From: owner-persfin-digest@lists.xmission.com (persfin-digest) To: persfin-digest@lists.xmission.com Subject: persfin-digest V5 #103 Reply-To: persfin Sender: owner-persfin-digest@lists.xmission.com Errors-To: owner-persfin-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes persfin-digest Monday, May 17 1999 Volume 05 : Number 103 In this issue of the Personal Finance Digest: In re: 457(f) plans Re: Frequent Allocatiion of 401k funds Real-Estate & Mortgage Re: Frequent Allocatiion of 401k funds response Real estate and mortgage Sw The messages posted to the Persfin-Digest are opinions and are not intended to substitute for qualified professional advice. Subscribers should seek the services of qualified professionals for such advice. The publisher, Internet provider, and Digest contributors cannot be held responsible for any loss incurred as a result of the application of any of the information provided here. To ask questions or provide answers, send your email to "persfin-digest@lists.xmission.com". Also, you can "reply" to the persfin-digest and your email tool should fill in the same address. However, if you "reply", be sure to edit the subject field in your email to reflect your topic. Copyright (c) 1999, