium term; for months or even for a few years.  You don't want to put yourself into a position to sell at a loss to cover a short term emergency.

A savings account has a paltry return, true, but it will never dip down into loss territory on a static dollar basis (i.e., unadjusted for inflation).  It will always be available, more or less at full value, to cover an emergency.

Thanks!  Makes sense
Title: Re: What to do with my money?
Post by: Catica on March 19, 2018, 04:21:35 PM
Ok, Cattica, I think youíre being brave for putting yourself out there and letting everyone know what you donít know. I felt like you almost 18 months ago. I read everything and a lot of it was (still is) over my head and Iím a fairly intelligent and educated person. Finance and math though are not my fortes. But look at you, for someone who doesnít know jack shit, youíve got $245k of net worth with virtually no anchors. Thatís awesome and amazing. Imagine what you could do if you focused?

So, Iíll share what worked for me and maybe it can help you, one finance dummy to another. ;-)

Simplify everything. I have an excel spreadsheet where I record my assets (what gives/makes me money) and my liabilities (what takes my money away) to determine my net worth. I track this each month and record: Cash (what I have in the bank), Retirement (whatís in my retirement account) and Investments (whatís in my Vanguard account) and then I add this number up and subtract my liabilities (currently none as we rent and donít have a mortgage). Thatís how I determine my net worth. Your goal is to think of those 3 areas or buckets as levers you can use to increase your NW. Your other goal is to keep it simple.

For Cashósimplest thing you can do is take whatever safety money you want (say $10k) and put it in the bank that has the highest interest with the lowest fees and Park it there until/unless you need it as an emergency and then use and replenish.

For Retirement ógo to HR and say you want to max out whatever company retirement account you have and then forget about it for now.

For InvestmentsóLook up Vanguard dot com and get their number. Call them and say you want to open up an account that is a set and forget, like a total life strategy account. They will guide you through everything. All you want to do is send a set amount of money every pay to that account. Then get the ability to check the account online and record your figures. The key here is to not panic or get too excited when the numbers go up or down. You have to just let it do itís thing for at least 10 years, 20 is ideal.

And, thatís it. That simple. Donít make it more complex until you understand it all better.

Now, you have 2 more things to work out: what you can save and invest now, and what you want to live on when you retire. You need 2 budgets: now budget and retire budget. With now budget, the game is to live the life you want as efficiently as possible and take what is left over and put it in your investments. Your Cash and Retirement buckets are already set, so the excess just goes to Investments.

In your retirement budget, you think of the life you want when youíre done working or you scale work down. It might look the same, might look different but try to guesstimate what that yearly spend will be. Now, multiply that number by 25. Thatís the total amount of money you need of net worth to FIRE. Thatís it. Then youíve won the game!

Once you get everything simple and automated, then you can start tweaking and working on nuances like how to get more money from your Now budget. But start with this first. Good luck.
Thanks for your simple explanation MrThatsDifferent.  Let me respond to each point you made.

1. Simplify everything / net worth.  Yes, I feel I got everything simplified and I calculated my net worth.  I can track monthly.
2. Cash. I will keep it in my bank account which yelds 1.5% APY.  I think that's decent, unless there is something much better that I'm not aware off.
3. Retirement.  I can change my contribution online.  I can just take $18500 divide by 12 and ask them to take out that amount out of my paycheck monthly.  Does that make sense?  One questions I have which investing company I should go with.  I have a choice of Vanguard, Fidelity and TIAA-CREF.  Currently I'm with TIAA.
4. Investments.  That Vanguard account, what is it?  Can I take the money out without penalty before I'm 59.5 years old?
5. I need to figure out what I want to live on when I retire.  That's hard :)

My pleasure.  Writing this for you has helped me share with others.

1. Thatís great!
2. That seems pretty good for the US
3. Personally I would stick with Vanguard as they have great products and low fees but the gang here might be able to answer that better.
4. Investments Vanguard are your index funds that sit outside your retirement accounts. Those you can access whenever. Again, depends on your strategy but for me, it gives me more control.
5. For me, I take the categories I use now and think through what Iíd still need if not working? Then I think of where I want to live, because I can choose to live somewhere cheaper. Then, if anything new, like maybe extended travel. World will be your oyster.
6. There is one other thing, tax minimization but youíll get to that eventually..
MrThatsDifferent, question about #4, if investment in Vanguard Index fund gives better return than savings account and can be accessed any time, why bother with a savings account and why not put the emergency stash in there?

Generally speaking, an emergency fund needs to be absolutely safe (i.e., insured against loss or bank failure, which investment funds are not) and not subject to market fluctuations the way stocks and bonds in an investment account are.  Reason being that one of the prime reasons for suddenly needing to tap an e-fund is because of an unexpected job loss.  And one of the prime reasons for job loss is a recession, which is the same time that your investment accounts are probably going to be taking a wallop.  So most people keep some e-fund safe from loss due to to market fluctuation.  Most (not all, it depends on your risk tolerance, job situation, and emergency fund needs) people keep their e-fund in federally insured bank savings accounts, cds, etc.
Thank you!
Title: Re: What to do with my money?
Post by: Catica on March 19, 2018, 04:37:03 PM
I don't understand. All these years I've been putting money in 403b.  What you are saying that I shouldn't have.  That's confusing.
Correct, not as part of "Step 1" - but keep reading....

Quote
Then next thing on the list for me would be Max HSA.  I read the why for doing this, but I don't get why I would put money into something that can only be used for medical expenses
Because
1. Most people will incur significant medical expenses at some time in their lives, and paying those tax-free is a good thing.
2. If you are the rare exception to #1, at worst the HSA acts the same as a tIRA after age 65.
So, what do I do with the money that I have in 403B?  When I log in to my TIAA Cref account online I see two different plans, the one the employer contributes to and the one I contribute to (TDA). 
So from now on, I should not contribute to TDA?  I should open an account with Vanguard instead?  I see that I have a choice of Fidelity,  Vanguard and TIAA CREF for my TDA plan.  Should I just switch from TIAA CREF to Vanguard?

As far as HSA goes, I have a decent medical plan and will be able to continue that plan when I'm retired at 55.  Does HSA still make sense to me?
Title: Re: What to do with my money?
Post by: MDM on March 19, 2018, 04:59:50 PM
So, what do I do with the money that I have in 403B?  When I log in to my TIAA Cref account online I see two different plans, the one the employer contributes to and the one I contribute to (TDA). 
So from now on, I should not contribute to TDA?  I should open an account with Vanguard instead?  I see that I have a choice of Fidelity,  Vanguard and TIAA CREF for my TDA plan.  Should I just switch from TIAA CREF to Vanguard?
For investment choices within a given plan, presenting your situation using the format suggested by Asking Portfolio Questions - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212) is worth doing.  We need to understand your options in order to provide specific ideas.

Quote
As far as HSA goes, I have a decent medical plan and will be able to continue that plan when I'm retired at 55.  Does HSA still make sense to me?
Depends how decent.  Might be worth putting your numbers into a couple of comparison tools, e.g., Health Savings Account (HSA) vs. Traditional Health Plan (https://www.dinkytown.net/java/HSAvsTraditional.html) and the 'HDHP Analysis' tab of the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).
Title: Re: What to do with my money?
Post by: CorpRaider on March 20, 2018, 11:25:59 AM
You might be a candidate for a low cost financial advisor if you don't want to invest the time and mental effort on this subject. 

Vanguard has a service you could check out on their website.  Alternatively, you could just use the lowest fee (expense ratio) target date funds that line up with your goal retirement date.  You would probably do better buying that over time and just relying on the allocation in the fund than most of these people buying 100% total market who will freak out when they are down 50%-90% at some point in the future and know just enough to be dangerous.

After you get that squared and get your assets working for you, you can decide if you want to optimize the investment order and whatnot.

Try keep after inflation results in mind, so you will realize why you might need to take a little volatility versus sitting in cash, as it seems you have been doing to this point.
Title: Re: What to do with my money?
Post by: Catica on March 20, 2018, 01:32:59 PM
So, what do I do with the money that I have in 403B?  When I log in to my TIAA Cref account online I see two different plans, the one the employer contributes to and the one I contribute to (TDA). 
So from now on, I should not contribute to TDA?  I should open an account with Vanguard instead?  I see that I have a choice of Fidelity,  Vanguard and TIAA CREF for my TDA plan.  Should I just switch from TIAA CREF to Vanguard?
For investment choices within a given plan, presenting your situation using the format suggested by Asking Portfolio Questions - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212) is worth doing.  We need to understand your options in order to provide specific ideas.

Quote
As far as HSA goes, I have a decent medical plan and will be able to continue that plan when I'm retired at 55.  Does HSA still make sense to me?
Depends how decent.  Might be worth putting your numbers into a couple of comparison tools, e.g., Health Savings Account (HSA) vs. Traditional Health Plan (https://www.dinkytown.net/java/HSAvsTraditional.html) and the 'HDHP Analysis' tab of the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).
Hi MDM, by "what do I do with the money that I have in 403B" I didn't mean what investment choices I should make within a given plan but more of like do I keep the money I have in it or do I transfer them to some other type of account.
As for HSA, what is considered decent?  I put the numbers into those calculator tools but I have no idea what my health expense will be when I'm old.  Right now, I have no health expense.  I see a doctor when I don't feel well, like I might have a cold or something, every 2-3 years or so.  I go to the dentist for cleaning 2x a year.  But I don't know my health will be later in life.  But health insurance is mandatory, so what choice do I have?
Title: Re: What to do with my money?
Post by: Catica on March 20, 2018, 01:34:20 PM
You might be a candidate for a low cost financial advisor if you don't want to invest the time and mental effort on this subject. 

Vanguard has a service you could check out on their website.  Alternatively, you could just use the lowest fee (expense ratio) target date funds that line up with your goal retirement date.  You would probably do better buying that over time and just relying on the allocation in the fund than most of these people buying 100% total market who will freak out when they are down 50%-90% at some point in the future and know just enough to be dangerous.

After you get that squared and get your assets working for you, you can decide if you want to optimize the investment order and whatnot.

Try keep after inflation results in mind, so you will realize why you might need to take a little volatility versus sitting in cash, as it seems you have been doing to this point.
I get a free advisor from TIAA.  I made an appointment to meet with her/him
Title: Re: What to do with my money?
Post by: Catica on March 20, 2018, 01:39:23 PM
By the way I just checked with TIAA about the fees and they told me that I am not assessed any fees by TIAA in connection with my retirement accounts. But the the investments within my accounts are subject to expenses, which I can see when I log in to my account. 
Title: Re: What to do with my money?
Post by: wenchsenior on March 20, 2018, 02:28:48 PM
I would advise not going without health insurance.  Being 'healthy' is a false confidence. Most of the catastrophic health bills that have happened in my circle of friends (and to me) happened out of the blue, and often when we were previously healthy (or had an unknown health condition that had not shown symptoms prior to the health emergency).  These included knee surgery (after being side-swiped by a passing bike), multiple arm surgeries and rehab (hit by a car while biking to work), reconstructive wrist surgery after a fall, paraplegia (after an unidentified minor bacterial infection settled in the spine and ate the bone), unexpected stroke around age 45, thyroid cancer (also around age 45), autoimmune thyroid disease (about of the third of the people I know) that requires life long medication, cervical cancer and hysterectomy (as we now know caused by a virus and thus not preventable for those of us not vaccinated prior to sexual activity), endometriosis resulting in hysterectomy, etc etc.  With the possible exception of the stroke (she was a nonsmoker, but perhaps her risk even that young might have been increased by lack of enough exercise), none of these were caused by unhealthy lifestyle or were preventable, but were just random luck of the draw.

Don't take that risk.  Don't compromise your financial future on that kind of gamble...it could destroy all of your other frugal efforts almost overnight.  I'm so thankful I learned that lesson at 19.
Title: Re: What to do with my money?
Post by: MDM on March 20, 2018, 02:47:07 PM
So, what do I do with the money that I have in 403B?  When I log in to my TIAA Cref account online I see two different plans, the one the employer contributes to and the one I contribute to (TDA). 
So from now on, I should not contribute to TDA?  I should open an account with Vanguard instead?  I see that I have a choice of Fidelity,  Vanguard and TIAA CREF for my TDA plan.  Should I just switch from TIAA CREF to Vanguard?
For investment choices within a given plan, presenting your situation using the format suggested by Asking Portfolio Questions - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212) is worth doing.  We need to understand your options in order to provide specific ideas.

Quote
As far as HSA goes, I have a decent medical plan and will be able to continue that plan when I'm retired at 55.  Does HSA still make sense to me?
Depends how decent.  Might be worth putting your numbers into a couple of comparison tools, e.g., Health Savings Account (HSA) vs. Traditional Health Plan (https://www.dinkytown.net/java/HSAvsTraditional.html) and the 'HDHP Analysis' tab of the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).
Hi MDM, by "what do I do with the money that I have in 403B" I didn't mean what investment choices I should make within a given plan but more of like do I keep the money I have in it or do I transfer them to some other type of account.
Yes, keep the current 403b balance there for now.

See Took Your Advice, Need MORE (https://forum.mrmoneymustache.com/case-studies/took-your-advice-need-more/msg1940129/#msg1940129): you may find it worthwhile to do what that person did with the "investment order" steps: document what you are or aren't doing for each of them.

