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**jfoxcpacfp** · 04-11-2017, 10:35 PM

I'll give it a shot. Don't have a free hour to digest the whole thing so I skipped straight to the Q&A

socaintexas wrote:

1. Does opening the SEP-IRA and transferring to a solo-401K sound like a reasonable plan? Part of me wants to do that to help with taxes for 2016 but the other part does not want to miss getting that $7830 into a plan to start earning. I will likely not make that much 1099 income again, so the tax part will not be as much of a factor in the future. Any other recommendations?

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Yes, do the SEP-401k transaction. I'm not sure what you mean about the $7,830. Maybe in the part I skipped?

socaintexas wrote:

2. Does the plan to contribute 4% to get the match then put the rest of the employee contribution in a 401K seem appropriate, or should I just keep contributing to my 403b?

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Never pass up a match. Instant 100% return.

socaintexas wrote:

3. I understand Vanguard does not accept roll-overs so I am looking at TDAmeritrade vs etrade for the solo-401K, if that is what I move forward with. Being able to direct deposit is a plus for me. Is this available for both? Does anyone prefer one over the other?

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We've custodied with both. TDA is more professional (our current custodian) but you may pay a little more for trades.

socaintexas wrote:

3. Does the 60% stocks/40% bonds make sense for me? I thought you wanted your age in bonds but when I filled out the Vanguard allocation questionnaire (in the Appendix and online) it recommended 80%/20%.

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A thousand times no.

socaintexas wrote:

4. Please help me with this Mutual of America 401K option. I get that you need to look across all accounts to figure up your allocation but this has 89% of my assets. I would like to approximate a lazy profile. I am looking at maybe 25% M of A equity index fund, 25% M of A mid-cap equity index fund (these both have the lowest fees), and maybe 10% Vanguard VIP International Portfolio. Everyone seems to like the T.Rowe Blue chip fund, but the fees are higher. Should I do 10% of my 60% into the Vanguard REIT fund? The M of A Bond Fund has a 0.9% fee, but I need to increase my bond percentage, so 40% to there? Do I move all of the money at once to the new allocations or move a little at a time? (Or move it all to the interest accumulation account and wait for the market to drop – I do not think I would be a good market timer)

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Nobody is a good market timer, just for the record. We use a standard allocation, always backed up by a financial plan. Don't concentrate on fees to the detriment of diversification. The perfect, lowest-cost portfolio can be demolished by a single irrational, emotional decision in a correction.

socaintexas wrote:

5. Regarding the 401K I have about 26K sitting in an interest accumulation account ($600 in the TDA earning 3% interest and $26K in the 401K earning 1.5% interest. Should I move that all out now or should I dollar cost average it. For that matter I have $11K in a deposit account at TDAmeritrade that needs to be moved, so I have the same question for this account?

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You dollar cost only when you have to, such as monthly 401k contributions. We never dollar cost lump sums.

socaintexas wrote:

6) Should I go ahead and invest the $5,500 in the Vanguard Roth IRA’s (mine and my husband’s) or wait until I do the 2017 contribution so that I can get the Admiral Shares? Any advice on what to invest in? Should I do a lazy portfolio, a life strategy fund, or a target retirement fund?

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In general, the sooner the better.

socaintexas wrote:

7) I haven’t started investing for my girls’ college. I am looking at a 529 through Utah or NY. When my mortgage is paid off in October, I plan on using that money to go to the 529 plan, or would it be better served elsewhere?

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Depends on your overall financial plan.

socaintexas wrote:

8) Should I just hire a financial planner to help with all of this? That has been frustrating because I haven’t talked to anyone in my quest that looks at the whole picture or they want to manage you funds or they have given erroneous advice (like I can have SEP-IRA and do a backdoor Roth and it will not affect my taxes, etc). I haven’t found anyone locally who will just look at the whole picture and give advice so I will likely need to go elsewhere if I need to pursue this option.

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I think you can guess my answer.

socaintexas wrote:

9) Am I missing something?

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Almost certainly.

