Random Thoughts The Sequel.
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Howling Mad
- General Manager
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- Joined: Jun 28, 2006
Ok dats it, no soup for u!
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2poor
- RealGM
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- Joined: Dec 17, 2006
- Location: I'm from the city in the midwest best city in the whole wide wide world
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Howling Mad
- General Manager
- Posts: 9,043
- And1: 624
- Joined: Jun 28, 2006
2poor wrote:Health System foo, ain't no teacher.
Interesting note about Ann Arbor; way back when, Jackson (a nearby city) had a decision to make. Either they get a prison, or this upstart University. They took the prison. Ann Arbor got U of M. Jackson is a dump. Ann Arbor FTW.
That is some interesting info, thanks. I'll let my g/f know we won't have to deal with potential breakout prisoners.
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SportsWorld
- RealGM
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- Location: Chicago, IL
- Contact:
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SportsWorld
- RealGM
- Posts: 51,601
- And1: 133
- Joined: Dec 03, 2006
- Location: Chicago, IL
- Contact:
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Howling Mad
- General Manager
- Posts: 9,043
- And1: 624
- Joined: Jun 28, 2006
Ok 2poor here is your retirement gameplan.
For now, go with 100% TIAA-CREF. It's the best option for someone who isn't going to be interactive with their plan.
The major difference between your two options (403b vs Fidelity) is the funds that are offered. The 403b is considered to be less flexible but safer, so going aggressive with it will be ok. The Fidelity investments has a wider range of funds, more specialized(which occasionally have that one money maker everybody craves), but carries a higher risk and definitely requires more activity from the participant.
TIAA-CREF, as stated before, is one of the best fund managers, and placed in the top ten in several years; something no other fund management has accomplished. It's also one of the largest, which could be a good thing or a bad thing, but considering how successful it's been, its a good thing.
It also has great benefits considering the majority of the money is from professors, teachers, etc. One of the best benefits is the extra tax breaks. As little as teachers make (I think they should make more because they are teaching the next gen), this is a way for the gov't to 'repay' them back. I know you're not a teacher, but you have a great benefit here that shouldn't be overlooked.
FYI... the TIAA-CREF is also referred to as the 403b. Its the form its on, so if you hear that phrase you know what their talking about.
As you become more interested in your investment plan and become more involved in it you can discuss the hot trends.
A good place to go is here.
Myretirement.org
It's pretty much a message board strictly for TIAA-CREF participants, and something that I highly recommended to do in the future. It'll teach you the ins and outs, and unlike a normal message board, no one is going to put you down for not knowing your stuff. Most of the people there are teachers discussing everything from the novice jib-jab, to the hot funds and strategies, to even more intensive growth opportunities.
You need to establish a goal with your retirement and decide how aggressive you would like to be. As of right now, being young and having very little responsibility I would suggest something that is pretty aggressive.
Of course, when that occurs and you're filling out the complimentary forms you can ask me again...
A couple things to consider in your goals is do you want current income, or do you want to establish long term growth. I'm sure there are penalties to taking the money out early, and since you say you are a spender I would recommend going with growth capital(long term) vs. current income.
Something else to consider is your risk profile. As I stated something aggressive now would be best.
Here are a list of terms(or options) to consider.
Growth & Income, Growth Equity, High-Yield Bond, International Equity, Real Estate Securities, etc. You might want to understand them as you get more involved and/or when picking your options in your TIAA-CREF plan.
Know which ones are high risk, high reward, and which ones are low risk but maintain a good value.
Another thing to pay attention to it expense ratio. You won't want to be involved in an investment plan that has a high expense ratio, it will eat up all your profit. Although some are good in the long run, you wan to stay away from it if you can.
After you've understood the options you also need to understand which funds you would like. I'll give you a couple obvious(for the finance guys), recommendations.
Life cycle funds, which are basically funds backing up other funds, are good for someone like you. They set a goal and a specific time and make it easy for the non-finance guru. For example, if you want to retire in 2045, you can pick a 2045 life cycle fund. Or, want to retire in 2060, pick a 2060 fund. They basically manage funds for you where they start aggressive in their early stages, then shift to lower risk as it matures. Basically saving you a ton of money because when people keep going back to their financial reps, they pay fees (on most occasions, everytime), but this does it more efficiently.
These funds are for fixed incomes, so if you get a big raise, you might want to consider moving some things around.
Here is some lit on the subject if you are interested.
www.tiaa-cref.org/pdf/prospectuses/inst ... ycle_2.pdf
A long term fund that is also good is an equity index fund, they are more risky, but deliver great returns. Maybe something for now, and later move out of... Any fund will give you decent return and this is the epitome of that. It will give you return in the long run as it's managed very passively and more for the long term goal rather than actively, which is when funds are moved around in according to the trends and current news.