Quote
As for HSA, what is considered decent?  I put the numbers into those calculator tools but I have no idea what my health expense will be when I'm old.  Right now, I have no health expense.  I see a doctor when I don't feel well, like I might have a cold or something, every 2-3 years or so.  I go to the dentist for cleaning 2x a year.  But I don't know my health will be later in life.  But health insurance is mandatory, so what choice do I have?
A reasonable assumption is that health expenses will increase as you age.  But that is secondary to the cost/benefit analysis you can do for current health costs.  When you put the numbers into those calculator tools for your current situation, what answers do you get?
Title: Re: What to do with my money?
Post by: wenchsenior on March 20, 2018, 04:19:09 PM
I would advise not going without health insurance.  Being 'healthy' is a false confidence. Most of the catastrophic health bills that have happened in my circle of friends (and to me) happened out of the blue, and often when we were previously healthy (or had an unknown health condition that had not shown symptoms prior to the health emergency).  These included knee surgery (after being side-swiped by a passing bike), multiple arm surgeries and rehab (hit by a car while biking to work), reconstructive wrist surgery after a fall, paraplegia (after an unidentified minor bacterial infection settled in the spine and ate the bone), unexpected stroke around age 45, thyroid cancer (also around age 45), autoimmune thyroid disease (about of the third of the people I know) that requires life long medication, cervical cancer and hysterectomy (as we now know caused by a virus and thus not preventable for those of us not vaccinated prior to sexual activity), endometriosis resulting in hysterectomy, etc etc.  With the possible exception of the stroke (she was a nonsmoker, but perhaps her risk even that young might have been increased by lack of enough exercise), none of these were caused by unhealthy lifestyle or were preventable, but were just random luck of the draw.

Don't take that risk.  Don't compromise your financial future on that kind of gamble...it could destroy all of your other frugal efforts almost overnight.  I'm so thankful I learned that lesson at 19.


EDIT because apparently I misread "health expense" as "health insurance".  Maybe I need a nap? Carry on.
Title: Re: What to do with my money?
Post by: Catica on March 20, 2018, 09:12:33 PM
So, what do I do with the money that I have in 403B?  When I log in to my TIAA Cref account online I see two different plans, the one the employer contributes to and the one I contribute to (TDA). 
So from now on, I should not contribute to TDA?  I should open an account with Vanguard instead?  I see that I have a choice of Fidelity,  Vanguard and TIAA CREF for my TDA plan.  Should I just switch from TIAA CREF to Vanguard?
For investment choices within a given plan, presenting your situation using the format suggested by Asking Portfolio Questions - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212) is worth doing.  We need to understand your options in order to provide specific ideas.

Quote
As far as HSA goes, I have a decent medical plan and will be able to continue that plan when I'm retired at 55.  Does HSA still make sense to me?
Depends how decent.  Might be worth putting your numbers into a couple of comparison tools, e.g., Health Savings Account (HSA) vs. Traditional Health Plan (https://www.dinkytown.net/java/HSAvsTraditional.html) and the 'HDHP Analysis' tab of the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).
Hi MDM, by "what do I do with the money that I have in 403B" I didn't mean what investment choices I should make within a given plan but more of like do I keep the money I have in it or do I transfer them to some other type of account.
Yes, keep the current 403b balance there for now.

See Took Your Advice, Need MORE (https://forum.mrmoneymustache.com/case-studies/took-your-advice-need-more/msg1940129/#msg1940129): you may find it worthwhile to do what that person did with the "investment order" steps: document what you are or aren't doing for each of them.

Quote
As for HSA, what is considered decent?  I put the numbers into those calculator tools but I have no idea what my health expense will be when I'm old.  Right now, I have no health expense.  I see a doctor when I don't feel well, like I might have a cold or something, every 2-3 years or so.  I go to the dentist for cleaning 2x a year.  But I don't know my health will be later in life.  But health insurance is mandatory, so what choice do I have?
A reasonable assumption is that health expenses will increase as you age.  But that is secondary to the cost/benefit analysis you can do for current health costs.  When you put the numbers into those calculator tools for your current situation, what answers do you get?
The calculator compares High Deductible Health Plan (HDHP) with a Health Savings Account.  What is High Deductible Health Plan (HDHP)?  And I don't understand what numbers I'm supposed to put in for HSA as I don't have one. 
Title: Re: What to do with my money?
Post by: MDM on March 20, 2018, 09:23:28 PM
The calculator compares High Deductible Health Plan (HDHP) with a Health Savings Account.  What is High Deductible Health Plan (HDHP)?  And I don't understand what numbers I'm supposed to put in for HSA as I don't have one.
Try googling HDHP.  See Publication 969 for the IRS language.

If you don't have an option to get an HDHP, then you can't get an HSA, so just skip that step. :)
Title: Re: What to do with my money?
Post by: Catica on March 20, 2018, 09:33:48 PM
The calculator compares High Deductible Health Plan (HDHP) with a Health Savings Account.  What is High Deductible Health Plan (HDHP)?  And I don't understand what numbers I'm supposed to put in for HSA as I don't have one.
Try googling HDHP.  See Publication 969 for the IRS language.

If you don't have an option to get an HDHP, then you can't get an HSA, so just skip that step. :)
I don't have HDHP.  I'm assuming so because I don't have to meet any deductible.

Here is the investment order and what I'm doing:

0. Establish an emergency fund to your satisfaction  -  done         
1. Contribute to your 401k up to any company match - I've been contributing 5% but since there is no company match, I should be contributing $0, is that right?
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.  I have no debt     
3. Max HSA - can't get HSA since I don't have HDHP       
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level - not doing this because I know nothing about it, so that's my next step I guess?
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA, swap #4 and #5) how do I know if my 403B fees are lower, what are IRA fees?, what's tIRA?         
6. Fund a mega backdoor Roth if applicable. Not sure what that is so not doing this       
7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.           
8. Invest in a taxable account and/or fund a 529 with any extra. Again, what's that?           
Title: Re: What to do with my money?
Post by: MDM on March 20, 2018, 09:55:04 PM
1. Contribute to your 401k up to any company match - I've been contributing 5% but since there is no company match, I should be contributing $0, is that right?
Yes.

Quote
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level - not doing this because I know nothing about it, so that's my next step I guess?
Yes.  If you already have money with Fidelity, Schwab, or Vanguard, open an IRA there.  Otherwise pick one - there are supporters and detractors of each.  Google "open an IRA at _____" for each, to see what is needed.

Quote
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA, swap #4 and #5) how do I know if my 403B fees are lower, what are IRA fees?, what's tIRA?
You will have to ask your 403b provider for the "expense ratios" for your investments.  Fidelity, Schwab, and Vanguard will show the expense ratios for their funds on their web sites.  "Expense ratio" and "fee" are more or less synonymous here.  See Expense ratios - Bogleheads (https://www.bogleheads.org/wiki/Expense_ratios).  tIRA is short for traditional IRA.

Quote
8. Invest in a taxable account and/or fund a 529 with any extra. Again, what's that?
Google 529 plan.
Title: Re: What to do with my money?
Post by: Catica on March 20, 2018, 10:01:14 PM
1. Contribute to your 401k up to any company match - I've been contributing 5% but since there is no company match, I should be contributing $0, is that right?
Yes.

Quote
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level - not doing this because I know nothing about it, so that's my next step I guess?
Yes.  If you already have money with Fidelity, Schwab, or Vanguard, open an IRA there.  Otherwise pick one - there are supporters and detractors of each.  Google "open an IRA at _____" for each, to see what is needed.

Quote
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA, swap #4 and #5) how do I know if my 403B fees are lower, what are IRA fees?, what's tIRA?
You will have to ask your 403b provider for the "expense ratios" for your investments.  Fidelity, Schwab, and Vanguard will show the expense ratios for their funds on their web sites.  "Expense ratio" and "fee" are more or less synonymous here.  See Expense ratios - Bogleheads (https://www.bogleheads.org/wiki/Expense_ratios).  tIRA is short for traditional IRA.

Quote
8. Invest in a taxable account and/or fund a 529 with any extra. Again, what's that?
Google 529 plan.
4. I do not have money with Fidelity, Schwab, or Vanguard. 
5. I know what my fees are I just don't know how to compare them to Fidelity, Schwab, or Vanguard.
8.  529 plan is future college costs, why would I invest in that?
Title: Re: What to do with my money?
Post by: jmwagner5 on March 20, 2018, 10:02:24 PM

Here is the investment order and what I'm doing:

4. Max Traditional IRA or Roth (or backdoor Roth) based on income level - not doing this because I know nothing about it, so that's my next step I guess?
6. Fund a mega backdoor Roth if applicable. Not sure what that is so not doing this       
8. Invest in a taxable account and/or fund a 529 with any extra. Again, what's that?         

Hi Catica and welcome!  Let me start by saying congrats on diving into this and great job at having no debt and already having a healthy cushion of savings!  I'm going to dive into a couple of your questions from above to see if I can help you out like some of these other fine folks have done.

4.  A Roth IRA is an investment account that is invested with after-tax dollars that is allowed to grow tax-free so long as you do not remove any gains from the account before age 59.5.  As was pointed out earlier you can put in $5500 in 2018 according to IRS limits.  It is important to note that your contributions to a Roth IRA are always available without any penalties or taxes. 

A backdoor Roth is converting 401k or 403b money into a Roth IRA.  This conversion is different from a contribution in that it is not subject to the $5500 annual limit and does not have an income limit like a traditional Roth IRA would.  It is called a backdoor Roth because it gives people who do not normally have access to a Roth IRA (ie. high income earners) a way to get money into an investment account that they normally do not have access too.

6. A mega backdoor Roth works like the backdoor Roth above but features After-Tax contributions into your 401k (or 403b in your case).  I would not recommend worrying as much about that at this point in time.  You have to be fully maximizing your 403b to really dive into this.

8. A 529 plan is an investment account that is strictly used to help pay for college/educational related expenses.  The investment options work very similar to your retirement account (an index fund for instance) but the money is designated for educational use instead of retirement.  It is typically an account that parents will open up for their kids and invest in over the next 18-22 years so they have long-term compound growth to work with for paying secondary education. 

Hope this helps!
Title: Re: What to do with my money?
Post by: jmwagner5 on March 20, 2018, 10:03:35 PM

8.  529 plan is future college costs, why would I invest in that?

If you had children who would eventually be going to college.
Title: Re: What to do with my money?
Post by: MDM on March 20, 2018, 10:14:29 PM
4. I do not have money with Fidelity, Schwab, or Vanguard. 
5. I know what my fees are I just don't know how to compare them to Fidelity, Schwab, or Vanguard.
8.  529 plan is future college costs, why would I invest in that?
4. OK. Pick one.  You will have excellent choices at any of the three.  E.g., see Fidelity, Vanguard or Schwab? I need to choose. - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?t=222872), or fidelity schwab vanguard - Google Search (https://www.google.com/search?&q=+fidelity+schwab+vanguard).

5. Once you have an account, you can look at the fund fees.  Or, look at the ones suggested in Three-fund portfolio - Bogleheads (https://www.bogleheads.org/wiki/Three-fund_portfolio). You can look at those funds without opening an account.  E.g., see vtsmx - Google Search (https://www.google.com/search?q=vtsmx): the expense ratio is 0.15%.

8. If you don't want to, don't.  Remember, these are generic recommendations. :)
Title: Re: What to do with my money?
Post by: ILikeDividends on March 21, 2018, 12:24:11 AM
I have been happily with Schwab for more than 30 years; mortgages, taxable investment accounts, retirement accounts -- the whole nine yards.  I would never go anywhere else.  In fairness, I have no experience with Fidelity or Vangaurd, so I couldn't, in good conscience, say that one is better than the other.

I would say that, if in doubt, go with Schwab.  They are an ethical and honest banker/broker who has made a business leading the pack in lowering fees, and they excel in solid executions of trades.  And with a full suite of no-commission, low expense index funds available, I have had not even the slightest temptation to sample their competition.

I invite anyone else to evangelize their experiences with different brokers.  I have no agenda here, and I receive no compensation for my expressed opinion.
Title: Re: What to do with my money?
Post by: GOFU on March 21, 2018, 05:47:14 AM
I have been happily with Schwab for more than 30 years; mortgages, taxable investment accounts, retirement accounts -- the whole nine yards.  I would never go anywhere else.  In fairness, I have no experience with Fidelity or Vangaurd, so I couldn't, in good conscience, say that one is better than the other.

I would say that, if in doubt, go with Schwab.  They are an ethical and honest banker/broker who has made a business leading the pack in lowering fees, and they excel in solid executions of trades.  And with a full suite of no-commission, low expense index funds available, I have had not even the slightest temptation to sample their competition.

I invite anyone else to evangelize their experiences with different brokers.  I have no agenda here, and I receive no compensation for my expressed opinion.
My experience with Vanguard over 20+ years has been the same as this description for Schwab. (Except I have no experience with mortgages at Vanguard, if they even offer them.) As your account balances grow at Vanguard they actively offer you opportunities to lower your costs, such as converting to preferential funds with lower expense ratios (Admiral funds). Vanguard has a basic driving principle that pervades their site, their advice and their offerings: buy and hold at the lowest possible cost. There is also a substantial body of learning material there, but you don't have to own their funds to take advantage of that.  I have no connection or interest in Vanguard except as a fund owner.

I haven't been a customer of Fidelity or Schwab. One thing to consider is that at Vanguard as a fund owner you are part owner of the company. Aside from Vanguard fund owners themselves, there is no other owner or company taking profits, however small the percentage. Schwab and Fidelity are owned by someone else so there must be a profit margin built in for them. I don't know how or how much that might impact investments held with them. 

