Anthony Capital, LLC
Matthew is an avid learner and as such, sees his role as a guide who helps clients as they navigate saving for retirement and spending in retirement. His training as an Retirement Management Analyst informs every aspect of his planning and centers every decision on the client. He has taught hundreds of seminars touching on subjects ranging from debt solutions, investing, Social Security, pensions, insurance, and other financial topics, with the emphasis being on what trade offs are made when each is selected.
Living in San Antonio, known as Military City USA, Matthew has become an expert in optimizing the financial lives of public as well as private sector employees. Matthew recognized a huge need for benefits education and basic financial planning among government employees. To serve this need, he started Federal Benefits and Retirement (fedbenretire.org) and teamed up with the nonprofit The Society for Financial Awareness to offer trainings and private consultations at no cost to federal employees. This collaboration has given thousands of federal employees access to fiduciary advice formerly reserved for the more affluent and has created millions in dollars of value for them and their families.
With everyone in the industry clamoring to proclaim their fiduciary status, Matthew is quick to point out that that actually requires more than honesty and transparency. Though without those one cannot claim to be advising, without a broad understanding of finance one cannot claim to be a true advisor.
Matthew is the 8th of 11 children, which he will tell you was an education in and of itself. He has graduated from Dixie State University and Brigham Young University, and has also taken numerous post-graduate courses including a 4 month stint in Medical School. He speaks fluent Thai and enjoys traveling whenever occasion permits. He enjoys being a father to 3 boys and husband to a beautiful and creative wife.
Brigham Young University
Assets Under Management:
No. It is indemnity which means they are merely replacing something of value which was lost.
Therefore no W-9 is necessary.
Great question! While I'd love to say simply "no" and "yes" to your questions respectively and let that be the end, I'm afraid the answer is rather "no, but..." and "yes."
Yes, if you are still working at or after age 70 1/2, you are not required to take out RMDs from your current employer plan until the year you retire. However, if you have other 401(k) plans or IRA accounts, or 403(b)s not rolled into your current employer account, you will need to take the IRS specified portion of your total combined account values NOT with your current employer and ensure that the specified amount is taken from any or all of the accounts collectively.
As a hypothetical example: You have $267,000 in your current employer 403(b), $10,000 in an IRA you setup, and $76,000 in an old 401(k) from a private school you taught at 30 years ago. The $267,000 is exempt but the $10,000 and $76,000 must be added together. You then use this $86,000 amount to figure total withdrawal necessary by dividing it by the age factor assigned by the IRS, (you can find the tables here: https://www.irs.gov/publications/p590b/index.html#en_US_2014_publink1000231236). Assuming an age of 72 at year end, a total of $3359.38 must be withdrawn from either the IRA, 401(k), or both before the end of the year to avoid the penalty.
On the second part of the question, you are correct. You can make contributions, as long as you have income earned from a job that you are currently working.
As always, if you have need of more specific advise you should consult a qualified financial planner. Nothing within this response should be construed as individual advice, but rather general financial information.
I'd have to agree with you. Though the period you are looking at includes the financial crisis, you started investing in the rebound years following the dot-com bubble which should have resulted in some great early returns. Proof of this is in the historical data for many other funds that had much better returns over the same period. You've actually received less than 2% annualized return assuming monthly compounding. I agree that moving from AXA to somewhere else should be a given. I'm not sure of your current employment status though, so depending on that- it's likely that your best option is to continue to invest in your 403(b), just with a different provider. This is because if you're still employed at the same school, you might not be able to close it or roll it over to an IRA just yet. Additionally, moving the money into a Roth IRA would also require not only a roll over, but a conversion which means taxation on the entire amount converted. If you are of age or if you have left the employment of that particular school, given the amount of money, it still might be best to leave it in a 403(b) or roll into your new employer's plan, as the case may be. Assuming you can move the money without penalty, the biggest deciding factor should be what your financial goals are, i.e. how you plan to utilize those particular funds in retirement.
I like the way you are thinking about your situation- you've done your homework on TSP loans and are trying to look at your comprehensive picture.
Though generally, many financial planners and advisors will warn against taking 401(k) loans, being a federal employee you are in a unique situation from others when it comes to planning for retirement because of your pension provides a guaranteed minimum income stream. This means that your TSP/ 401(k) might not be needed to provide significant income from day 1 of retirement.