**Hatton** · 04-12-2017, 04:08 AM

Your situation is complicated. Your mutual fund options are expensive. Adding up your posted figures I get about 800k net worth. Does that sound about right. You mention your husband is a cattle rancher and you are getting into this in a big way. How many head do you have. How big is the ranch. Do you own your equipment. I ask this because my husband has some cattle also. The start up costs on this are sizable if you do not al ready have tractors, bush-hogs, fencing, water. I for one are not sure where a hobby farm ends and a real business begins. As far as retirement accounts go I would see if you have access to a brokerage window. If you do you can start buying low cost vanguard etfs. When are you planning to retire? Your portfolio now could generate $25-32k if you quit today. It is possible your ranch can add to your income later. Your expensive mutual funds are going to be a drag on your returns. Since they are in tax protected accounts you could sell them without incurring any capital gains. Perhaps your employer could be convinced to move to lower cost options. I assume you want to grow your portfolio prior to retiring so 80/20 may be better. I am close to 60 and I am 65/35. A financial plan or maybe a ips is in order. Johanna is a planner that posts here. I got one from vanguard a few years ago. These are just my random thoughts on your situation. Good luck

**socaintexas** · 04-12-2017, 04:58 AM

Thanks!

The $7830 is how much more I could contribute to get to the $53K amount for 2016.

My husband used to train cutting horses. He had started a breeding program prior to the girls being born. We sold off the cattle along the way and a drought in 2011 about killed us. We were paying $3K a month in feed and had to get out from other that so we greatly downsized. Now that the girls are in school he has gotten back into training and breeding some horses and we are going to start building a herd of cattle. We have acreage that is already cross fenced, equipment, etc, so the big cost is going to be the cattle investment. We have a friend who is breeding Wagyu and doing pretty well! We are not looking to get rich at it by any means, but he enjoys it, it will hopefully bring in a little income, it will help with the grocery bill, and it certainly helps with taxes.

There is no brokerage option with my 401K so I am pretty much stuck trying to make the most of what I have to choose from!

**adventure** · 04-12-2017, 08:12 PM

I'd suggest the following.

1. Seems like the SEP401k is a good idea.

2. Can you add anything to an HSA?

3. Finish your taxes. by Tuesday.

4. You could certainly get some piece of mind by meeting with someone. Johanna has time on Monday. (www.meetme.so/JohannaTurner). (She seems like a nice person, and knows her stuff, so an introductory conversation can't hurt. Tuning up a pile that large by 0.5% a year makes any investment in advice pretty negligible. I would say, you shouldn't "just hire" someone, but rather add someone to your team. You shouldn't just tell someone else to run the show and figure it out.

5. You need a financial plan (see #4), and an Investing one too. This can start now, or come after taxes are due. And, life won't end if you have to do some changes during the next tax year either. WCI has some pointers here. You also need to know how much you can put into livestock (risk, return, time frame, agricultural tax implications, etc)

6. You have money all over the place, in a pile of different places. There is some value is keeping things simple and manageable.

7. When do you need the money to retire? That'd make a difference in your bond allocation, but I'd not put much into bonds. You may have years before you retire, and then decades of retirement. Give stocks some time to grow. Or cows. They grow too.

8. Can you move the 401a to a rollover IRA, or are you still with said employer?

Great questions, btw. Give us some things to think about too. Thanks.

**socaintexas** · 04-12-2017, 11:08 PM

adventure wrote:

I’d suggest the following.

1. Seems like the SEP401k is a good idea.

Do you have experience with TDAmeritrade, etrade, fidelity, etc? I am hearing good things about TDAmeritrade and have my HSA there, so am familiar with their site.

2. Can you add anything to an HSA?

I am making the maximum contribution allowable for my family.

3. Finish your taxes. by Tuesday. They have been with my tax guy for the past month. I need to decide about the SEP IRA before Tuesday or have him file an extension. He may have already done so.

4. You could certainly get some piece of mind by meeting with someone. Johanna has time on Monday. (www.meetme.so/JohannaTurner). (She seems like a nice person, and knows her stuff, so an introductory conversation can’t hurt. Tuning up a pile that large by 0.5% a year makes any investment in advice pretty negligible. I would say, you shouldn’t “just hire” someone, but rather add someone to your team. You shouldn’t just tell someone else to run the show and figure it out.

5. You need a financial plan (see #4), and an Investing one too. This can start now, or come after taxes are due. And, life won’t end if you have to do some changes during the next tax year either. WCI has some pointers here. You also need to know how much you can put into livestock (risk, return, time frame, agricultural tax implications, etc) I have it in my head but you are correct, I need to sit down and put it on paper (electronically, that is!)

