Your help please....

[stevemed]

First of all let me say I have learned so much from reading all of your posts and just wanted to say thanks.

My backround....
1)I have no credit card debt and have 3 month emergency fund.
2)I am 36 and would like to fire at age 55.My wife and I make about 85,000 per year(2 Kids)
3)I will have a pension worth 70% of my pay (50,000 in today dollars)with a 15yr 2.5% COLA
4)I have 93,000 in 457/401k plans as of now.
5)My 457 plan is in B shares and my wife's 401k is in C shares.
6)We put in $288 per week into my 457 and 50 per week into her 401k.Her company puts in 3% of her salary no matter what she puts in.

My Questions....

Am I diversified
Mine are all oppenheimer funds (All B shares)

Global opportunities 22% of portfolio
Small and Mid cap 37% of portfolio
Quest ballanced fund 14% (it's a Hybrid fund)
Main st Fund 27% OF PORFOLIO

My wife's(all C shares)
Mfs. Growth Allocation 50%
Mfs Aggressive Growth Allocation 50%

I also want to open a Roth and can afford about 4,000 per year.Should I take some of the money going into my 457/401k and max out a second roth in my wife's name.Any help would be great and thanks in advance.

[saluki9]

I would be happy to look at the portfolio for you, can you please post the symbols for your funds?

[stevemed]

saluki9...thanks so much

Here are the symbols

Mine-oggix/omsbx/Qgrbx/Qscbx

and my wife's- mcagx/mcgwx

Thanks again for all of your help.

[Mwsinron]

Those expense ratio's and fees are pretty high for all those funds. Plus whats the deal with the deferred load % of 5. But to see for yourself, goto Morningstar.com then to tools,then at the bottom Instant X-Ray.

[stevemed]

That's what I'm wondering.Should I pull some of the money out of those plans and put them into roth's instead.My thinking with the 457 plan was that I could take the money out if I fire with no penalty.When I questioned the high fee my advisor told me "All funds have fees"and he also said that all b shares turn into A shares after so many years.

After reading all of your post I wonder if I should take some of the money and open roth's in Index funds

[Mwsinron]

I dont know the details of a 457 plan. But I know 403bs and 401ks you should be able to transfer your money to another company like Fidelity or Vanguard. They have low fee no load funds. This is providing your workplace gives you a choice.

[Mwsinron]

Whoop double post.

[stevemed]

I don't have any other choices.It's just the oppenheimer funds at my work place.

[Mwsinron]

Quote:

Originally Posted by stevemed I don't have any other choices.It's just the oppenheimer funds at my work place.

Well might be a good idea then to look at opening a Roth at Vanguard,Fidelity etc for low fee no load funds. Pretty lousy they don't offer you at least 2 choices where to put your money.

[ats5g]

Quote:

Originally Posted by stevemed That's what I'm wondering.Should I pull some of the money out of those plans and put them into roth's instead.My thinking with the 457 plan was that I could take the money out if I fire with no penalty.When I questioned the high fee my advisor told me "All funds have fees"and he also said that all b shares turn into A shares after so many years.

First, note that this "advisor" will likely say anything to get you to keep contributing to the 401(k). He/she likely gets a % of yearly expenses the funds are siphoning off. Why pay 2%+ when you could pay 0.20%? Just like why pay $20 for milk, when you could pay $2.

Let's see, get F*&cked for a few years in the B shares, and then F*&ched slightly less in the A shares. Hmmm.... no thanks.

See also John Bogle's The Tyranny of Compounding Costs"

Quote:

After reading all of your post I wonder if I should take some of the money and open roth's in Index funds

By all means, yes. You don't necessarily have to use index funds [that'd be much choice], just for the love of God get those expense ratios down to under 0.40%. IIRC, places like Fidelity and Vanguard can take automatic withdrawals from your checking account to fund the Roth as well, so your investing can be just as automatic as the 401(k).

- Alec

[stevemed]

Thanks Alec.So should I max out a Roth for my self and my wife and then put the rest of my money in my 457 plan or a trditional Roth?

[CCdaCE]

Quote:

Originally Posted by stevemed Thanks Alec.So should I max out a Roth for my self and my wife and then put the rest of my money in my 457 plan or a trditional Roth?

That's what I do.

So, Max out my Roth IRA, contribute to 457 up to the match. Contribute up to the match for the wifes 457. Next is to max out her Roth IRA (which I haven't done yet). You could argue to max out the 457's to the match, first (Hey, free money!).

If it's an issue after doing all that, I would think about addin' more to the 457 or, if outside of 457, tax efficient fund.

I picked the 457 fund with the lowest expense ratio (ER) that matches up to my need/ability/willingness to take risk (matches my goals). This happens to be a Vanguard Lifestrategy fund (0.80% ER - inside the 457).

You'd have to do the math as to whether it's a good idea to "pull money out". I assume it'd still stay in the 457/401.

-CC

[ats5g]

Quote:

Originally Posted by stevemed Thanks Alec.So should I max out a Roth for my self and my wife and then put the rest of my money in my 457 plan or a trditional Roth?

In addition to maxing out the Roths each year, I'd contribute enough to get the matches in the 401(k) and/or 457, and then contribute to a taxable account. With expenses around 2%, I don't it makes sense to contribute any more than the match.

Check out Ed Chang's article "Looking at Expenses of 401K Plans." You can download the spreadsheet and put in your numbers to see what works.

- Alec