It is probably more important to get started than to spend substantial time fretting over which of these you are going to choose.
Title: Re: What to do with my money?
Post by: CorpRaider on March 21, 2018, 05:58:46 AM
Catica, you seem like you might want some personal help/interaction.  In that case, maybe pick Fidelity or Schwab depending upon which has an office most convenient to you.
Title: Re: What to do with my money?
Post by: Catica on March 21, 2018, 06:24:56 AM

Here is the investment order and what I'm doing:

4. Max Traditional IRA or Roth (or backdoor Roth) based on income level - not doing this because I know nothing about it, so that's my next step I guess?
6. Fund a mega backdoor Roth if applicable. Not sure what that is so not doing this       
8. Invest in a taxable account and/or fund a 529 with any extra. Again, what's that?         

Hi Catica and welcome!  Let me start by saying congrats on diving into this and great job at having no debt and already having a healthy cushion of savings!  I'm going to dive into a couple of your questions from above to see if I can help you out like some of these other fine folks have done.

4.  A Roth IRA is an investment account that is invested with after-tax dollars that is allowed to grow tax-free so long as you do not remove any gains from the account before age 59.5.  As was pointed out earlier you can put in $5500 in 2018 according to IRS limits.  It is important to note that your contributions to a Roth IRA are always available without any penalties or taxes. 

A backdoor Roth is converting 401k or 403b money into a Roth IRA.  This conversion is different from a contribution in that it is not subject to the $5500 annual limit and does not have an income limit like a traditional Roth IRA would.  It is called a backdoor Roth because it gives people who do not normally have access to a Roth IRA (ie. high income earners) a way to get money into an investment account that they normally do not have access too.

6. A mega backdoor Roth works like the backdoor Roth above but features After-Tax contributions into your 401k (or 403b in your case).  I would not recommend worrying as much about that at this point in time.  You have to be fully maximizing your 403b to really dive into this.

8. A 529 plan is an investment account that is strictly used to help pay for college/educational related expenses.  The investment options work very similar to your retirement account (an index fund for instance) but the money is designated for educational use instead of retirement.  It is typically an account that parents will open up for their kids and invest in over the next 18-22 years so they have long-term compound growth to work with for paying secondary education. 

Hope this helps!
4. Why would would anyone want Roth IRA?
8. I do not have kids
Title: Re: What to do with my money?
Post by: Catica on March 21, 2018, 06:25:30 AM
4. I do not have money with Fidelity, Schwab, or Vanguard. 
5. I know what my fees are I just don't know how to compare them to Fidelity, Schwab, or Vanguard.
8.  529 plan is future college costs, why would I invest in that?
4. OK. Pick one.  You will have excellent choices at any of the three.  E.g., see Fidelity, Vanguard or Schwab? I need to choose. - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?t=222872), or fidelity schwab vanguard - Google Search (https://www.google.com/search?&q=+fidelity+schwab+vanguard).

5. Once you have an account, you can look at the fund fees.  Or, look at the ones suggested in Three-fund portfolio - Bogleheads (https://www.bogleheads.org/wiki/Three-fund_portfolio). You can look at those funds without opening an account.  E.g., see vtsmx - Google Search (https://www.google.com/search?q=vtsmx): the expense ratio is 0.15%.

8. If you don't want to, don't.  Remember, these are generic recommendations. :)
4. How different is that from what I already have with TIAA?
8. It's not that I don't want to, I just don't understand why I should want to.
Title: Re: What to do with my money?
Post by: Catica on March 21, 2018, 06:35:55 AM
Thanks everyone for all the help and suggestions.  This is what I am still confused about.

1. Why would I not want to contribute to my 403b?
2. How is my TIAA TDA account different from Vanguard, Fidelity, Schwab?  Fees???  How can I compare the fees if there aren't exactly the same investment options at each of these institutions?
3. I still don't understand why I would open HSA if I already have a health plan which is mandatory any way.  I don't understand the calculators to compare HSA to traditional health plan, as in order for me to plug in the numbers I need to know HSA deductibles, contributions etc. If I don't have HSA I don't know any of these numbers.

Thanks
Title: Re: What to do with my money?
Post by: CorpRaider on March 21, 2018, 07:18:10 AM
If you follow through his order, you will probably get back to the 403/401 account, if you save enough.  I think he preferences the IRA first because of greater flexibility and generally lower costs.

You compare the expense ratios of the funds offered (or the ones you are likely to select).  One thing to note is that if you have all your money in a cash/guaranteed investment contract type account, there may not be any fee/expense to you since you are giving them access to cash and they can invest in other higher return stuff and keep the difference; similar to a bank deposit.

So, for example, if you were going to move the cash to a target date fund, you would look at the info for that fund and there will be an expense ratio.  TIAA is not, in my observation, generally a leader on low costs.  I often cite them as evidence for the fact that Vanguard's mutual structure is not a panacea for maintaining low costs.
Title: Re: What to do with my money?
Post by: Catica on March 21, 2018, 04:07:07 PM
If you follow through his order, you will probably get back to the 403/401 account, if you save enough.  I think he preferences the IRA first because of greater flexibility and generally lower costs.

You compare the expense ratios of the funds offered (or the ones you are likely to select).  One thing to note is that if you have all your money in a cash/guaranteed investment contract type account, there may not be any fee/expense to you since you are giving them access to cash and they can invest in other higher return stuff and keep the difference; similar to a bank deposit.

So, for example, if you were going to move the cash to a target date fund, you would look at the info for that fund and there will be an expense ratio.  TIAA is not, in my observation, generally a leader on low costs.  I often cite them as evidence for the fact that Vanguard's mutual structure is not a panacea for maintaining low costs.
"If you follow through his order, you will probably get back to the 403/401 account, if you save enough".  What do you mean I'll go back to it?
I can tell my employer to put my money in Vanguard TDA or Fidelity TDA instead of TIAA, is that the same as opening a separate account with them on my own?
Title: Re: What to do with my money?
Post by: MDM on March 21, 2018, 04:16:35 PM
General comment, from What Is a TDA Retirement Plan? (https://www.sapling.com/7357963/tda-retirement-plan):
Quote
TDA retirement plans often are referred to by other names. They may be called a Tax Sheltered Annuity, or TSA, which denotes that the tax deferral aspect of the plan provides a tax shelter for participants. It may be called a 403(b) plan, which denotes the tax code used to identify these plans when compared to 401(k) or 457 retirement accounts. TDAs in a 403(b) plan may be identified because they will have an annuity as the primary investment option rather than mutual funds.

Unless informed otherwise, the highlighted portion of the quote is probably a good assumption wherever "TDA" is seen in this thread.
Title: Re: What to do with my money?
Post by: Rob_bob on March 21, 2018, 08:05:05 PM
Catica, after not looking at this thread for a couple of days and now looking over your new questions and the replies I am going to say you will be driving yourself crazy trying to digest all the answers from different people in a jigsaw puzzle fasion.

Way near the beginning of the thread I answered some of your question and I have seen you ask the same question several times to be answered by other people and you still don't fully grasp the replies.

What you really need to do is make an appointment with an hourly fee fiduciary financial planer.  Sit down with one person ,face to face, and ask your questions.  They will be able to look at your accounts and options and explain everything to you.  I believe this is the only way you will get your questions answered in an easy to digest manner.

Go here to find an adviser in your area.

https://www.napfa.org/
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 04:57:39 AM
General comment, from What Is a TDA Retirement Plan? (https://www.sapling.com/7357963/tda-retirement-plan):
Quote
TDA retirement plans often are referred to by other names. They may be called a Tax Sheltered Annuity, or TSA, which denotes that the tax deferral aspect of the plan provides a tax shelter for participants. It may be called a 403(b) plan, which denotes the tax code used to identify these plans when compared to 401(k) or 457 retirement accounts. TDAs in a 403(b) plan may be identified because they will have an annuity as the primary investment option rather than mutual funds.

Unless informed otherwise, the highlighted portion of the quote is probably a good assumption wherever "TDA" is seen in this thread.
OK. I get it.  TDA in my case = 403b.  What I don't get is why what I see different plans when I look at my TIAA account.  The money the employer contributes to my account goes into DEFINED CONTRIBUTION RETIREMENT PLAN and the money I contribute go to TAX-DEFERRED ANNUITY PLAN.  Why is that? what's the difference? And would I be better off if I told my employer to send my contributions to Vanguard rather than TIAA? 
Title: Re: What to do with my money?
Post by: MDM on March 22, 2018, 05:07:23 AM
OK. I get it.  TDA in my case = 403b.  What I don't get is why what I see different plans when I look at my TIAA account.  The money the employer contributes to my account goes into DEFINED CONTRIBUTION RETIREMENT PLAN and the money I contribute go to TAX-DEFERRED ANNUITY PLAN.  Why is that? what's the difference?
That's a great question for whoever generates the statements with those labels.  Otherwise, no way to determine if those are merely arbitrary and confusing labels, or if there is real meaning behind them.

Quote
And would I be better off if I told my employer to send my contributions to Vanguard rather than TIAA?
Maybe.  To understand better, we would need to see the list of your investment options using the format suggested in https://forum.mrmoneymustache.com/investor-alley/what-to-do-with-my-money-89254/msg1939276/#msg1939276.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 05:34:00 AM
Catica, after not looking at this thread for a couple of days and now looking over your new questions and the replies I am going to say you will be driving yourself crazy trying to digest all the answers from different people in a jigsaw puzzle fasion.

Way near the beginning of the thread I answered some of your question and I have seen you ask the same question several times to be answered by other people and you still don't fully grasp the replies.

What you really need to do is make an appointment with an hourly fee fiduciary financial planer.  Sit down with one person ,face to face, and ask your questions.  They will be able to look at your accounts and options and explain everything to you.  I believe this is the only way you will get your questions answered in an easy to digest manner.

Go here to find an adviser in your area.

https://www.napfa.org/
Hi Rob_bob, you are right this is a jigsaw puzzle that is driving me crazy but as much as I'm trying to educate myself (even though it might seem to people here that I'm not because I ask the same questions over and over) the information is confusing.  Perhaps I was hoping someone would specifically give me responses that would apply to my situation rather than generic advice.  All of this investing, personal finance, saving for retirement, different plans, loopholes, schemes to get your money out sooner etc. is very hard for people who are not in a financial field.  I could ask why do we have a system that is so hard to grasp for majority of the people?  How can it be for people if most people can't grasp it.  Perhaps that's one of the reasons a lot of people are left out with nothing when it's time for them to retire and they need to slave for the rest of their lives.  I'm really trying to learn and if I'm asking the same questions over and over it's not because I'm trying to annoy all of you it's because I really don't understand. For example, I still don't understand why opening IRA with Vanguard is better than having my employer send my TDA contributions to Vanguard, and I don't believe anyone gave me a straight answer (edit to say that MDM posted an answer to this very question while I was typing this).  I don't want to sound like I'm complaining and demanding that someone addresses every concern of mine, as I very much so appreciate every advice everyone has given me on this thread so far, but I'm just trying to clarify few basic things before my brain can move forward and consider other things such as HSA, 457 plans etc.  I want to thank everyone who has taken the time to respond to my questions, and I'm sorry I'm so stupid and don't get it. 
Title: Re: What to do with my money?
Post by: wenchsenior on March 22, 2018, 07:39:07 AM
Catica, take a deep breath and chill.  You sound a little like me when I first started thinking about personal finance back when I was in my late 20s and only recently out of grad school.  I happened to get a job as admin asst with a financial planner, and realized that I was now surrounded by jargon I didn't understand, and taking client phone calls that I had no idea how to answer or even what they were asking me about.  I was immediately distressed to realize I was almost 30 and bone-ignorant of all this stuff.

In my case, the answer was easy.  I just went to B&N and bought a book (an actual physical book, not the internet) that was essentially about personal financial planning for dummies.  I mean, it wasn't technically that book (which I think is available), but it was a bare bones basic guide. 

In your case, you are trying to learn every detail and term etc before taking any action. But there really isn't any need for that.  You are in a very good place financially, so there's no need for you to create so much artificial stress for yourself. 

If I were you, I would go back to the investment order list posted at the top of this thread.  Figure out which step you are on RIGHT NOW.  Learn about and then take action on ONLY that step.  It's much easier to learn and absorb information in small chunks, and that way as you will feel a sense of accomplishment with each step that will make you feel calmer, and motivate you.  Then move on to the next step.  Stop worrying so much about terminology and details that pertain to later steps until it's time to tackle those.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 09:17:56 AM
OK. I get it.  TDA in my case = 403b.  What I don't get is why what I see different plans when I look at my TIAA account.  The money the employer contributes to my account goes into DEFINED CONTRIBUTION RETIREMENT PLAN and the money I contribute go to TAX-DEFERRED ANNUITY PLAN.  Why is that? what's the difference?
That's a great question for whoever generates the statements with those labels.  Otherwise, no way to determine if those are merely arbitrary and confusing labels, or if there is real meaning behind them.
That's my point, I don't know if these labels are something that's a common knowledge to everyone here and it's me who just I doesn't understand or if it's something that just makes everyone even more confused!