6. You have money all over the place, in a pile of different places. There is some value is keeping things simple and manageable. I definitely need to move the money from the 401a into something. Then it will just be my work 401K/403B, TDAmeritrade for my HSA (and possibly the SEP-IRA to the solo 401K, and Vanguard for my backdoor Roth IRA's.

7. When do you need the money to retire? That’d make a difference in your bond allocation, but I’d not put much into bonds. You may have years before you retire, and then decades of retirement. Give stocks some time to grow. Or cows. They grow too. Yes, I hope to have stocks and livestock grow! I am hoping to be financially able to retire by age 62 (16 years), but may continue to work because I really love what I do!

8. Can you move the 401a to a rollover IRA, or are you still with said employer? Nope, I'm still here! I can't start moving money out until I'm 59 1/2.

Great questions, btw. Give us some things to think about too. Thanks.

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**The White Coat Investor** · 04-12-2017, 11:59 PM

You got through the Bogleheads Guide to Retirement Planning? I'm impressed. You're in a rare club.

1) There is no such thing as a SEP 401(k) or a Solo IRA. There is a SEP-IRA and an individual (solo) 401(k). The individual 401(k) can sometimes be maxed out at a lower income, may get better asset protection, doesn't screw up your backdoor Roth IRA pro-rata calculation but has two downsides- you have to open it during the calendar year and it requires slightly more paperwork. Your solution is a good one.

2) Yes, of course get any match you can. That's part of your salary. Then figure out the maximal amount you can get into retirement accounts and try to do that if you can.

3) The word on the street is etrade is easier to work with.

4) You'll always have to make compromises when most of your money is in a crummy 401(k). Sorry. Focus on desired asset allocation first, then costs and you'll usually make the right choice. I would consider the 401(a) 2% thing as part of your bond allocation.

5) Lump summing usually beats dollar cost averaging. No guarantee of course.

6) Admiral shares don't make that much of a difference. Get the money invested. You'll be admiral eventually.

7) Make sure you don't get a state tax break for using your plan. If you don't, then NY, NV, or UT are all good plans. Can't go wrong with any of them. I'm partial to Utah (Vanguard and DFA funds, great management history) but NY has slightly lower costs and Nevada's shows up on your main Vanguard login/account.

8) High quality physician specific financial advice is both hard to find and expensive. Nothing wrong with using it. But if you can get through the Bogleheads Guide to Retirement Planning, you have the knowledge, interest, and discipline to do this yourself if you choose to. That said, a good compromise might be to pay for a couple of hours of time from an hourly rate advisor to look things over.

**socaintexas** · 04-13-2017, 06:34 AM

The White Coat Investor wrote:

You got through the Bogleheads Guide to Retirement Planning? I’m impressed. You’re in a rare club.

1) There is no such thing as a SEP 401(k) or a Solo IRA. There is a SEP-IRA and an individual (solo) 401(k). (I fixed it. After hours of trying to get all of that on paper my brain checked out!) The individual 401(k) can sometimes be maxed out at a lower income, may get better asset protection, doesn’t screw up your backdoor Roth IRA pro-rata calculation but has two downsides- you have to open it during the calendar year and it requires slightly more paperwork. Your solution is a good one. When I was talking to the lady at TD Ameritrade explaining my plan she asked if I was an accountant because I sounded so knowledgeable! Nope, I'm a shrink trying to keep my money from shrinking! Thanks WCI!

2) Yes, of course get any match you can. That’s part of your salary. Then figure out the maximal amount you can get into retirement accounts and try to do that if you can. I can! It will be a little trickier for taxes not having the 18K deducted from my wages but it sounds like it will be well worth it.

3) The word on the street is etrade is easier to work with. I called TD Ameritrade, Fidelity and etrade today. TD Ameritrade does not allow an electronic transfer. I would have to do a check, wire transfer, or a "mobile transfer" from their app. That's kind of a bummer. I was wanting to stick with TD Ameritrade since that is where my HSA is and I'm used to it but I want to set it up on autopilot to have the funds automatically transferred on payday so I don't get behind or forget about it. It sounds like TD Ameritrade would be more effort. I read all of the comments on your i401k twice and I still can't decide!