Additionally, the interest rates you are paying the bank are at least 4x higher than the G-fund rate. Even if you are in the L-2020, the interest you've made over the last year on that $43,000 has been less than what you've paid over the last year on the credit cards, making it a NET LOSS.
While one or the other could make a good argument, because both are present I wouldn't hesitate to tell you to take the TSP loan. It will provide better cash flow because of the lower interest rate, a lower interest cost, and you'll pay yourself the interest! Finally, though you are removing the money from the market, any comparable gains would likely not outweigh interest costs given your lower risk tolerance owing to your proximity to retirement.
Feel free to reach out with any more specific questions or clarifications through a private message.
To begin, annuities can be very complex with several different types of annuities available and each of those generally having a number of subgroups. To really assess what will happen to a specific annuity after death (or even to understand its features prior obtaining one), a qualified, fiduciary financial advisor should be consulted.
(The following is not individual advice nor an exhaustive list of annuities and their features but rather an oversimplification for the sake of education.)
Let's split annuities into two parts: Immediate and Deferred. (These terms refer to when the annuity starts paying you money).
Immediate: One of the most common Immediate annuities is a Single Premium Immediate Annuity. These allow you to exchange a lump sum for a guaranteed payment for certain period such as 5, 10, or 20 years, or a lifetime (the lifetime option can be on joint lives as well meaning that the last person to die of the two original people named keeps getting the same monthly check). People with a very low risk tolerance or who have a very long life expectancy often find these appealing. What is sometimes misunderstood however is that once elected, the lump sum is no longer your asset, but rather the insurance company's asset. In other words, you don't own your money anymore. You traded it for a paycheck. This makes these less desirable for people with shorter life expectancies and those desiring to leave money to heirs. Another drawback that is often understated is the fact that only a small part of the money coming in is investment income- the vast majority of it is just your money coming back to you.
Hypothetical Immediate Annuity: Pay $100,000 to ABC insurance company. They now own the $100,000. In turn, they send you $500 a month for the rest of your life. But until you've received checks for 16.6 years, you've made no money but just been receiving the original $100,000 in payments. Often these do have return of premium riders or other potential benefits you can add, but each rider usually decreases the monthly payout thus stretching out how long it takes to get your own money back to you. For most immediate annuities, when you die your estate gets nothing and payments cease (unless you were still within the guaranteed period i.e. 10 year certain and you die at year 8 then the estate would pick up payments for the next 2 years until the 10 years are complete).
Deferred: These annuities are often similar to traditional investments in that you are not generally giving the money to the insurance company but rather letting them invest it for you. In return, you can be guaranteed returns at a fixed rate, guaranteed a rate within a specified range, or given a varying rate based upon market performance. These can be cashed out when you're done with them or can be annuitized which means you switch the money into payment mode. Unlike the the majority of immediate annuities, in payment mode on most deferred annuities you are still owner of the money but the amount you "own" is decreased by each payment of your money you receive. It is possible however to add a lifetime income rider to these so that the annuity cannot stop payments to you while alive even if the account value reaches $0 but these are almost always subject to an additional cost. Hypothetical Example of Deferred Annuity: Put $100,000 into annuity, wait 10 years to draw. At that point you can take out $135,000 lump sum (with taxes due on all growth if bank money (N/A if IRA money)), start paychecks of desired amount every month until money is gone, or if the rider was elected for lifetime income $500 a month for the rest of your life. The disadvantage of these is that they generally have surrender periods which means even though the company does not own your money, they have a right to use it for a specified period (7, 10, 15 years are most common). If you decide you want it back in that specified period or if a financial need comes up that requires withdrawals above the allowed percentage (often 10%), then you can pay penalties in excess of 12%! This means that in the $100,000 example above, you could lose up to $12,000 to the insurance company if you decide to stop the investment during the surrender period. Ouch!!
At the annuity owners death, any remaining money in the actual account goes to named beneficiaries. (It should be noted that if you elect the lifetime income option on these types of annuities, they will often have two amounts listed on your statements: one is the actual money in the account and the other is how much they are basing your monthly payment on. The first is liquid; cash in your pocket money. The second is really just a theoretical number for calculating your payment and does not pass to beneficiaries as a lump sum (usually).).