Quote
And would I be better off if I told my employer to send my contributions to Vanguard rather than TIAA?
Maybe.  To understand better, we would need to see the list of your investment options using the format suggested in https://forum.mrmoneymustache.com/investor-alley/what-to-do-with-my-money-89254/msg1939276/#msg1939276.
Ok, I followed the format you posted in that message and here is what I've got:
Emergency funds: right now $40K since itís in a savings account, but want to make it more like $10K and invest the $30K into something
Debt: $0
Tax Filing Status: Single
Tax Rate: 22% Federal, 5.1% State
State of Residence: MA
Age: 41
Desired Asset allocation: No idea
Desired International allocation: No idea

Current retirement assets

Taxable
I donít have any %, I have $30K in savings account
xx% cash (for investing Ė do not include emergency funds)
xx% fund name (ticker symbol) (expense ratio)
xx% stock company name (ticker symbol)

401k
NONE

Roth IRA at Vanguard
NONE

Rollover IRA at Schwab
NONE

403b
xx% fund name (ticker symbol) (expense ratio) - Where do I find this??????
Company match? Flat 9.5%, no matching

SIMPLE IRA at Fidelity
NONE

IRA at Vanguard
NONE

Total of All Accounts Together (not each account individually) should equal 100%.

Contributions

New annual Contributions

$9300 403b


Available funds

Funds available in 403(b)
Fund Name: CREF Money Market Account (R3), Ticker symbol: QCMMIX, Expense ratio: 0.23%
Fund name: CREF Stock Account (R3), Ticker symbol: QCSTIX,  Expense ratio: 0.32%
Fund name: TIAA Real Estate Account, Ticker symbol: QREARX, Expense ratio: 0.85%
Fund name: TIAA-CREF International Equity Fund (Institutional), Ticker symbol: TIIEX, Expense ratio: 0.49%
Fund name: TIAA-CREF Lifecycle Index Retirement Income Fund (Institutional), Ticker symbol: TRILX, Expense ratio: 0.10%
Fund name: TIAA-CREF Mid-Cap Value Fund (Institutional), Ticker symbol: TIMVX, Expense ratio: 0.41%
Fund name: TIAA-CREF S&P 500 Index Fund (Institutional), Ticker symbol: TISPX, Expense ratio: 0.06%
Title: Re: What to do with my money?
Post by: Rob_bob on March 22, 2018, 04:33:05 PM
One reason the answers you are getting are somewhat generic is because all  company retirement plans are not the same inside.  Not all 401k's have the same investments inside available.  You have a 403b correct?  Those are for teachers and charitable non profits and the like.  You asked if it would be better if your employer sent your contributions to Vangaurd rather than TIAA.  I would ask you the question can your employer send contributions to Vangaurd, is that an option?  Probably not. That would be a reason to open an IRA with Vangaurd or Schwab or Fidelity.  When you open your own account you pick exactly what you want to have in it.

You did say your employer contributions go into a Defined Contribution Plan.  That is just a label,  we don't know what that money is invested into.  It could be a stock fund, it could be a money market paying 0.15% you will have to find out what that is and does your employer have to put the money there, can they put it in one of the other options?  You said your contributions are going into a Tax Deferred Annuity Plan.  Annuities are not "investments" they are insurance products.  They usually have high fee's and low returns.  They take the place of a pension where they say they will guarantee to pay you $xxx per month for the rest of your life.  Most often with no inflation adjustment so the value/purchasing power, of the dollars paid to you will decrease over the years.  You need to ask what the terms of that Annuity are.

You did list some options in your account.  I would put money into the S&P 500 Index Fund, symbol TISPX, say 80-85% and then the International Equity TIIEX, the remaining 15-20%.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 05:28:47 PM
One reason the answers you are getting are somewhat generic is because all  company retirement plans are not the same inside.  Not all 401k's have the same investments inside available.  You have a 403b correct?  Those are for teachers and charitable non profits and the like.  You asked if it would be better if your employer sent your contributions to Vangaurd rather than TIAA.  I would ask you the question can your employer send contributions to Vangaurd, is that an option?  Probably not. That would be a reason to open an IRA with Vangaurd or Schwab or Fidelity.  When you open your own account you pick exactly what you want to have in it.
Yes, it is an option.  I can have them send money to Fidelity, Vanguard or TIAA.  I decide.  So far I had them send the money to TIAA but I can easily change it.

You did say your employer contributions go into a Defined Contribution Plan.  That is just a label,  we don't know what that money is invested into.  It could be a stock fund, it could be a money market paying 0.15% you will have to find out what that is and does your employer have to put the money there, can they put it in one of the other options?  You said your contributions are going into a Tax Deferred Annuity Plan.  Annuities are not "investments" they are insurance products.  They usually have high fee's and low returns.  They take the place of a pension where they say they will guarantee to pay you $xxx per month for the rest of your life.  Most often with no inflation adjustment so the value/purchasing power, of the dollars paid to you will decrease over the years.  You need to ask what the terms of that Annuity are.
OK, I will ask

You did list some options in your account.  I would put money into the S&P 500 Index Fund, symbol TISPX, say 80-85% and then the International Equity TIIEX, the remaining 15-20%.
I listed the funds my money is in, not what is available to me.  There are way more options in my account.  The ones I listed are the ones I have money in.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 05:30:47 PM
Catica, take a deep breath and chill.  You sound a little like me when I first started thinking about personal finance back when I was in my late 20s and only recently out of grad school.  I happened to get a job as admin asst with a financial planner, and realized that I was now surrounded by jargon I didn't understand, and taking client phone calls that I had no idea how to answer or even what they were asking me about.  I was immediately distressed to realize I was almost 30 and bone-ignorant of all this stuff.

In my case, the answer was easy.  I just went to B&N and bought a book (an actual physical book, not the internet) that was essentially about personal financial planning for dummies.  I mean, it wasn't technically that book (which I think is available), but it was a bare bones basic guide. 

In your case, you are trying to learn every detail and term etc before taking any action. But there really isn't any need for that.  You are in a very good place financially, so there's no need for you to create so much artificial stress for yourself. 

If I were you, I would go back to the investment order list posted at the top of this thread.  Figure out which step you are on RIGHT NOW.  Learn about and then take action on ONLY that step.  It's much easier to learn and absorb information in small chunks, and that way as you will feel a sense of accomplishment with each step that will make you feel calmer, and motivate you.  Then move on to the next step.  Stop worrying so much about terminology and details that pertain to later steps until it's time to tackle those.
Yes, I went back to the investment order and I'm on HSA.  I'm currently reading about it and trying to figure out how this could be beneficial to me.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 05:37:25 PM
If I wanted to lower my tax rate for 2017, can I still contribute to some account so it would count for last year? 
Title: Re: What to do with my money?
Post by: robartsd on March 22, 2018, 05:40:13 PM
Funds available in 403(b)
Fund name: TIAA-CREF Lifecycle Index Retirement Income Fund (Institutional), Ticker symbol: TRILX, Expense ratio: 0.10%
Fund name: TIAA-CREF S&P 500 Index Fund (Institutional), Ticker symbol: TISPX, Expense ratio: 0.06%
These are the two funds I'd focus on in a TIAA 403(b). TISPX holds the 500 largest companies on the US stock market. TRILX holds a mix of stocks (including international) and bonds (about 40% stocks and 60% bonds). How you want to balance between the two depends on how much you want to maximize growth vs. how much you want to protect against loss. If you decided you want about 80% stocks and 20% bonds (a common ratio for aggressive growth) in this account, you could have 1/3 of the value allocated to TRILX and 2/3 of the value allocated to TISPX. 1/2 allocated to each would net about 70% stocks and 30% bonds. 1/3 TISPX and 2/3 TRILX would net about 60% stocks and 40% bonds (a common moderate growth ratio).

It is unusual for employers to offer a choice of institutions for employer sponsored retirement plans. In Vanguard you'd likely have access to Vanguard Total Stock Market Index Fund (ER 0.04%), Vanguard Total Bond Market Index Fund (ER 0.04%), Vanguard Total International Stock Market Index Fund (ER 0.11%), and Vanguard Total International Bond Market Index Fund (ER 0.11%). Allowing you more flexibility in choosing your balance between stocks and bonds as well as choosing your balance of domestic vs. international exposure AND saving you bit on investment expense ratios (I listed expense ratios for Admiral Class Shares of these funds - a 403(b) is likely to have access to the slightly better expense ratios of Institutional Class Shares).

You said your contributions are going into a Tax Deferred Annuity Plan.  Annuities are not "investments" they are insurance products.
It looks like this is just a label that TIAA uses for the investment account that holds your contributions (but an annuity may be the default choice for investments in such plans if you haven't specified something else). In either case you want to know what actual investments are held in both these accounts and how much you can direct the actual investments (usually you have near total control within the range of choices listed).

Yes, it is an option.  I can have them send money to Fidelity, Vanguard or TIAA.  I decide.  So far I had them send the money to TIAA but I can easily change it.
You may be able to choose where the money goes moving forward, but still not be able to rollover what's already been sent to TIAA into your Vanguard account. If a rollover is allowed, there may be some extra fees involved to do it - which may or may not be worthwhile depending on the investment options you want to use. If I was starting out with those options, I'm pretty sure I'd choose Vanguard, but if I had already established an account elsewhere I'd have to do more research before deciding to rollover.

If I wanted to lower my tax rate for 2017, can I still contribute to some account so it would count for last year? 
If you have not maxed out your 2017 IRA contributions you can still make them. Traditional IRA contributions are tax deductible (subject to MAGI limits). The 2017 IRA contribution limit is $5500 per person.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 05:49:10 PM
Funds available in 403(b)
Fund name: TIAA-CREF Lifecycle Index Retirement Income Fund (Institutional), Ticker symbol: TRILX, Expense ratio: 0.10%
Fund name: TIAA-CREF S&P 500 Index Fund (Institutional), Ticker symbol: TISPX, Expense ratio: 0.06%
These are the two funds I'd focus on in a TIAA 403(b). TISPX holds the 500 largest companies on the US stock market. TRILX holds a mix of stocks (including international) and bonds (about 40% stocks and 60% bonds). How you want to balance between the two depends on how much you want to maximize growth vs. how much you want to protect against loss. If you decided you want about 80% stocks and 20% bonds (a common ratio for aggressive growth) in this account, you could have 1/3 of the value allocated to TRILX and 2/3 of the value allocated to TISPX. 1/2 allocated to each would net about 70% stocks and 30% bonds. 1/3 TISPX and 2/3 TRILX would net about 60% stocks and 40% bonds (a common moderate growth ratio).
Are you saying that I should not contribute to the other funds I'm currently contributing?
It is unusual for employers to offer a choice of institutions for employer sponsored retirement plans. In Vanguard you'd likely have access to Vanguard Total Stock Market Index Fund (ER 0.04%), Vanguard Total Bond Market Index Fund (ER 0.04%), Vanguard Total International Stock Market Index Fund (ER 0.11%), and Vanguard Total International Bond Market Index Fund (ER 0.11%). Allowing you more flexibility in choosing your balance between stocks and bonds as well as choosing your balance of domestic vs. international exposure AND saving you bit on investment expense ratios (I listed expense ratios for Admiral Class Shares of these funds - a 403(b) is likely to have access to the slightly better expense ratios of Institutional Class Shares).
My employers does offer a choice

Yes, it is an option.  I can have them send money to Fidelity, Vanguard or TIAA.  I decide.  So far I had them send the money to TIAA but I can easily change it.
You may be able to choose where the money goes moving forward, but still not be able to rollover what's already been sent to TIAA into your Vanguard account. If a rollover is allowed, there may be some extra fees involved to do it - which may or may not be worthwhile depending on the investment options you want to use. If I was starting out with those options, I'm pretty sure I'd choose Vanguard, but if I had already established an account elsewhere I'd have to do more research before deciding to rollover.
I didn't mean that I want to rollover what was sent to TIAA, I meant that I can have them send the contributions going forward.  But I don't know if that's wise.

If I wanted to lower my tax rate for 2017, can I still contribute to some account so it would count for last year? 
If you have not maxed out your 2017 IRA contributions you can still make them. Traditional IRA contributions are tax deductible (subject to MAGI limits). The 2017 IRA contribution limit is $5500 per person.
I don't have an IRA account.  Perhaps it's time to open it?
Title: Re: What to do with my money?
Post by: Rob_bob on March 22, 2018, 07:15:58 PM
Have you filled your 2017 taxes yet?  If you have then you can't make tax deductible contributions for 2017, well I suppose you could file an amended return to do it.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 07:26:02 PM
Have you filled your 2017 taxes yet?  If you have then you can't make tax deductible contributions for 2017, well I suppose you could file an amended return to do it.
I have not.  Should I open Vanguard IRA ASAP?
Title: Re: What to do with my money?
Post by: Rob_bob on March 22, 2018, 08:01:06 PM
Have you filled your 2017 taxes yet?  If you have then you can't make tax deductible contributions for 2017, well I suppose you could file an amended return to do it.
I have not.  Should I open Vanguard IRA ASAP?

If you want a tax deductible account in addition to the 403b then yes.  If you have enough income to max out the 403b then you would want an IRA for more retirement saving options.
Title: Re: What to do with my money?
Post by: Catica on March 22, 2018, 08:16:18 PM
Have you filled your 2017 taxes yet?  If you have then you can't make tax deductible contributions for 2017, well I suppose you could file an amended return to do it.
I have not.  Should I open Vanguard IRA ASAP?

