FA - great on paper, poor on execution

[travelover]

Quote:

Originally Posted by FinanceDude He doesn't have a withdrawal rate until he's withdrawing......... That being said, I'll bet it's an insurance product through Principal or someone...........

Yea, I know there is no withdrawal rate now, but you get the picture.

Company is called AXA Rosenberg.

[FinanceDude]

Quote:

Originally Posted by travelover Yea, I know there is no withdrawal rate now, but you get the picture. Company is called AXA Rosenberg.

Well, the "advantage" is that they probably do a match, he gets a tax-deferral credit on the money taken out, and he will in all likelihood NOT be working there for the next 30-40 years, so he'll get into a "better" plan someday...........

[RonBoyd]

Quote:

Originally Posted by boutros It would typically have a 5.75% load but it is not charged when I buy it for them.

So they give up income in the amount of 5.75% simply because you are a good friend? How nice of them.

[Dawg52]

I wonder what this guy would say if your sister told him to buy her one fund? A target retirement fund.

[travelover]

Quote:

Originally Posted by FinanceDude Well, the "advantage" is that they probably do a match, he gets a tax-deferral credit on the money taken out, and he will in all likelihood NOT be working there for the next 30-40 years, so he'll get into a "better" plan someday...........

There is no match. It is a big city fire department, so most guys do work there 30 + years. His wife works part time, so their tax bracket is low.

I don't know how long he will work there, but I'm recommending that he maximize their Roths instead.

[FinanceDude]

Quote:

Originally Posted by travelover There is no match. It is a big city fire department, so most guys do work there 30 + years. His wife works part time, so their tax bracket is low. I don't know how long he will work there, but I'm recommending that he maximize their Roths instead.

No pension??

[FinanceDude]

Quote:

Originally Posted by Dawg52 I wonder what this guy would say if your sister told him to buy her one fund? A target retirement fund.

The jury's still out on those..........

[podey]

Quote:

Originally Posted by Marquette Well, that got me motivated to look at my 401(k). The good news is that it looks like it's 0.51% for me. One thing I'm not sure on is my bond fund, though. It's an internal fund (no public listing) that buys AAA-BBB funds with the largest holding in treasury notes. There's no expense fee, which sort of makes sense, but I can't find any info on what other fees there might be. Maybe the company is just encouraging investing to increase their overall fund size. edit. By far the largest fee is the 0.83% for the oakmark equity & income fund (oakbx). Since I'm 32% in that, 16% in the bond fund, and 27% in Dodge and Cox Stock Fund (dodgx), maybe I should rebalance out of the oakbx and into the bond and dodgx fund... if I throw it on m*, I'm guessing there's a lot of overlap in the equity holdings between dodgx and oakbx (they're both lv-weighted)

Funny, I hold both OAKBX and DODGX as well. Both have done very well for me for several years.

[travelover]

Quote:

Originally Posted by FinanceDude No pension??

Sure there is a pension, but what does that have to do with the high ER on the 401(k)?

[FinanceDude]

Quote:

Originally Posted by travelover Sure there is a pension, but what does that have to do with the high ER on the 401(k)?

Not directly correlated, but I assumed a fulltime firefighter would have a pension. The AXA annuity in the 401K is not going to change anytime soon. No doubt it's some buddy of the higher ups that "hooked up" his buddy...........

I would do the Roth thing and maximize them. If there is extra money left over, he can do the 401K. Better still, forget the 401K and build up a joint account in tax-efficient low cost funds or ETF's...........he will lose the tax benefit of pre-tax contributions but if the performance has been bad, he could make more in the joint account.........

[travelover]

Quote:

Originally Posted by FinanceDude ............... The AXA annuity in the 401K is not going to change anytime soon. No doubt it's some buddy of the higher ups that "hooked up" his buddy...........

Yea, that's what I figured, too. What a racket.

Quote:

Originally Posted by FinanceDude I would do the Roth thing and maximize them. If there is extra money left over, he can do the 401K. Better still, forget the 401K and build up a joint account in tax-efficient low cost funds or ETF's...........he will lose the tax benefit of pre-tax contributions but if the performance has been bad, he could make more in the joint account.........

Thanks for confirming my thoughts on this. This is what I've recommended to him.

[Buckeye]

What does Bernstein write in one of his books about FA's? Something like "A FA's long term goal is to transfer all of the money in your account into his account."

Disclosure - I use a financial planner who charges a fixed fee not based upon my account balance.

[FinanceDude]

Quote:

Originally Posted by Buckeye What does Bernstein write in one of his books about FA's? Something like "A FA's long term goal is to transfer all of the money in your account into his account." Disclosure - I use a financial planner who charges a fixed fee not based upon my account balance.

You just posted an oxymoron..........

[Buckeye]

FinanceDude - I'm not totally sure what your post means but if it is that I'm getting my pocket picked too, you are correct. That's why I wanted to make that clear given my post.

I wanted access to DFA funds (after reading Bernstein) and some assistance for now so I picked the cheapest route I could find. At least I know an increase in the value of my portfolio doesn't mean an increase in my ees. On the flip side, a decrease in my portfolio value does not mean a decrease in fees.