As I stated before, as you get more involved, you might want to change the % number to 80%-403b and 20% Fidelity, that way you can try things out for a couple year, see how you like the return. If not, then just let the 403b do the work for you, and your gravy.
If a lot of this went over your head, don't worry, all of it will fall together once you start filling out the other sheets.
Hope that helps and clears up some things for ya! (breatheeeeeeee!!!!...phew!)
For now, go with 100% TIAA-CREF. It's the best option for someone who isn't going to be interactive with their plan.
The major difference between your two options (403b vs Fidelity) is the funds that are offered. The 403b is considered to be less flexible but safer, so going aggressive with it will be ok. The Fidelity investments has a wider range of funds, more specialized(which occasionally have that one money maker everybody craves), but carries a higher risk and definitely requires more activity from the participant.
TIAA-CREF, as stated before, is one of the best fund managers, and placed in the top ten in several years; something no other fund management has accomplished. It's also one of the largest, which could be a good thing or a bad thing, but considering how successful it's been, its a good thing.
In the 2007 Lipper/Barron's Mutual Fund Family Survey, TIAA-CREF's performance ranked ninth among 67 fund families based on asset-weighted total returns. TIAA-CREF is one of only four fund families ranked in the top 10 for the past two years.
The company ranks 86th on Fortune's list of the 500 largest corporations in America.
It also has great benefits considering the majority of the money is from professors, teachers, etc. One of the best benefits is the extra tax breaks. As little as teachers make (I think they should make more because they are teaching the next gen), this is a way for the gov't to 'repay' them back. I know you're not a teacher, but you have a great benefit here that shouldn't be overlooked.
FYI... the TIAA-CREF is also referred to as the 403b. Its the form its on, so if you hear that phrase you know what their talking about.
As you become more interested in your investment plan and become more involved in it you can discuss the hot trends.
A good place to go is here.
Myretirement.org
It's pretty much a message board strictly for TIAA-CREF participants, and something that I highly recommended to do in the future. It'll teach you the ins and outs, and unlike a normal message board, no one is going to put you down for not knowing your stuff. Most of the people there are teachers discussing everything from the novice jib-jab, to the hot funds and strategies, to even more intensive growth opportunities.
You need to establish a goal with your retirement and decide how aggressive you would like to be. As of right now, being young and having very little responsibility I would suggest something that is pretty aggressive.
Of course, when that occurs and you're filling out the complimentary forms you can ask me again...
A couple things to consider in your goals is do you want current income, or do you want to establish long term growth. I'm sure there are penalties to taking the money out early, and since you say you are a spender I would recommend going with growth capital(long term) vs. current income.
Something else to consider is your risk profile. As I stated something aggressive now would be best.
Here are a list of terms(or options) to consider.
Growth & Income, Growth Equity, High-Yield Bond, International Equity, Real Estate Securities, etc. You might want to understand them as you get more involved and/or when picking your options in your TIAA-CREF plan.
Know which ones are high risk, high reward, and which ones are low risk but maintain a good value.
Another thing to pay attention to it expense ratio. You won't want to be involved in an investment plan that has a high expense ratio, it will eat up all your profit. Although some are good in the long run, you wan to stay away from it if you can.
After you've understood the options you also need to understand which funds you would like. I'll give you a couple obvious(for the finance guys), recommendations.
Life cycle funds, which are basically funds backing up other funds, are good for someone like you. They set a goal and a specific time and make it easy for the non-finance guru. For example, if you want to retire in 2045, you can pick a 2045 life cycle fund. Or, want to retire in 2060, pick a 2060 fund. They basically manage funds for you where they start aggressive in their early stages, then shift to lower risk as it matures. Basically saving you a ton of money because when people keep going back to their financial reps, they pay fees (on most occasions, everytime), but this does it more efficiently.
These funds are for fixed incomes, so if you get a big raise, you might want to consider moving some things around.
Here is some lit on the subject if you are interested.
www.tiaa-cref.org/pdf/prospectuses/inst ... ycle_2.pdf
A long term fund that is also good is an equity index fund, they are more risky, but deliver great returns. Maybe something for now, and later move out of... Any fund will give you decent return and this is the epitome of that. It will give you return in the long run as it's managed very passively and more for the long term goal rather than actively, which is when funds are moved around in according to the trends and current news.
As I stated before, as you get more involved, you might want to change the % number to 80%-403b and 20% Fidelity, that way you can try things out for a couple year, see how you like the return. If not, then just let the 403b do the work for you, and your gravy.
If a lot of this went over your head, don't worry, all of it will fall together once you start filling out the other sheets.
Hope that helps and clears up some things for ya! (breatheeeeeeee!!!!...phew!)
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2poor
- RealGM
- Posts: 11,684
- And1: 1
- Joined: Dec 17, 2006
- Location: I'm from the city in the midwest best city in the whole wide wide world