If you want a tax deductible account in addition to the 403b then yes.  If you have enough income to max out the 403b then you would want an IRA for more retirement saving options.
Ok, I'm confused, again.  Are you saying I should max out my 403b before I contribute to an IRA?  Looking at investment order recommended to me, I should be contributing $0 if my employer doesn't do any matching. 
Title: Re: What to do with my money?
Post by: MDM on March 22, 2018, 08:59:24 PM
Looking at investment order recommended to me, I should be contributing $0 if my employer doesn't do any matching.
Correct, for step #1.

But there are steps #4 and #5.  Have you looked at those?  It seems you have been reading only step #1 when it comes to using the 403b...?

Without knowing your tax situation now, and an estimate of what it will be in retirement, we can't give good advice on whether you should use traditional or Roth.  See the links in the investment order post about that topic for self-study, or share more about current income and pension eligibility.

Might also be worthwhile to look at the 'Basic Terms' tab in the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).  May or may not be helpful.

The expense ratios in your 403b appear good.  In that case, it doesn't much matter whether you fund an IRA before a 403b or vice versa - steps #4 and #5 blur together into "step 4.5" or whatever name one chooses.
Title: Re: What to do with my money?
Post by: robartsd on March 23, 2018, 09:16:21 AM
I would open an IRA at Vanguard. If you want to contribute to reduce 2017 taxes, this is the only path available that I am aware of. You can sign up online (there might have a form or two that you may need to get notarized and send back). You could contribute up to $11,000 in it right away ($5,500 for 2017 before April 16, 2018 plus $5,500 for 2018). If you sign up for most communication to be electronic Vanguard charges no fees to maintain the IRA account.

If you do move your 403(b) to Vanguard, my guess is that it would provide slightly better investment options (Institutional class shares instead of Admiral class shares) so generally you'd probably want to maximize it before your IRA; but a Admiral shares in an IRA at Vanguard beat your TIAA 403(b) options. As noted in MDM's investment order step 4 (max IRA) and step 5 (max 401k/403b/457) are pretty interchangeable so if you can't max all of them you might as well choose the one with the best investment options/lowest fees. As individuals can choose their IRA provider on their own, they can often find an IRA with better options than their employer selected plans.
Title: Re: What to do with my money?
Post by: Catica on March 23, 2018, 10:08:34 AM
Looking at investment order recommended to me, I should be contributing $0 if my employer doesn't do any matching.
Correct, for step #1.

But there are steps #4 and #5.  Have you looked at those?  It seems you have been reading only step #1 when it comes to using the 403b...?

Without knowing your tax situation now, and an estimate of what it will be in retirement, we can't give good advice on whether you should use traditional or Roth.  See the links in the investment order post about that topic for self-study, or share more about current income and pension eligibility.

Might also be worthwhile to look at the 'Basic Terms' tab in the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).  May or may not be helpful.

The expense ratios in your 403b appear good.  In that case, it doesn't much matter whether you fund an IRA before a 403b or vice versa - steps #4 and #5 blur together into "step 4.5" or whatever name one chooses.
Yes, I did look at step #4 and #5.  It confused me because of step #1 but I get it now.  My current income is $80322.  How do I find out about pension eligibility? Yes, I looked at basic terms in that spreadsheet. Helpful
Title: Re: What to do with my money?
Post by: alanB on March 23, 2018, 10:18:23 AM
All of this investing, personal finance, saving for retirement, different plans, loopholes, schemes to get your money out sooner etc. is very hard for people who are not in a financial field.  I could ask why do we have a system that is so hard to grasp for majority of the people?  How can it be for people if most people can't grasp it.  Perhaps that's one of the reasons a lot of people are left out with nothing when it's time for them to retire and they need to slave for the rest of their lives.

I think you are absolutely correct, though I don't think that is the main factor.  If I had to rank the primary reasons why people stay slaves to the system:

1) Most income is spent right away
2) "Saved" money is actually used for deferred spending (not invested)
3) Poor choice of investments
4) Lack of understanding of how much money is needed to retire
5) Investments are not tax-efficient (did not follow the Investment Order referenced over and over here)

The loopholes are what separate the very wealthy from the slightly wealthy, not the wealthy from the masses.  Even with your claims of ignorance you are still easily on track for retirement.  Good luck and keep learning! :)
Title: Re: What to do with my money?
Post by: robartsd on March 23, 2018, 10:36:27 AM
How do I find out about pension eligibility?
Someone (probably in HR) can tell you about what is available from your employer. They are usually familiar with the basic features of the available plans, eligibility requirements, and sign-up documents - they are not usually experts at all plan features/rules, but can provide the documents that go over all the details. IRS rules for each plan type can be found on their website. IRS rules specify contribution limits, qualified withdraws, and penalties for non-qualified withdraws.
Title: Re: What to do with my money?
Post by: Catica on March 23, 2018, 10:42:51 AM
I would open an IRA at Vanguard. If you want to contribute to reduce 2017 taxes, this is the only path available that I am aware of. You can sign up online (there might have a form or two that you may need to get notarized and send back). You could contribute up to $11,000 in it right away ($5,500 for 2017 before April 16, 2018 plus $5,500 for 2018). If you sign up for most communication to be electronic Vanguard charges no fees to maintain the IRA account.

If you do move your 403(b) to Vanguard, my guess is that it would provide slightly better investment options (Institutional class shares instead of Admiral class shares) so generally you'd probably want to maximize it before your IRA; but a Admiral shares in an IRA at Vanguard beat your TIAA 403(b) options. As noted in MDM's investment order step 4 (max IRA) and step 5 (max 401k/403b/457) are pretty interchangeable so if you can't max all of them you might as well choose the one with the best investment options/lowest fees. As individuals can choose their IRA provider on their own, they can often find an IRA with better options than their employer selected plans.
The question now would be whether contributing $5500 to my Vanguard IRA (if I decide to open it) would actually lower my taxes. 
Whether to rollover my 403b to that new IRA would be a separate question I think. And another question is whether to have my employer send my future contribution to Vanguard rather than TIAA. 
Title: Re: What to do with my money?
Post by: MDM on March 23, 2018, 10:50:27 AM
My current income is $80322.  How do I find out about pension eligibility? Yes, I looked at basic terms in that spreadsheet. Helpful
For a single filer, $80K/yr - whether that is gross (before any deductions), Adjusted Gross Income (AGI; last line of the first page of Form 1040), or taxable (line 43 of form 1040) - puts you in the 22% bracket.  That probably means traditional contributions would be better for you.  No problem doing so in a 403b.

For an IRA, your contribution is fully deductible only if your MAGI calculation for traditional IRA purposes (see https://www.irs.gov/publications/p590a#en_US_2017_publink1000230489) is less than a certain amount.  For 2017, that amount is $62,000.  For 2018, that amount is $63,000.  See IRA Deduction Limits | Internal Revenue Service (https://www.irs.gov/retirement-plans/ira-deduction-limits).  Now we need to know exactly what that $80322 is: gross, AGI, taxable, or...?

Your situation may be a good example of when "if you need the 401k deduction to be eligible for a tIRA deduction, swap #4 and #5" applies to the investment order.

For pension eligibility, ask your company benefits department.
Title: Re: What to do with my money?
Post by: Catica on March 26, 2018, 03:59:40 AM
All of this investing, personal finance, saving for retirement, different plans, loopholes, schemes to get your money out sooner etc. is very hard for people who are not in a financial field.  I could ask why do we have a system that is so hard to grasp for majority of the people?  How can it be for people if most people can't grasp it.  Perhaps that's one of the reasons a lot of people are left out with nothing when it's time for them to retire and they need to slave for the rest of their lives.

I think you are absolutely correct, though I don't think that is the main factor.  If I had to rank the primary reasons why people stay slaves to the system:

1) Most income is spent right away
2) "Saved" money is actually used for deferred spending (not invested)
3) Poor choice of investments
4) Lack of understanding of how much money is needed to retire
5) Investments are not tax-efficient (did not follow the Investment Order referenced over and over here)

The loopholes are what separate the very wealthy from the slightly wealthy, not the wealthy from the masses.  Even with your claims of ignorance you are still easily on track for retirement.  Good luck and keep learning! :)
Thanks!
Title: Re: What to do with my money?
Post by: Catica on March 26, 2018, 04:00:46 AM
How do I find out about pension eligibility?
Someone (probably in HR) can tell you about what is available from your employer. They are usually familiar with the basic features of the available plans, eligibility requirements, and sign-up documents - they are not usually experts at all plan features/rules, but can provide the documents that go over all the details. IRS rules for each plan type can be found on their website. IRS rules specify contribution limits, qualified withdraws, and penalties for non-qualified withdraws.
OK, I found out that my employer doesn't offer a pension plan.
Title: Re: What to do with my money?
Post by: Catica on March 26, 2018, 04:05:50 AM
My current income is $80322.  How do I find out about pension eligibility? Yes, I looked at basic terms in that spreadsheet. Helpful
For a single filer, $80K/yr - whether that is gross (before any deductions), Adjusted Gross Income (AGI; last line of the first page of Form 1040), or taxable (line 43 of form 1040) - puts you in the 22% bracket.  That probably means traditional contributions would be better for you.  No problem doing so in a 403b.

For an IRA, your contribution is fully deductible only if your MAGI calculation for traditional IRA purposes (see https://www.irs.gov/publications/p590a#en_US_2017_publink1000230489) is less than a certain amount.  For 2017, that amount is $62,000.  For 2018, that amount is $63,000.  See IRA Deduction Limits | Internal Revenue Service (https://www.irs.gov/retirement-plans/ira-deduction-limits).  Now we need to know exactly what that $80322 is: gross, AGI, taxable, or...?

Your situation may be a good example of when "if you need the 401k deduction to be eligible for a tIRA deduction, swap #4 and #5" applies to the investment order.

For pension eligibility, ask your company benefits department.
OK, I had my taxes done over the weekend.  I will get them by mail soon from my tax guy, so right now I can't see it what's on each line but putting max in an IRA account he said it lowered my taxes significantly.  So, I need to open an IRA.  What I gathered here is that I should go with Vanguard and invest in Total Stock Market Fund (VTSMX).  I would put $11000 ($5500 for 2017 and $5500 for 2018). Does this make sense?
Title: Re: What to do with my money?
Post by: Scortius on March 26, 2018, 11:07:07 AM
My current income is $80322.  How do I find out about pension eligibility? Yes, I looked at basic terms in that spreadsheet. Helpful
For a single filer, $80K/yr - whether that is gross (before any deductions), Adjusted Gross Income (AGI; last line of the first page of Form 1040), or taxable (line 43 of form 1040) - puts you in the 22% bracket.  That probably means traditional contributions would be better for you.  No problem doing so in a 403b.

For an IRA, your contribution is fully deductible only if your MAGI calculation for traditional IRA purposes (see https://www.irs.gov/publications/p590a#en_US_2017_publink1000230489) is less than a certain amount.  For 2017, that amount is $62,000.  For 2018, that amount is $63,000.  See IRA Deduction Limits | Internal Revenue Service (https://www.irs.gov/retirement-plans/ira-deduction-limits).  Now we need to know exactly what that $80322 is: gross, AGI, taxable, or...?

Your situation may be a good example of when "if you need the 401k deduction to be eligible for a tIRA deduction, swap #4 and #5" applies to the investment order.

For pension eligibility, ask your company benefits department.
OK, I had my taxes done over the weekend.  I will get them by mail soon from my tax guy, so right now I can't see it what's on each line but putting max in an IRA account he said it lowered my taxes significantly.  So, I need to open an IRA.  What I gathered here is that I should go with Vanguard and invest in Total Stock Market Fund (VTSMX).  I would put $11000 ($5500 for 2017 and $5500 for 2018). Does this make sense?

Sounds great! Assuming you open a 'Traditional' IRA the 2017 contribution will lower your taxable income for last year by $5,500 and the 2018 contribution will do the same for this year.  If you're in the 2017 25% and the 2018 22% bracket, those contributions will give you immediate savings of $1,375 and $ $1,210 respectively, not counting any money they give you through investment gains. You may benefit even further if the reduction in your AGI makes you eligible for other tax credits, although that's more difficult to predict and not really worth getting into at this stage.
Title: Re: What to do with my money?
Post by: robartsd on March 26, 2018, 11:10:41 AM
OK, I had my taxes done over the weekend.  I will get them by mail soon from my tax guy, so right now I can't see it what's on each line but putting max in an IRA account he said it lowered my taxes significantly.  So, I need to open an IRA.  What I gathered here is that I should go with Vanguard and invest in Total Stock Market Fund (VTSMX).  I would put $11000 ($5500 for 2017 and $5500 for 2018). Does this make sense?
VTSMX is investor class shares (minimum $3,000 initial investment, 0.15% ER). If you're investing $10,000 or more you want admiral class shares (VTSAX - 0.04% ER). If your taxes were filled out with the maximum IRA contribution, then you do need to open that IRA and fund at least the $5500 for 2017 (funding all or part of the $5500 for 2018 is optional - it won't affect your 2017 taxes). If you're comfortable with putting away $11,000 for retirement right now, I'd go ahead and max 2017 and 2018 IRA right away.
Title: Re: What to do with my money?
Post by: Catica on March 26, 2018, 05:18:23 PM
My current income is $80322.  How do I find out about pension eligibility? Yes, I looked at basic terms in that spreadsheet. Helpful
For a single filer, $80K/yr - whether that is gross (before any deductions), Adjusted Gross Income (AGI; last line of the first page of Form 1040), or taxable (line 43 of form 1040) - puts you in the 22% bracket.  That probably means traditional contributions would be better for you.  No problem doing so in a 403b.

