Chacon Diaz & Di Virgilio
When we created the firm, we sought to build an advisory experience that was solely and entirely focused on what was best for our clients. Today, that vision has made us a recognized leader and pioneer in our field. As an independent, fee-only, fiduciary wealth management firm, we do not sell products and we do not accept any commissions, allowing nothing to influence our independence and objectivity. As a result, our advice is always unbiased and free from conflicts of interests.
-Certified Investment Management Analyst®, CIMA® (2% of investors hold this certification)
Successfully demonstrated at least three years’ of acceptable experience in investing and passed two levels of certification exams, each with an average first-time pass rate of less than 60%. In addition, attended and completed the education program, through The Wharton School, University of Pennsylvania.
-Certified Financial Planner™, CFP® (20% of planners hold this certification)
Successfully demonstrated at least three years’ of acceptable experience in financial planning, completed 6 graduate school level courses, and passed a rigorous ten-hour exam certification exam (63% pass rate).
-Adjunct professor and regular lecturer at the University of Florida, working with the College of Pharmacy, the University Athletic Association, the College of Engineering, and the Warrington College of Business, among others.
-2016 University of Florida Outstanding Young Alumni Award Winner (1 of 24 across the entire University) The award is given to those who have distinguished themselves in their profession and community, and have had a significant professional accomplishment on the State, National, or International Level.
-Judge for Entrepreneurial and Business competitions held at UF, and a mentor for Entrepreneurs in the community.
-Past President of the Board of Trustees for the Gainesville Sports Commission, an organization that brings millions in economic benefit to the Gainesville community through sports tourism.
MS, The University of Florida
BSBA, The University of Florida
Assets Under Management:
If we are assuming that you are going to pay back the debt and not declare bankruptcy at some point, the best strategy is to do all that you can to reduce your overall interest rate. Thus, if you can get a fixed loan from the bank for X% that is less than the current rate on your credit card, that is wise. Then, begin paying your highest interest rates off first, as aggressively as you can. (Just pay the monthly minimum on your 0% cards, until they start charging interest.) As a bare bones strategy, always pay at least 2x the monthly minimum on credit card debt with an interest rate because this will cut your time to pay it back in half, as well as your overall interest owed.
I am going to give you a few budget guidelines first.
1.) Pay off your student loan debt in 10 years or less by using 30% of your gross income per year to pay down the debt.
2.) Save 10% of your gross income in a 403(b) or 457.
Both the 403(b) and the 457 are very similar, but there are a couple of key differences, and they can vary from employer to employer. Here is a guide that is a solid starting point.
However, the primary answer to your question is to choose the account type that has the best investment options. (Which depends from employer to employer. Here in Florida, the 457 is typically best since you have access to a full range of investment options. But this is not true in every state.) Thus, it's impossible to give you a soundbite answer that is definitive without knowing your specific situation. Also, creating an optimal investment strategy from the choices you have is not simple enough to provide you with an answer in just a few sentences. With that being said, as a general guide, contact your employer and ask for a list of the available companies that offer the 403(b) and the 457 through your employer. Once you have that, you will want to get the list of investment options from each provider. Then, you can evaluate which one is best. (typically, the best one is going to be the one that offers you the most investment choices to pick from, but this is not always the case.) Once you have made that decision, open the account, implement your investment strategy, and then save 10% a year of your gross income into the account.
Here is a resource that explains what you are looking for. http://www.investopedia.com/articles/mutualfund/05/shareclass.asp
As an aside, I would advise not investing in any funds that have A, B, C, etc shares, and instead, choose no-load, no transaction fee investments. The share classes, A,B,C, etc were created by financial companies to incentivize brokers to sell their funds. Basically, it was a way for the mutual funds to pay sales people to push their funds.
The initial withdrawal of $176K from your 401(k) will satisfy the RMD for that amount, but for that amount only. The remaining balance of $199K will still have an annual RMD (required minimum distribution) that must be satisfied each year after you turn 70 and a half. The monthly income of $1,600 will not satisfy your RMD going forward.
Is it a good plan? In my opinion, no. Interest rates are low and your fixed payment of $1,600 won't adjust, thus, if interest rates increase, you will be losing purchasing power each year. Also, mathematically speaking, a wise investment strategy will outperform "insuring" your money in an annuity. Thus, it's highly likely that you will be wealthier at the end if you invest your 401(k) well and not purchase an annuity. With all of that being said, "sound biting" an answer to a question such as yours isn't wise, as there are many factors to examine, beyond just the math. (For example, behavioral psychology, as well as your skill as an investor, or access to a good investor. But if everything is being done optimally, not purchasing the annuity would be better for you total return, and wealth preservation wise.)
Given your fact list and assumptions, it would seem simple to say that you should leave your program now. However, It seems that there must be more details which will assist in answering your question. For example, after making $500K per year for the next 5-7 years, what happens? Does your income go away? Does it stay at this level? What is the probability that you don't make $500K during the next 5-7 years?