Pre-Retirement Options

doitmyself,

I’m curious to see what investment options you are offered by TIAA ?

Depending on these options..... it might be OK just to keep your money in that 403B and move to lower risk investments.

Lots of quality advice was given (including mine, LOL) as to how you should proceed with caution when dealing with financial advisors. At 66 years old and almost zero debt, theres really no need for risky investments on your part. Don’t forget to have your beneficiaries in order as you get older.
 
One thing I forgot about. My sister and brother-in-law have 403b's from their University. A significant minimum amount must be left in those accounts for them to qualify for retirement benefits like medical. If you have benefits attached to this account (in addition to the investment value) you would obviously keep enough in it to insure you didn't fall below the minimum.
 
There are some basics that if you read enough finance magazines/articles that end up getting repeated all the time. The basics is that most finance managers can't beat the S&P 500 on a consistent basis, about 75%, but you can do some research and maybe you'll find the other 25% that do it occasionally or long enough to beat the S&P 500 returns. Seems like a Nasdaq index fund has been doing that lately. The other is to stay fully invested. It's hard to time the market, some people get it right by getting out on time, but don't time when they get back in. Some might get lucky but can they do it consistently? There's been about 4 big drops since the 90. I've heard of way too many people who got out early than got out on time. You could also consider my advice conservatives. Beating those other 75% only gives you a B, some here do better with A or higher. But if you trade in or out go with high commissions or risky stuff, you could do much worse than 75%.

I remember telling a secretary once who was just saving her 401k money in a money market account. I told her to stick it in an S&P 500 index fund. A few years later she had made thousands, she said thanks.

You also don't mention how old you are. But low risk means locking in the risk that you'll be poor. If you don't need the money for 10+ years, you put the money in an index fund. Read some of the performance numbers for two funds I posted earlier. Some years it's down but over the long term of a 10 year period, it's been up. If you need your money in 1-3 years, I wouldn't bother with an index fund, but if you're saving for retirement then indexing is one of the safest ways to go. Low risk just means eliminating the possibility of higher returns.

As for being thousands lower, well, you just get used to it. You're just picking the wrong time to look. It's usually the other way, thousands higher when the market is up. Usually that takes longer, streaks are typically up over several days so you could be up thousands or tens of thousands over the week. But of course drops can be much steeper and you could be down 10k+ on a bad day. You just get used to it, no exclamation marks...
I don’t even know if I have choices of this s&p 500 you are talking about. As far as I know we just have 3 tiers of choice, low med and high risk. I am going to have to look into this and figure out what my options are. I’m 46 years old and definitely need to get on the ball ASAP.
 
I don’t even know if I have choices of this s&p 500 you are talking about. As far as I know we just have 3 tiers of choice, low med and high risk. I am going to have to look into this and figure out what my options are. I’m 46 years old and definitely need to get on the ball ASAP.
That sounds like a little bit too simplified a plan. They should have individual funds you can select. In a company account, the funds you can pick from are somewhat limited. I'm just kinda surprised you haven't heard of the S&P 500. It's like the the Dow or the Nasdaq. It's basically what the news is talking about when they say the market is up or down. Most of the time they're referring to the Dow or the S&P 500. The Dow is just 30 companies and maybe isn't as representative as the S&P 500 which is a list of top 500 companies in the US.
 
I have a 401a with TIAA. Higher fees on some of their mutual funds, but they offer index options. They're OK, I've done all self-directed so far and wouldn't ever pick them for individual accounts but it is what it is with employer accounts. I assume the same funds are available with their 403b plans.
 
I'm just kinda surprised you haven't heard of the S&P 500. It's like the the Dow or the Nasdaq. It's basically what the news is talking about when they say the market is up or down.

I brought this idea up to Dave Hess. Based on lots of workplace communication with people of all backgrounds and income brackets, I would wager that the vast majority of the real world knows very little about retirement fund management, let alone perform diy management. Most people choose a few options from their employer plan and then don't look at it for decades. Most people are inundated trying to navigate the challenges of career, family life, health issues, etc. to be concerned with retirement planning decades away. Just my opinion.

It's like our vehicle obsessions here. The vast majority of vehicle owners use quicky lubes, could care less what's going into their vehicle, and rarely if ever wax them. At BITOG we assume everyone cares about vehicles like we do. Go talk to people about your participation here and watch the looks on their faces, if they don't start laughing at you first.
 