For an IRA, your contribution is fully deductible only if your MAGI calculation for traditional IRA purposes (see https://www.irs.gov/publications/p590a#en_US_2017_publink1000230489) is less than a certain amount.  For 2017, that amount is $62,000.  For 2018, that amount is $63,000.  See IRA Deduction Limits | Internal Revenue Service (https://www.irs.gov/retirement-plans/ira-deduction-limits).  Now we need to know exactly what that $80322 is: gross, AGI, taxable, or...?

Your situation may be a good example of when "if you need the 401k deduction to be eligible for a tIRA deduction, swap #4 and #5" applies to the investment order.

For pension eligibility, ask your company benefits department.
OK, I had my taxes done over the weekend.  I will get them by mail soon from my tax guy, so right now I can't see it what's on each line but putting max in an IRA account he said it lowered my taxes significantly.  So, I need to open an IRA.  What I gathered here is that I should go with Vanguard and invest in Total Stock Market Fund (VTSMX).  I would put $11000 ($5500 for 2017 and $5500 for 2018). Does this make sense?

Sounds great! Assuming you open a 'Traditional' IRA the 2017 contribution will lower your taxable income for last year by $5,500 and the 2018 contribution will do the same for this year.  If you're in the 2017 25% and the 2018 22% bracket, those contributions will give you immediate savings of $1,375 and $ $1,210 respectively, not counting any money they give you through investment gains. You may benefit even further if the reduction in your AGI makes you eligible for other tax credits, although that's more difficult to predict and not really worth getting into at this stage.
Yes, I'm thinking of opening traditional IRA.  My tax guy already figured that in so I need to do it.   So I will contribute $11000 right away.  I still have about $20000 to invest in something.  I understand the difference between traditional and Roth but still don't know which one is better for me.  Does having both ever make sense?
Title: Re: What to do with my money?
Post by: Catica on March 26, 2018, 05:25:00 PM
OK, I had my taxes done over the weekend.  I will get them by mail soon from my tax guy, so right now I can't see it what's on each line but putting max in an IRA account he said it lowered my taxes significantly.  So, I need to open an IRA.  What I gathered here is that I should go with Vanguard and invest in Total Stock Market Fund (VTSMX).  I would put $11000 ($5500 for 2017 and $5500 for 2018). Does this make sense?
VTSMX is investor class shares (minimum $3,000 initial investment, 0.15% ER). If you're investing $10,000 or more you want admiral class shares (VTSAX - 0.04% ER). If your taxes were filled out with the maximum IRA contribution, then you do need to open that IRA and fund at least the $5500 for 2017 (funding all or part of the $5500 for 2018 is optional - it won't affect your 2017 taxes). If you're comfortable with putting away $11,000 for retirement right now, I'd go ahead and max 2017 and 2018 IRA right away.
Yes, I'm going to max out my IRA for 2017 and 2018 right away and invest in VTSAX as you suggested.  I do wonder what to do going forward.  Do I continue having my employer contribute to TIAA or should the future contributions go to Vanguard?  Maybe that depends what investing options I would have at Vanguard through my employer?  If I can't afford to max out my 403b, do I put as much as can into it or do I max out my IRA first and then depending if I have any money left put into my 403b?  Or perhaps I live off the $30000 I have in the bank but max out both of my accounts for the year (403b and IRA)?  And do I keep my money in 403b at TIAA or do I rollover to my new Vanguard IRA?
Title: Re: What to do with my money?
Post by: Rob_bob on March 26, 2018, 05:34:20 PM
Having both makes sense when you have contributed the max amount to all of your tax deductible accounts. 

Also when you reach age 70.5 the Government will make you withdraw a certain % from your tax deductible accounts even if you don't need or want to take it out.  It will be taxable income and could push you into a higher tax bracket.  If you take a bunch out to buy a car etc. it will increase your income and you will pay more taxes.  It may also cause your medicare premium to increase.

There are no requirements to take money out of a Roth at any age.  The money you take out does not add to your taxable income and you are not taxed on it. I like that.

Title: Re: What to do with my money?
Post by: Catica on March 26, 2018, 05:53:25 PM
Having both makes sense when you have contributed the max amount to all of your tax deductible accounts. 

Also when you reach age 70.5 the Government will make you withdraw a certain % from your tax deductible accounts even if you don't need or want to take it out.  It will be taxable income and could push you into a higher tax bracket.  If you take a bunch out to buy a car etc. it will increase your income and you will pay more taxes.  It may also cause your medicare premium to increase.

There are no requirements to take money out of a Roth at any age.  The money you take out does not add to your taxable income and you are not taxed on it. I like that.
I see, so Roth not really for me since I'm not maxing out my tax deductible accounts.
Title: Re: What to do with my money?
Post by: MDM on March 26, 2018, 06:37:53 PM
Yes, I'm thinking of opening traditional IRA.  My tax guy already figured that in so I need to do it.   So I will contribute $11000 right away.  I still have about $20000 to invest in something.  I understand the difference between traditional and Roth but still don't know which one is better for me.  Does having both ever make sense?
See Traditional versus Roth - Bogleheads (https://www.bogleheads.org/wiki/Traditional_versus_Roth) for what may be the most accurate treatment.  Not necessarily the easiest read, but give it a shot....
Title: Re: What to do with my money?
Post by: Catica on March 27, 2018, 05:04:09 AM
Yes, I'm thinking of opening traditional IRA.  My tax guy already figured that in so I need to do it.   So I will contribute $11000 right away.  I still have about $20000 to invest in something.  I understand the difference between traditional and Roth but still don't know which one is better for me.  Does having both ever make sense?
See Traditional versus Roth - Bogleheads (https://www.bogleheads.org/wiki/Traditional_versus_Roth) for what may be the most accurate treatment.  Not necessarily the easiest read, but give it a shot....
Thanks, I just read this.  What I understand from this is that if my marginal tax rate is lower now than what it will be when I retire then Roth makes more sense than traditional IRA.  What I don't understand is what if my tax rate changes each year?  Sometimes I make more one year sometimes less and my marginal rate changes from year to year.  I don't know if my logic is right, but wouldn't I want both traditional and Roth, so the year my rate let's say is 15% I contribute to Roth and the year it is more than 15% I contribute to traditional?  Is this wrong way of doing it?
Title: Re: What to do with my money?
Post by: robartsd on March 27, 2018, 08:37:44 AM
If your tax return included an IRA contribution to save on taxes, that probably means it was a traditional IRA. You'll need to open a traditional IRA and fully fund 2017 to match your tax documents. You can choose to add a Roth IRA later if you feel it makes sense for your financial situation. Having some Roth savings is nice for withdraw flexibility, but most often the numbers work out such that a Roth is not the most tax efficient vehicle.
Title: Re: What to do with my money?
Post by: Catica on March 27, 2018, 09:26:51 AM
If your tax return included an IRA contribution to save on taxes, that probably means it was a traditional IRA. You'll need to open a traditional IRA and fully fund 2017 to match your tax documents. You can choose to add a Roth IRA later if you feel it makes sense for your financial situation. Having some Roth savings is nice for withdraw flexibility, but most often the numbers work out such that a Roth is not the most tax efficient vehicle.
Yes, I know it was traditional IRA, because that's what I told my tax guy and that's the only way I would have been able to deduct it from my taxes, but I think I would have qualified for a lower tax rate without that IRA contribution (I had a lot of deductions) and that's why I'm deliberating whether Roth IRA would have been a better option. 
Title: Re: What to do with my money?
Post by: MDM on March 27, 2018, 09:55:30 AM
Thanks, I just read this.  What I understand from this is that if my marginal tax rate is lower now than what it will be when I retire then Roth makes more sense than traditional IRA.  What I don't understand is what if my tax rate changes each year?  Sometimes I make more one year sometimes less and my marginal rate changes from year to year.  I don't know if my logic is right, but wouldn't I want both traditional and Roth, so the year my rate let's say is 15% I contribute to Roth and the year it is more than 15% I contribute to traditional?  Is this wrong way of doing it?
You have that exactly right.  The strategy of "some years Roth will be preferable, while other years traditional will be preferable" is excellent, but seemingly overlooked by many.

You absolutely may have money in both Roth and traditional accounts, so go ahead and choose each year which seems better.

Of course, there is still the guesswork of "what will the marginal rate be when in retirement?"  One should take one's best guess and act accordingly. 

It's entirely possible that some years you may guess wrong, and be suboptimal by a few percent.  In most of those cases, either traditional or Roth will still be better than if you had invested in a taxable account - and definitely better than if you had not invested at all!
Title: Re: What to do with my money?
Post by: Catica on March 27, 2018, 01:37:19 PM
Thanks, I just read this.  What I understand from this is that if my marginal tax rate is lower now than what it will be when I retire then Roth makes more sense than traditional IRA.  What I don't understand is what if my tax rate changes each year?  Sometimes I make more one year sometimes less and my marginal rate changes from year to year.  I don't know if my logic is right, but wouldn't I want both traditional and Roth, so the year my rate let's say is 15% I contribute to Roth and the year it is more than 15% I contribute to traditional?  Is this wrong way of doing it?
You have that exactly right.  The strategy of "some years Roth will be preferable, while other years traditional will be preferable" is excellent, but seemingly overlooked by many.

You absolutely may have money in both Roth and traditional accounts, so go ahead and choose each year which seems better.

Of course, there is still the guesswork of "what will the marginal rate be when in retirement?"  One should take one's best guess and act accordingly. 

It's entirely possible that some years you may guess wrong, and be suboptimal by a few percent.  In most of those cases, either traditional or Roth will still be better than if you had invested in a taxable account - and definitely better than if you had not invested at all!
OK, so the only thing I'm regretting (perhaps there is not reason to regret, I'm not sure) is that if the tIRA reduction had no impact on my margin tax rate this year perhaps I should have put that money in Roth rather than in traditional.  But it did lower how much in taxes I owe so maybe I should not be regretting it?
Title: Re: What to do with my money?
Post by: MDM on March 27, 2018, 01:51:21 PM
OK, so the only thing I'm regretting (perhaps there is not reason to regret, I'm not sure) is that if the tIRA reduction had no impact on my margin tax rate this year perhaps I should have put that money in Roth rather than in traditional.  But it did lower how much in taxes I owe so maybe I should not be regretting it?
Having no impact on the marginal rate itself is no problem.  In simplified terms, the only time a tIRA contribution will change the marginal rate is when it moves you from one tax bracket to another. 

It's the value of the marginal rate now, vs. the value of the marginal rate when you withdraw later, that decides whether traditional or Roth is better.
Title: Re: What to do with my money?
Post by: Catica on March 27, 2018, 02:02:23 PM
OK, so the only thing I'm regretting (perhaps there is not reason to regret, I'm not sure) is that if the tIRA reduction had no impact on my margin tax rate this year perhaps I should have put that money in Roth rather than in traditional.  But it did lower how much in taxes I owe so maybe I should not be regretting it?
Having no impact on the marginal rate itself is no problem.  In simplified terms, the only time a tIRA contribution will change the marginal rate is when it moves you from one tax bracket to another. 

It's the value of the marginal rate now, vs. the value of the marginal rate when you withdraw later, that decides whether traditional or Roth is better.
I understand that.  My regret is that I would be in 15% marginal rate regardless of my $5500 tIRA contribution so I should have put that $5500 in Roth instead. 
Title: Re: What to do with my money?
Post by: MDM on March 27, 2018, 02:09:19 PM
I understand that.  My regret is that I would be in 15% marginal rate regardless of my $5500 tIRA contribution so I should have put that $5500 in Roth instead.
Maybe, maybe not.

Because you don't have a pension, see the table in cells Calculations!T2:U11 of the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).  Using today's tax rates, you will need >$1.2 million in your traditional accounts before a 4% withdrawal rate in retirement alone would cause you to pay more than 15%.

Is there a concern that you will have too much in the traditional accounts?
Title: Re: What to do with my money?
Post by: robartsd on March 27, 2018, 02:33:35 PM
OK, so the only thing I'm regretting (perhaps there is not reason to regret, I'm not sure) is that if the tIRA reduction had no impact on my margin tax rate this year perhaps I should have put that money in Roth rather than in traditional.  But it did lower how much in taxes I owe so maybe I should not be regretting it?
I don't think you quite understand how marginal tax rates work. Your marginal tax rate is the tax rate you pay on your "last dollar earned" for the year. Tax deductible IRA contributions lower the amount of earnings you pay taxes on, so they only affect your marginal tax rate when they move you over a tax bracket threshold. Most of the time IRA contributions will just save you taxes based on your marginal tax rate. $5500 saves you $825 in the 15% bracket or $1375 in the 25% bracket. If your earnings just barely put you over the threshold for a tax bracket then an IRA contribution can change your marginal tax rate. Say you earn enough that before IRA contributions you are $1000 over the 25% threshold. Contributing $1000 would save you $250 on taxes. Contributing $1000 more would only save you $150 more on taxes because your marginal tax rate for that $1000 would be 15%. If your contributions did change your marginal tax rate, there might be reason to regret not splitting between traditional and Roth because the last dollar you contributed didn't save you as much on taxes as the first dollar contributed did. Not changing your marginal tax rate is not a reason to regret deciding to make traditional IRA contributions (the marginal tax rate being low might be).

