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Help! Overwhelmed with info.
Old 01-08-2014, 09:44 AM   #1
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Help! Overwhelmed with info.

Hi,

Just retired and am moving my 401 from Prudential to Vanguard. It has 105,000. in it. I will not need it for at least 10-15 years so I want it to work for me. In the meantime, we have pensions and are using my husband's IRA to fund the next 10-15 years. We are trying to stay just under the 15% tax level as well.

So, I have tried to figure out all the jargon, but frankly, I taught the arts for a reason. I have no head for numbers, etc....since I am being called by a Vanguard rep. to talk about where to put my money.....where do I start? Can I trust them to give me good advice? It appears, since I have more then 100,000. I get to have their advice for free? What questions should I ask?

My plan was to keep my money in something rather aggressive at least for now. And reassess a couple of times a year. Does that sound solid?

I realize that I am asking advice on something somewhat personal, but any advice is really appreciated.

Thanks, Karen
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Old 01-08-2014, 09:51 AM   #2
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Buy a balanced fund, look at it once a year, come back in a decade. Vanguard has several to choose from and can help you figure out which one would be most appropriate.
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Old 01-08-2014, 09:59 AM   #3
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Hi Karen:

Welcome to the Forum and congrats on the retirement!

I wholly agree with Brewer12345 above. Many folks here use Wellington and/or Wellesley or pick a target date fund.
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Old 01-08-2014, 10:00 AM   #4
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I suggest you read Andrew Hallam's Millionaire Teacher. It's an easy read with negligable math. Jargon is either not used or carefully explained. This is the only book that my DW read and she became all excited. She says she understands asset allocation and index fund investing. I had to buy copies for all of our kids.
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Old 01-08-2014, 10:00 AM   #5
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Quote:
Originally Posted by brewer12345 View Post
Buy a balanced fund, look at it once a year, come back in a decade. Vanguard has several to choose from and can help you figure out which one would be most appropriate.
+1

Excellent advice.
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Old 01-08-2014, 10:06 AM   #6
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Hi Karen:

Welcome to the Forum and congrats on the retirement!

I wholly agree with Brewer12345 above. Many folks here use Wellington and/or Wellesley or pick a target date fund.
Great advice. Don't over complicate it.

Report back Vanguard's recommendations if you want additional perspective, before you jump. Also read / post at the Boglehead's forum for good free advice.
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thanks
Old 01-08-2014, 10:34 AM   #7
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thanks

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Originally Posted by travelover View Post
Great advice. Don't over complicate it.

Report back Vanguard's recommendations if you want additional perspective, before you jump. Also read / post at the Boglehead's forum for good free advice.
I will do just that. And go to that Boglehead's forum. And read that book for Millionaire Teachers.

At this point, I DO want to keep it simple. And frankly, my 401 did well for me during my working life as I didn't even realize I was putting money into it. But now I have the time to really learn more about how this all works, hopefully then I will do better with what I have since I won't be putting anything more into it.

BUT....that brings me to this question. It may sound stupid but:
IF I am only getting a pension at this point, no income from any jobs, can I still put a small amount of that pension money each month into my IRA?

ALSO,,,,is there any advantage to an 403B to an IRA once one is retired and no longer working?

Sorry for the stupid questions. I feel the need to learn as much as I can, as fast as I can. And I need to learn ALOT.

OK, Im going to bogleheads...thanks all. Karen
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Old 01-08-2014, 11:31 AM   #8
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..........
IF I am only getting a pension at this point, no income from any jobs, can I still put a small amount of that pension money each month into my IRA?
You can only contribute to an IRA from earned income. But if one spouse is working, both can contribute if enough is earned to cover both's IRA contributions
Quote:
ALSO,,,,is there any advantage to an 403B to an IRA once one is retired and no longer working?
Depends on the investment options and fees in each. Some 403(b)s have a stable market fund where you can get more earnings on cash right now than in a more risky bond fund. Also you can withdraw from a 403(b) at 55 as opposed to 59 1/2 in an IRA, with out penalty. Depending on state, there are some legal protections for a 403(b) vs an IRA.

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OK, Im going to bogleheads...thanks all. Karen
Good luck.
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Khmmmm
Old 01-08-2014, 12:26 PM   #9
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Khmmmm

Not sure how to respond with quotes but travelover, I am in michigan. How would I find out what my state laws concerning IRA vs 403b are? Also, since I am 60, it doesn't matter about withdrawals. Thanks. Karen
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Old 01-08-2014, 12:48 PM   #10
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Not sure how to respond with quotes but travelover, I am in Michigan. How would I find out what my state laws concerning IRA vs 403b are? Also, since I am 60, it doesn't matter about withdrawals. Thanks. Karen
You might find these links of interest:

Asset protection - Bogleheads

Asset Protection: Concepts & Strategies • View topic - State-By-State Main Creditor-Debtor Exemption Chart


This may not be current per linked site.

Quote:
MICHIGAN
Exemption for Tax-Qualified Retirement Plans, IRAs & Roth IRAs (Note 2): 100% -- Mich. Comp. Laws Ann. 600.5451(1), 600.6023(1)(k). No protection for non-ERISA qualified plans.