Most people choose a few options from their employer plan and then don't look at it for decades. Most people are inundated trying to navigate the challenges of career, family life, health issues, etc. to be concerned with retirement planning decades away. Just my opinion.
Most people don't save anything, or very little. If one saves 5-8% they are ahead of the pack, if a person is really smart and goes 20%+, that person is a tiny tiny minority. Like the stimuli check, look what groups do with that.
 
I brought this idea up to Dave Hess. Based on lots of workplace communication with people of all backgrounds and income brackets, I would wager that the vast majority of the real world knows very little about retirement fund management, let alone perform diy management. Most people choose a few options from their employer plan and then don't look at it for decades. Most people are inundated trying to navigate the challenges of career, family life, health issues, etc. to be concerned with retirement planning decades away. Just my opinion.

It's like our vehicle obsessions here. The vast majority of vehicle owners use quicky lubes, could care less what's going into their vehicle, and rarely if ever wax them. At BITOG we assume everyone cares about vehicles like we do. Go talk to people about your participation here and watch the looks on their faces, if they don't start laughing at you first.
I suppose it would make sense for those with no savings, but I figured if someone is saving a decent amount in their retirement accounts, they should know some basics of finance. Like you don't have to know how to change the oil, but you should at least know that you need to change the oil if you own a car. Like you don't need to read the prospectus on a mutual fund, but at least jump to the interesting part which is performance which is why you buy them in the first place.
 
I don’t even know if I have choices of this s&p 500 you are talking about. As far as I know we just have 3 tiers of choice, low med and high risk. I am going to have to look into this and figure out what my options are. I’m 46 years old and definitely need to get on the ball ASAP.
Take a few mins to read this: https://www.etf.com/docs/IfYouCan.pdf
You don't need to do a lot, or learn a lot. Just a basic understanding and know enough to buy and hold.
 
Since I started this thread, one important thing I had to remember in this discussion is that people march to a different drum. A good analogy is that some people cannot fathom not being in business for themselves and being in "control" of everything. Others, like myself, cannot imagine enduring the challenges of self employment (uncertainties, taxes, liability, certifications, gov. regulations........).

What we discuss here is like talking Ford vs. Chevy vs. Dodge. In the end, people reach similar outcomes taking vastly different roads. Some succeed more and some fail miserably. The important thing is to educate yourself and don't go off the deep end!
 
my random thoughts on retirement investing:
1. pick a large, low cost, comfortable, fund family. mine is vanguard, but schwab, fidelity, tiaa are very ok too.
2. then pick a low cost, sleep well at night, portfolio. 70% bonds/30% stocks, 100 minus your age in stocks, “widows & orphans” all in one balanced mutual fund are some parameters.
3. my own choice is vanguard, my retirement account mutual funds are some medium term bonds, wellesley income, balanced index. when i was in the accumulation phase i chose wellington, which has been plodding steadily along since 1928. i am conservative.
4. don’t overthink or constantly tinker with it.
5. don’t be sold anything.
6. enjoy retirement.
 
The fact that you have a 403b for over 40 years, pension and IRA, plus social security puts you ahead of majority of the folks in the USA.
 
my random thoughts on retirement investing:
1. pick a large, low cost, comfortable, fund family. mine is vanguard, but schwab, fidelity, tiaa are very ok too.
2. then pick a low cost, sleep well at night, portfolio. 70% bonds/30% stocks, 100 minus your age in stocks, “widows & orphans” all in one balanced mutual fund are some parameters.
3. my own choice is vanguard, my retirement account mutual funds are some medium term bonds, wellesley income, balanced index. when i was in the accumulation phase i chose wellington, which has been plodding steadily along since 1928. i am conservative.
While I mostly agree, I just haven't been a fan of bonds. I dumped them years ago and I think a few others agree with me. Had them through up markets and down markets. What I noticed is that they don't do what they claim. When the market is hot, they're obviously not up as much as stocks, but in a down market, they also take the same hammering that stocks do. I think the theory is supposed to be that bonds are less volatile and when people flee stocks, the bonds go up. Didn't happen for me so I got rid of them. Basically you're just locking in a lower return and you still get the same hammering in a down market. It is the standard advice to have a mix of bonds and stocks. Just standard advice and reality didn't happen to mesh lately. I would just stick to more moderate growth stocks instead of bonds.
 