4) You’ll always have to make compromises when most of your money is in a crummy 401(k). Sorry. Focus on desired asset allocation first, then costs and you’ll usually make the right choice. I would consider the 401(a) 2% thing as part of your bond allocation. I hadn't thought of that. When it was earning 5% it was a no brainer. Leaving it there will also be favorable should I ever return to work for the state full time. I will be 2 years 9 months closer to their target date. 2% just sounds awfully low! I'm earning that on the first $25K of my emergency fund at Metropoliltan. I'll leave it for now and maybe the legislature will increase it in the future.

5) Lump summing usually beats dollar cost averaging. No guarantee of course. OK. I just hate to put it all in the bottom fall out tomorrow! But had it been in over the past year I would be a little wealthier!

6) Admiral shares don’t make that much of a difference. Get the money invested. You’ll be admiral eventually. OK.

7) Make sure you don’t get a state tax break for using your plan. If you don’t, then NY, NV, or UT are all good plans. Can’t go wrong with any of them. I’m partial to Utah (Vanguard and DFA funds, great management history) but NY has slightly lower costs and Nevada’s shows up on your main Vanguard login/account. From what I understand Texas has a pretty crummy plan.

8) High quality physician specific financial advice is both hard to find and expensive. Nothing wrong with using it. But if you can get through the Bogleheads Guide to Retirement Planning, you have the knowledge, interest, and discipline to do this yourself if you choose to. That said, a good compromise might be to pay for a couple of hours of time from an hourly rate advisor to look things over. As long as I can get some advice from this group and the Bogleheads. It sure makes me nervous making big moves without someone looking it over. I appreciate everyone here and on the Bogleheads forum who have taken their time to help me!

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**adventure** · 04-14-2017, 12:39 PM

socaintexas wrote:

TD Ameritrade does not allow an electronic transfer. I would have to do a check, wire transfer, or a “mobile transfer” from their app. That’s kind of a bummer. I was wanting to stick with TD Ameritrade since that is where my HSA is and I’m used to it but I want to set it up on autopilot to have the funds automatically transferred on payday so I don’t get behind or forget about it. It sounds like TD Ameritrade would be more effort. I read all of the comments on your i401k twice and I still can’t decide!

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Can you be more specific? I can move money to my TDAmeritrade account from another of my bank accounts... Do they specifically not allow a paycheck to be deposited to your TDAmeritrade investment account? I know I've seen the direct deposit form, and there are other options too. Perhaps I missed something.

**jfoxcpacfp** · 04-14-2017, 06:29 PM

adventure wrote:

socaintexas wrote:

TD Ameritrade does not allow an electronic transfer. I would have to do a check, wire transfer, or a “mobile transfer” from their app. That’s kind of a bummer. I was wanting to stick with TD Ameritrade since that is where my HSA is and I’m used to it but I want to set it up on autopilot to have the funds automatically transferred on payday so I don’t get behind or forget about it. It sounds like TD Ameritrade would be more effort. I read all of the comments on your i401k twice and I still can’t decide!

Click to expand…

Can you be more specific? I can move money to my TDAmeritrade account from another of my bank accounts… Do they specifically not allow a paycheck to be deposited to your TDAmeritrade investment account? I know I’ve seen the direct deposit form, and there are other options too. Perhaps I missed something.

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Same here. We custody with TDA and, to the best of my knowledge, this has not been an issue.

**socaintexas** · 04-14-2017, 08:44 PM

TDAmeritrade said for the employer contribution into SEP-IRA (specifically) that it could not be electronically transferred to that account from an outside checking account. I could open a different account at TDAmeritrade and transfer money to it and from there to the SEP-IRA. How are you guys doing it?

**adventure** · 04-16-2017, 09:08 PM

Ah ha. I just deposit into my standard (taxable investment) account. No tax implications (aside from a tiny amount of interest, like a saving account) for cash sitting there. Then you can funds around, into different accounts.

**jfoxcpacfp** · 04-16-2017, 09:30 PM

socaintexas wrote:

TDAmeritrade said for the employer contribution into SEP-IRA (specifically) that it could not be electronically transferred to that account from an outside checking account. I could open a different account at TDAmeritrade and transfer money to it and from there to the SEP-IRA. How are you guys doing it?

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I just checked with my partner and she said what you stated is correct and added the following:

"TDA treats SEP IRAs differently from the other IRAs since the contribution is supposed to come from the "business" - that's a 3rd party payer."

You can electronically deposit IRAs from the individual, iow. Hope that helps.

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