Homestead Exemption (Note 3): $30,000 / $45,000 if 65+ or disabled. -- Mich. Comp. Laws Ann. 600.5451(n)

Exemption for Life Insurance Cash Value from Claims of Policyowner's Creditors (Note 4): 100% -- Mich. Comp. Laws Ann. 500.2207

Exemption for (Non-IRA / Non-ERISA) Annuity Cash Value and Payments from Claims of Owner's Creditors (Note 5): 100% -- Mich. Comp. Laws Ann. 500.2207
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Old 01-11-2014, 03:28 AM   #11
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Some 403(b)s have a stable market fund where you can get more earnings on cash right now than in a more risky bond fund.

Good luck.
travelover,

Could you please provide an example of a "stable market fund" you referred to above.

thanks
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Old 01-11-2014, 09:36 AM   #12
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travelover,

Could you please provide an example of a "stable market fund" you referred to above.

thanks
Look at your 401(k) offerings. You should have stock funds, bond funds, some combined funds and something maybe called an interest fund. This would be what I'm calling a stable market fund. Compare the interest that it is paying to what you can get on a bank CD. This fund should be pay higher interest.
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Old 01-11-2014, 03:36 PM   #13
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Look at your 401(k) offerings. You should have stock funds, bond funds, some combined funds and something maybe called an interest fund. This would be what I'm calling a stable market fund. Compare the interest that it is paying to what you can get on a bank CD. This fund should be pay higher interest.
Unfortunately there are no funds available in my 401 offering a stable return better than bank or CU CDs. That's why I was asking about specific funds. I'm looking for different options if I rollover into an IRA. If you have specific funds you can list I would really appreciate it.

Thanks
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Old 01-11-2014, 03:47 PM   #14
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I agree that a good balanced fund at Vanguard would be a good choice.

Since the stock market is near a high, and the bond market is happily coasting on very low interest rates you may want to consider dollar cost averaging into the fund over a year or two. Otherwise, if you invest everything a day before the markets crash for a year, you won't be kicking yourself and be tempted to panic and sell out at the bottom.
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Old 01-11-2014, 03:51 PM   #15
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Unfortunately there are no funds available in my 401 offering a stable return better than bank or CU CDs. That's why I was asking about specific funds. I'm looking for different options if I rollover into an IRA. If you have specific funds you can list I would really appreciate it.

Thanks
Stable value funds are only available within a 401k, so if you don't have a good one you're out of luck.
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Old 01-11-2014, 04:02 PM   #16
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Stable value funds are only available within a 401k, so if you don't have a good one you're out of luck.
Would you mind providing examples of a specific stable value fund?

Even if its not currently available to me... I'm curious to learn more.

Thanks
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Old 01-12-2014, 02:02 PM   #17
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Hello all, 1st post!

T Rowe Price has a great Stable Fund. Paying about 2.16% lately. Low fees.

I have read complaints about Vanguards Stable Fund, they recently raised fees.

I recently retired at 60 after 30 years at a community bank. Since that date, March 2013, my 401k has grown by 25% and 140% since the 12/08 low. Currently 100% invested in T Rowe Equity and Income and T Rowe Blue Chip Growth.

I am getting a bit scared for 2014.

Has anyone come up with a plan or fund to protect core assets but yield at least 2%?

Thanks,

Tom C

In addition to the 401K I have a large cash reserve in CDs and a pension that I can take at 62.
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Old 01-12-2014, 02:49 PM   #18
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Would you mind providing examples of a specific stable value fund?

Even if its not currently available to me... I'm curious to learn more.

Thanks
I can't show you an example since they do not have ticker symbols - only available to 401k/403b plan participants. These funds look a lot like money market funds in that the value of the fund never goes down, it only goes up by the amount of interest paid on your funds. The rates they pay are usually well above money market rates, so this is essentially a money market on steroids. Under the covers of the fund, these funds typically get invested in a short to medium term bond portfolio of very high average quality and then get wrapped by a contract issued by a bank or insurance company that guarantees that the funds can always be withdrawn at book value (i.e. not subject to market fluctuations).
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Old 01-12-2014, 03:12 PM   #19
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Originally Posted by tcaron20 View Post
Hello all, 1st post!

T Rowe Price has a great Stable Fund. Paying about 2.16% lately. Low fees.

I have read complaints about Vanguards Stable Fund, they recently raised fees.

I recently retired at 60 after 30 years at a community bank. Since that date, March 2013, my 401k has grown by 25% and 140% since the 12/08 low. Currently 100% invested in T Rowe Equity and Income and T Rowe Blue Chip Growth.

I am getting a bit scared for 2014.

Has anyone come up with a plan or fund to protect core assets but yield at least 2%?

Thanks,

Tom C

In addition to the 401K I have a large cash reserve in CDs and a pension that I can take at 62.
Are there a tickers for the TR Price and Vanguard funds you are referring to?

Thanks
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Old 01-12-2014, 04:16 PM   #20
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One other possibility is to buy a target date retirement fund, matched to when you expect to use the money. These are typically offered in 5 year increments. The fund will move money from equities to fixed income as the data approaches to reduce the risk. It is intended to be a set it and forget it fund.
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