While I mostly agree, I just haven't been a fan of bonds. I dumped them years ago and I think a few others agree with me. Had them through up markets and down markets. What I noticed is that they don't do what they claim. When the market is hot, they're obviously not up as much as stocks, but in a down market, they also take the same hammering that stocks do. I think the theory is supposed to be that bonds are less volatile and when people flee stocks, the bonds go up. Didn't happen for me so I got rid of them. Basically you're just locking in a lower return and you still get the same hammering in a down market. It is the standard advice to have a mix of bonds and stocks. Just standard advice and reality didn't happen to mesh lately. I would just stick to more moderate growth stocks instead of bonds.
I think you are speaking of BOND FUNDS.

Buy bonds at reasonable prices and hold until maturity.

The tougher nut is actually finding reasonable bonds.
 
I think you are speaking of BOND FUNDS.

Buy bonds at reasonable prices and hold until maturity.

The tougher nut is actually finding reasonable bonds.
Yeah bond funds. I think you'd be hard pressed to find any high paying bond now in the current interest environment. Probably why money from bonds have flowed to stocks.
 
The interest rate on both bonds and bond funds is so low, I will not consider them. For years now, the return on the Fidelity short term tax exempt bond fund is so low they make more on fees than you make on interest. The only reason their financial advisors have to advise you to go into those funds is for them to make money, not you. At current rates. I'll stick money in the mattress before I'll invest in a bond fund.
Similar thing with real estate. If 30 year mortgage rates are under 3%, and I can get a rental return of close to 8%, plus increased property values, why would I ever sell and take back paper at current rates? To me, it makes no sense to lock in money right now.
I'm 69 and been retired for just under 5 years. I don't need to draw from my retirement accounts, but if I did, I'd keep enough cash or equivalent to cover 3 years worth of withdrawals. The rest would be fully invested in ETFs, mutual funds, or stocks.
Financial advisors have been slow to adjust to the fact that bonds make no sense for 99% of the people out there, but I do see them finally coming to that conclusion.
 
Made my money maxing IRA's through Vanguard and maxing my 457. Compared to 401k's, 457's and 403b's are expensive although TIAA is about the lowest cost. I moved everything to Schwab and my money stuck in a non-Roth IRA (most moved from the 457) have cost me big time in retirement. My taxes have more than tripled since I retired. Love Schwab. Can't add to Vanguard Admiral funds but can buy Vanguard ETF's without cost. Schwab, Black Rock and Vanguard index products are all within a ham sandwich a year of each other, anyway. Think indexes, steer clear of financial advisors and read Bogleheads. Plus pull up a John Bogle YouTube monthly to keep inspired. And did I tell you I love 💕💕 Schwab. Much better site and equal products to Vanguard, at least when I moved things over. Still have most of my old money in Vanguard, though. Schwab did a great job transferring the securities.
 
Seems like the three, Vanguard, Schwab and Fidelity are all good. I liked Fidelity because it was easy to switch my 401k over from a previous employer. I was laid off from that position so I wanted nothing to do with them so all I had to do was sign a few forms they had filled out for me and they switched everything over for me, didn't have to do anything else.

Also in terms of index funds, Vanguard Index 500 Admiral shares have an expense ratio of .04, but the expense ratio of Fidelity's Index 500 (FXAIX) is .015 so 62.5% less than Vanguard.
 
Seems like the three, Vanguard, Schwab and Fidelity are all good. I liked Fidelity because it was easy to switch my 401k over from a previous employer. I was laid off from that position so I wanted nothing to do with them so all I had to do was sign a few forms they had filled out for me and they switched everything over for me, didn't have to do anything else.

Also in terms of index funds, Vanguard Index 500 Admiral shares have an expense ratio of .04, but the expense ratio of Fidelity's Index 500 (FXAIX) is .015 so 62.5% less than Vanguard.
I always thought Fidelity had several no cost indexes, probably as a teaser to get you to move your money. Schwab's 500 is 2 basis points. So $10 thou of Schwab over Vanguard saves you two bucks a year, my proverbial ham sandwich. The Fidelity 500 would save you fifty cents over Schwab. Find some expert to handle your money and they can easily grab a few hundred off that same ten thousand.
 
I always thought Fidelity had several no cost indexes, probably as a teaser to get you to move your money. Schwab's 500 is 2 basis points. So $10 thou of Schwab over Vanguard saves you two bucks a year, my proverbial ham sandwich. The Fidelity 500 would save you fifty cents over Schwab. Find some expert to handle your money and they can easily grab a few hundred off that same ten thousand.
True, but if you have more than 10k, it's a bit more than 50 cents. People go nuts here trying to save 50 cents a quart just on oil.
 
Back
Top