It's the value of the marginal rate now, vs. the value of the marginal rate when you withdraw later, that decides whether traditional or Roth is better.
Remember, until RMDs hit you are in control of the marginal rate when you withdraw (by choosing when to withdraw and how much). If there is a 15% marginal rate when you withdraw and you withdraw enough to get to the very top of that bracket you win - because some of that money was withdrawn in lower brackets. You can even win if a small amount of the money is taxed at a higher marginal rate because some of it would be taxed at a lower rate keeping the effective tax rate on the withdraw below the marginal tax rate of the contribution (you could do slightly better in this case by splitting the contribution between Roth and traditional).
Title: Re: What to do with my money?
Post by: MDM on March 27, 2018, 02:49:21 PM
...keeping the effective tax rate on the withdraw below the marginal tax rate of the contribution....
Every new contribution gets withdrawn at the marginal rate on top of withdrawals based on previous contributions.  The use of effective withdrawal rate for comparison is not correct.

This comparison does pop up from time to time, unfortunately, but it is not a correct one for the purpose of making annual choices.

E.g., see the main reason to prefer one type of account over the other is the comparison of marginal tax rates (https://www.bogleheads.org/wiki/Traditional_versus_Roth#Taxes).
Title: Re: What to do with my money?
Post by: Rob_bob on March 27, 2018, 03:13:17 PM
Also remember if you do open a Roth your total contribution to all of your IRA's for the year is $5500.  You can't put $5500 into a tIRA and $5500 into the Roth.  You can divide that $5500 any way you like between the two types of accounts.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 04:58:44 AM
I understand that.  My regret is that I would be in 15% marginal rate regardless of my $5500 tIRA contribution so I should have put that $5500 in Roth instead.
Maybe, maybe not.

Because you don't have a pension, see the table in cells Calculations!T2:U11 of the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/).  Using today's tax rates, you will need >$1.2 million in your traditional accounts before a 4% withdrawal rate in retirement alone would cause you to pay more than 15%.

Is there a concern that you will have too much in the traditional accounts?
Thanks for clarifying.  I will not have that much money in my traditional account.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 05:00:22 AM
OK, so the only thing I'm regretting (perhaps there is not reason to regret, I'm not sure) is that if the tIRA reduction had no impact on my margin tax rate this year perhaps I should have put that money in Roth rather than in traditional.  But it did lower how much in taxes I owe so maybe I should not be regretting it?
I don't think you quite understand how marginal tax rates work. Your marginal tax rate is the tax rate you pay on your "last dollar earned" for the year. Tax deductible IRA contributions lower the amount of earnings you pay taxes on, so they only affect your marginal tax rate when they move you over a tax bracket threshold. Most of the time IRA contributions will just save you taxes based on your marginal tax rate. $5500 saves you $825 in the 15% bracket or $1375 in the 25% bracket. If your earnings just barely put you over the threshold for a tax bracket then an IRA contribution can change your marginal tax rate. Say you earn enough that before IRA contributions you are $1000 over the 25% threshold. Contributing $1000 would save you $250 on taxes. Contributing $1000 more would only save you $150 more on taxes because your marginal tax rate for that $1000 would be 15%. If your contributions did change your marginal tax rate, there might be reason to regret not splitting between traditional and Roth because the last dollar you contributed didn't save you as much on taxes as the first dollar contributed did. Not changing your marginal tax rate is not a reason to regret deciding to make traditional IRA contributions (the marginal tax rate being low might be).
Yes, I get it!  Thanks
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 05:03:09 AM
Also remember if you do open a Roth your total contribution to all of your IRA's for the year is $5500.  You can't put $5500 into a tIRA and $5500 into the Roth.  You can divide that $5500 any way you like between the two types of accounts.
Yes, I understand that.  I didn't mean to open and contribute to both Roth and tIRA in the same year.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 05:08:00 AM
I just opened tIRA at Vanguard waiting for the money from the bank to transfer over in the next few days.  So I'm all set with that.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 09:27:04 AM
My next step is to contribute more to my 403b.  The question I have is whether I should stick with TIAA or have my future contributions go to Vanguard 403b, my employer offers that option.
Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 09:36:56 AM
My next step is to contribute more to my 403b.  The question I have is whether I should stick with TIAA or have my future contributions go to Vanguard 403b, my employer offers that option.
In general, it is likely that Vanguard's offerings will cost you less and perform at least as well as TIAA's.

But there is still the very real possibility that the fees charged within the 403b account are higher than one would pay in an IRA.  Really do need the specifics of the 403b plan.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 09:48:58 AM
My next step is to contribute more to my 403b.  The question I have is whether I should stick with TIAA or have my future contributions go to Vanguard 403b, my employer offers that option.
In general, it is likely that Vanguard's offerings will cost you less and perform at least as well as TIAA's.

But there is still the very real possibility that the fees charged within the 403b account are higher than one would pay in an IRA.  Really do need the specifics of the 403b plan.
Ok what specifically do you need and I will give it all to you?
Title: Re: What to do with my money?
Post by: robartsd on March 28, 2018, 09:51:33 AM
...keeping the effective tax rate on the withdraw below the marginal tax rate of the contribution....
Every new contribution gets withdrawn at the marginal rate on top of withdrawals based on previous contributions.  The use of effective withdrawal rate for comparison is not correct.

This comparison does pop up from time to time, unfortunately, but it is not a correct one for the purpose of making annual choices.

E.g., see the main reason to prefer one type of account over the other is the comparison of marginal tax rates (https://www.bogleheads.org/wiki/Traditional_versus_Roth#Taxes).
Yes that's why I included my parenthetical comment:
(you could do slightly better in this case by splitting the contribution between Roth and traditional)

If you only ever do one type (traditional or Roth), comparing the marginal tax rate to the effective tax rate will determine which is the most tax efficient. If you split contributions between traditional and Roth the comparison is between marginal tax rate of each contribution and marginal tax rate of each withdraw.
Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 10:08:47 AM
My next step is to contribute more to my 403b.  The question I have is whether I should stick with TIAA or have my future contributions go to Vanguard 403b, my employer offers that option.
In general, it is likely that Vanguard's offerings will cost you less and perform at least as well as TIAA's.

But there is still the very real possibility that the fees charged within the 403b account are higher than one would pay in an IRA.  Really do need the specifics of the 403b plan.
Ok what specifically do you need and I will give it all to you?
Every investment option you have in the 403b: ticker symbol, description, and fee charged.  E.g., from Do I need to change anything? - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=1&t=245380):

Fund Name: CREF Money Market Account (R3), Ticker symbol: QCMMIX, Expense ratio: 0.23%
Fund name: CREF Stock Account (R3), Ticker symbol: QCSTIX, Expense ratio: 0.32%
Fund name: TIAA Real Estate Account, Ticker symbol: QREARX, Expense ratio: 0.85%
Fund name: TIAA-CREF International Equity Fund (Institutional), Ticker symbol: TIIEX, Expense ratio: 0.49%
Fund name: TIAA-CREF Lifecycle Index Retirement Income Fund (Institutional), Ticker symbol: TRILX, Expense ratio: 0.10%
Fund name: TIAA-CREF Mid-Cap Value Fund (Institutional), Ticker symbol: TIMVX, Expense ratio: 0.41%
Fund name: TIAA-CREF S&P 500 Index Fund (Institutional), Ticker symbol: TISPX, Expense ratio: 0.06%

If you have what is sometimes called a "brokerage option", cut&paste or scan the description of that.
Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 10:12:43 AM
If you only ever do one type (traditional or Roth), comparing the marginal tax rate to the effective tax rate will determine which is the most tax efficient. If you split contributions between traditional and Roth the comparison is between marginal tax rate of each contribution and marginal tax rate of each withdraw.
Agreed.

Fortunately, one doesn't have to make an irrevocable lifetime choice of traditional vs. Roth.  Given the ease with which one can change from year to year, any mention of effective rate is misleading at best.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 01:31:32 PM
My next step is to contribute more to my 403b.  The question I have is whether I should stick with TIAA or have my future contributions go to Vanguard 403b, my employer offers that option.
In general, it is likely that Vanguard's offerings will cost you less and perform at least as well as TIAA's.

But there is still the very real possibility that the fees charged within the 403b account are higher than one would pay in an IRA.  Really do need the specifics of the 403b plan.
Ok what specifically do you need and I will give it all to you?
Every investment option you have in the 403b: ticker symbol, description, and fee charged.  E.g., from Do I need to change anything? - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=1&t=245380):

Fund Name: CREF Money Market Account (R3), Ticker symbol: QCMMIX, Expense ratio: 0.23%
Fund name: CREF Stock Account (R3), Ticker symbol: QCSTIX, Expense ratio: 0.32%
Fund name: TIAA Real Estate Account, Ticker symbol: QREARX, Expense ratio: 0.85%
Fund name: TIAA-CREF International Equity Fund (Institutional), Ticker symbol: TIIEX, Expense ratio: 0.49%
Fund name: TIAA-CREF Lifecycle Index Retirement Income Fund (Institutional), Ticker symbol: TRILX, Expense ratio: 0.10%
Fund name: TIAA-CREF Mid-Cap Value Fund (Institutional), Ticker symbol: TIMVX, Expense ratio: 0.41%
Fund name: TIAA-CREF S&P 500 Index Fund (Institutional), Ticker symbol: TISPX, Expense ratio: 0.06%

If you have what is sometimes called a "brokerage option", cut&paste or scan the description of that.
How is this?
        INVESTMENT NAME
     
        TICKER
     
        EXPENSE RATIO
     
       CREF Money Market Account (R3)
     
        QCMMIX
     
        0.23%
     
        CREF Stock Account (R3)
     
        QCSTIX
     
        0.32%
     
        TIAA-CREF Bond Index Fund (Institutional)
     
        TBIIX
     
        0.12%
     
        TIAA-CREF Equity Index Fund (Institutional)
     
        TIEIX
     
        0.05%
     
        TIAA-CREF International Equity Index Fund (Institutional)
     
        TCIEX
     
        0.06%
     
        TIAA-CREF Lifecycle Index 2010 Fund (Institutional)
     
        TLTIX
     
        0.26%
     
        TIAA-CREF Lifecycle Index 2015 Fund (Institutional)
     
        TLFIX
     
        0.24%
     
        TIAA-CREF Lifecycle Index 2020 Fund (Institutional)
     
        TLWIX
     
        0.22%
     
        TIAA-CREF Lifecycle Index 2025 Fund (Institutional)
     
        TLQIX
     
        0.22%
     
        TIAA-CREF Lifecycle Index 2030 Fund (Institutional)
     
        TLHIX
     
        0.21%
     
        TIAA-CREF Lifecycle Index 2035 Fund (Institutional)
     
        TLYIX
     
        0.21%
     
        TIAA-CREF Lifecycle Index 2040 Fund (Institutional)
     
        TLZIX
     
        0.20%
     
        TIAA-CREF Lifecycle Index 2045 Fund (Institutional)
     
        TLXIX
     
        0.21%
     
        TIAA-CREF Lifecycle Index 2050 Fund (Institutional)
     
        TLLIX
     
        0.22%
     
        TIAA-CREF Lifecycle Index 2055 Fund (Institutional)
     
        TTIIX
     
        0.31%
     
        TIAA-CREF Lifecycle Index 2060 Fund (Institutional)
     
        TVIIX
     
        1.00%
     
        TIAA-CREF Lifecycle Index Retirement Income Fund (Institutional)
     
        TRILX
     
        0.37%
     
        TIAA-CREF Money Market Fund (Institutional)
     
        TCIXX
     
        0.14%
     
Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 02:04:08 PM
If you have what is sometimes called a "brokerage option", cut&paste or scan the description of that.
How is this?
<snip>
Excellent!

You could do a three-fund portfolio (https://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style) with your desired mix of
TIAA-CREF Bond Index Fund (Institutional) TBIIX 0.12%
TIAA-CREF Equity Index Fund (Institutional) TIEIX 0.05%
TIAA-CREF International Equity Index Fund (Institutional) TCIEX 0.06% 

Or, for slightly higher cost but "hands off" investing, one of the Lifecycle Index Funds (in particular, one in the 2030 - 2050 range).

No mention of Vanguard funds...?
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 02:06:34 PM
If you have what is sometimes called a "brokerage option", cut&paste or scan the description of that.
How is this?
<snip>
Excellent!

You could do a three-fund portfolio (https://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style) with your desired mix of
TIAA-CREF Bond Index Fund (Institutional) TBIIX 0.12%
TIAA-CREF Equity Index Fund (Institutional) TIEIX 0.05%
TIAA-CREF International Equity Index Fund (Institutional) TCIEX 0.06% 

Or, for slightly higher cost but "hands off" investing, one of the Lifecycle Index Funds (in particular, one in the 2030 - 2050 range).

No mention of Vanguard funds...?
You want exactly the same for Vanguard?  If so I don't know if I can get that not having a 403b with them.  Let me see what I can find out
Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 02:13:30 PM
You want exactly the same for Vanguard?  If so I don't know if I can get that not having a 403b with them.  Let me see what I can find out
If you have access to the whole family of Vanguard funds, at the same prices one can find on the Vanguard web site, there is no need to reproduce that.  What would be interesting is the exact language your benefits department uses to tell you that you have that access.

Is it only the listed TIAA funds, and Vanguard, to which you have access?  Here also, the exact language your benefits department uses to describe your options would be useful.

It is possible that your 403b plan is much better than most - just asking for the specifics to confirm whether that is true.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 02:29:48 PM
OK, because I had Vanguard in the past and I rolled over to TIAA at some point, I can still see the 403b plan in Vanguard (which is $0 right now) and the funds that are available to me:

        INVESTMENT NAME
     
        TICKER
     
        EXPENSE RATIO
     
        Vanguard Federal Money Market Fund
     
        VMFXX
     
   
     
        Vanguard Institutional Target Retirement 2015 Fund

     
        VITVX
     
   
     
        Vanguard Institutional Target Retirement 2020 Fund
     
        VITWX
     

     
        Vanguard Institutional Target Retirement 2025 Fund
     
        VRIVX
     

     
        Vanguard Institutional Target Retirement 2030 Fund
     
        VTTWX
     

     
        Vanguard Institutional Target Retirement 2035 Fund
     
        VITFX
     

     
        Vanguard Institutional Target Retirement 2040 Fund
     
        VIRSX
     

     
        Vanguard Institutional Target Retirement 2045 Fund
     
        VITLX
     

     
        Vanguard Institutional Target Retirement 2050 Fund
     
        VTRLX
     
 
     
        Vanguard Institutional Target Retirement 2055 Fund
     
        VIVLX
     

     
        Vanguard Institutional Target Retirement 2060 Fund
     
        VILVX
     

     
        Vanguard Institutional Target Retirement 2065 Fund
     
        VSXFX
     

     
        Vanguard Institutional Target Retirement Income Fund
     
        VITRX
     

     
        Vanguard Total Bond Market Index Fund Institutional Shares
     
        VBTIX
     

     
        Vanguard Total International Stock Index Fund Institutional Shares
     
        VTSNX
     

     
        Vanguard Total Stock Market Index Fund Institutional Plus Shares
     
        VSMPX
     

     

In my retirement portal I see the following:

STAFF RETIREMENT PLAN
Choose the financial institution(s)* for this plan:
Fidelity  TIAA-CREF  Vanguard
Choose how you would like to allocate your contributions:
TIAA-CREF 100%

Total 100% (must equal 100%)

TDA Plan

Percentage elections will be applied to all your eligible pay each pay period. Flat dollar elections will be taken from the eligible pay on the paycheck associated with your Primary Job.
You are eligible to make voluntary (employee only, tax-deferred) contributions. The maximum amount you may contribute is $18,500 for this calendar year. This maximum amount may be reduced to comply with IRS limits.

Allocate my contributions like this:
Enter pre-tax amount and roth amount:

Pre-tax:
Roth:

Total $100.00(must equal $100.00)


Choose the financial institution(s)* for this plan:
Fidelity  TIAA-CREF  Vanguard
Choose how you would like to allocate your contributions:
TIAA-CREF 100%

Total 100% (must equal 100%)


Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 02:41:06 PM
OK, because I had Vanguard in the past and I rolled over to TIAA at some point, I can still see the 403b plan in Vanguard (which is $0 right now) and the funds that are available to me:<snip>
It appears you do have options better than most.

Do you have the fees charged for the Vanguard (and/or Fidelity) funds?

It would be worthwhile to ask your benefits department for more details about what exactly the "STAFF RETIREMENT PLAN" and "TDA Plan" are.  E.g., are they both 403b plans, or is one a 401k, or a 457, or a Non-Qualified Deferred Compensation, or...?

Also, does "The maximum amount you may contribute is $18,500 for this calendar year" apply only to the TDA Plan, or is that $18,500 to each, or $18,500 total, or...?

Might also be worthwhile to ask your benefits department "do you have some communication that explains all this?" because from what you have shared, it doesn't appear they make it easy for folks to understand.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 03:13:41 PM
OK, because I had Vanguard in the past and I rolled over to TIAA at some point, I can still see the 403b plan in Vanguard (which is $0 right now) and the funds that are available to me:<snip>
It appears you do have options better than most.

Do you have the fees charged for the Vanguard (and/or Fidelity) funds?

It would be worthwhile to ask your benefits department for more details about what exactly the "STAFF RETIREMENT PLAN" and "TDA Plan" are.  E.g., are they both 403b plans, or is one a 401k, or a 457, or a Non-Qualified Deferred Compensation, or...?

Also, does "The maximum amount you may contribute is $18,500 for this calendar year" apply only to the TDA Plan, or is that $18,500 to each, or $18,500 total, or...?

Might also be worthwhile to ask your benefits department "do you have some communication that explains all this?" because from what you have shared, it doesn't appear they make it easy for folks to understand.
Ok, I just talked to them and I have a PDF that has all the fees.  I can't understand that document.  How can I show it to you?
The difference between the STAFF RETIREMENT PLAN and TDA is only that the employer wants to keep their contribution separate from my contribution.
The $18,500 apply only to the TDA Plan.
Title: Re: What to do with my money?
Post by: robartsd on March 28, 2018, 03:47:21 PM
If it is less than 4 MB you can probably just attach it to a post (see "Attachments and other options") on the post reply page.
Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 03:47:33 PM
Ok, I just talked to them and I have a PDF that has all the fees.  I can't understand that document.  How can I show it to you?
A few options:
1) If you don't mind sharing it "as is", you can attach it to a post: click on the plus sign next to "Attachments and other options".
2) If you would prefer to exclude any part of it, then see
How to add image to post? (https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-add-image-to-post/) or
Posting images in the Bogleheads forum - Bogleheads (https://www.bogleheads.org/wiki/Posting_images_in_the_Bogleheads_forum) for ideas (both Bogleheads and MMM work with the img tags).

Screen capture tool for Windows ó Postimage.org (http://postimages.org/app) has worked, but there are other tools that may work just as well.

Quote
The difference between the STAFF RETIREMENT PLAN and TDA is only that the employer wants to keep their contribution separate from my contribution.
The $18,500 apply only to the TDA Plan.
Ok, now that part makes sense.
Title: Re: What to do with my money?
Post by: Catica on March 28, 2018, 09:35:28 PM
Ok, I just talked to them and I have a PDF that has all the fees.  I can't understand that document.  How can I show it to you?
A few options:
1) If you don't mind sharing it "as is", you can attach it to a post: click on the plus sign next to "Attachments and other options".
2) If you would prefer to exclude any part of it, then see
How to add image to post? (https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-add-image-to-post/) or
Posting images in the Bogleheads forum - Bogleheads (https://www.bogleheads.org/wiki/Posting_images_in_the_Bogleheads_forum) for ideas (both Bogleheads and MMM work with the img tags).

Screen capture tool for Windows ó Postimage.org (http://postimages.org/app) has worked, but there are other tools that may work just as well.

Quote
The difference between the STAFF RETIREMENT PLAN and TDA is only that the employer wants to keep their contribution separate from my contribution.
The $18,500 apply only to the TDA Plan.
Ok, now that part makes sense.
here it is
Title: Re: What to do with my money?
Post by: MDM on March 28, 2018, 11:54:31 PM
here it is
Wow!  That's an excellent plan!

If you don't mind telling, is this a K-12 school district, or a university, or a hospital, or...?

You almost have to try hard to do something wrong with those choices.

I might suggest one of the Vanguard Target Retirement Funds (https://investor.vanguard.com/mutual-funds/target-retirement/#/), but only because I'm more familiar with them.

See the three-fund portfolio (https://www.bogleheads.org/wiki/Three-fund_portfolio) wiki article, and the articles linked there on TIAA, Fidelity, and Vanguard, and go with whatever seems best to you.  Again, whoever arranged this plan did very well on behalf of the employees so take advantage!

The ticker symbols in the wiki article may not match what you have, because the wiki assumes "normal" fund classes and you have "institutional" class funds - better than an individual can get in an IRA.
Title: Re: What to do with my money?
Post by: Catica on March 29, 2018, 08:02:00 AM
here it is
Wow!  That's an excellent plan!

If you don't mind telling, is this a K-12 school district, or a university, or a hospital, or...?

You almost have to try hard to do something wrong with those choices.

I might suggest one of the Vanguard Target Retirement Funds (https://investor.vanguard.com/mutual-funds/target-retirement/#/), but only because I'm more familiar with them.

See the three-fund portfolio (https://www.bogleheads.org/wiki/Three-fund_portfolio) wiki article, and the articles linked there on TIAA, Fidelity, and Vanguard, and go with whatever seems best to you.  Again, whoever arranged this plan did very well on behalf of the employees so take advantage!

The ticker symbols in the wiki article may not match what you have, because the wiki assumes "normal" fund classes and you have "institutional" class funds - better than an individual can get in an IRA.
It's university.
OK, I read the wiki article and need to reread it as it's not totally clear to me.  That's because I don't know what I want, how much in stocks, how much in bonds, mutual funds etc.  I don't totally know the good and the bad of each, I guess I need to read and learn the basics.
Would there be a reason to split my contributions between different investment firms?  I do have such option.  Also, do I keep my existing 403b in TIAA or move it?  I can also invest the employer's contribution differently than my contribution.  So I'm not sure how to proceed with that.
Title: Re: What to do with my money?
Post by: robartsd on March 29, 2018, 11:59:32 AM
To build a 3-fund portfolio:
TIAA: TCIEX (foreign.06% ER), TIEIX (US .05% ER), and TBIIX (US Bonds .12% ER).
Fidelity: FSPNX (foreign .06% ER), FSKTX (US .04% ER), and FSXTX (US Bonds .04% ER).
Vangaurd: VTSNX (foreign .09% ER), VSMPX (US .02% ER), and VBTIX (US Bonds .04% ER).

Unfortunately your plan document doesn't list a value for TIAA's administration fees - only that the costs are distributed uniformly across participants. Vangaurd's admin fee is $34/yr, Fidelity's is $9.25/quarter ($37/yr). Of course as your account grows administration fees become less important and expense ratios become more important. With a balance over $200,000 a .01% difference in expense ratio is over $20; so Vanguard's savings in expense ratio is probably worth the admin fee for you even if TIAA had $0 admin fee.

If you want heavy foreign exposure (more than 40% of your equities), Fidelity might be best, otherwise Vanguard looks the best. Vanguard also looks the best for target date fund gross expense ratios.
Title: Re: What to do with my money?
Post by: Catica on March 29, 2018, 06:51:25 PM
To build a 3-fund portfolio:
TIAA: TCIEX (foreign.06% ER), TIEIX (US .05% ER), and TBIIX (US Bonds .12% ER).
Fidelity: FSPNX (foreign .06% ER), FSKTX (US .04% ER), and FSXTX (US Bonds .04% ER).
Vangaurd: VTSNX (foreign .09% ER), VSMPX (US .02% ER), and VBTIX (US Bonds .04% ER).

Unfortunately your plan document doesn't list a value for TIAA's administration fees - only that the costs are distributed uniformly across participants. Vangaurd's admin fee is $34/yr, Fidelity's is $9.25/quarter ($37/yr). Of course as your account grows administration fees become less important and expense ratios become more important. With a balance over $200,000 a .01% difference in expense ratio is over $20; so Vanguard's savings in expense ratio is probably worth the admin fee for you even if TIAA had $0 admin fee.

If you want heavy foreign exposure (more than 40% of your equities), Fidelity might be best, otherwise Vanguard looks the best. Vanguard also looks the best for target date fund gross expense ratios.

Thanks.  Would you do this just for new contributions or would you transfer the existing 403b from TIAA to Vanguard?
Title: Re: What to do with my money?
Post by: robartsd on March 30, 2018, 02:39:17 PM
I would transfer existing to Vanguard so you don't have to pay administrative fees to both Vanguard and TIAA.
Title: Re: What to do with my money?
Post by: Catica on March 30, 2018, 09:39:54 PM
I would transfer existing to Vanguard so you don't have to pay administrative fees to both Vanguard and TIAA.
How does the transfer work?  Does it go to my tIRA or will it be a separate plan?
Title: Re: What to do with my money?
Post by: robartsd on April 02, 2018, 01:49:57 PM
I would transfer existing to Vanguard so you don't have to pay administrative fees to both Vanguard and TIAA.
How does the transfer work?  Does it go to my tIRA or will it be a separate plan?
You'll have to check with your benefits administrator at work, but most likely if you are able to do an in-service rollover from TIAA to Vangaurd it would be from 403b to 403b (but we've already seen that your plan is better than most). Let them know that you like the 403b investment options at Vanguard better and that you'd like to switch to Vanguard moving your existing funds. They should be able to help you set that up.
Title: Re: What to do with my money?
Post by: Catica on April 03, 2018, 09:14:43 AM
I would transfer existing to Vanguard so you don't have to pay administrative fees to both Vanguard and TIAA.
How does the transfer work?  Does it go to my tIRA or will it be a separate plan?
You'll have to check with your benefits administrator at work, but most likely if you are able to do an in-service rollover from TIAA to Vangaurd it would be from 403b to 403b (but we've already seen that your plan is better than most). Let them know that you like the 403b investment options at Vanguard better and that you'd like to switch to Vanguard moving your existing funds. They should be able to help you set that up.
Great, thank you.  I'll do that.
Title: Re: What to do with my money?
Post by: OurTown on April 03, 2018, 01:34:44 PM
This is great, what a fantastic and charitable community!  Catica, I hope you realize you are getting invaluable advice here free or charge. 
Title: Re: What to do with my money?
Post by: Catica on April 03, 2018, 01:57:45 PM
This is great, what a fantastic and charitable community!  Catica, I hope you realize you are getting invaluable advice here free or charge.
Yes, I do realize that and I appreciate all the help I have been given here.  Thank you everyone.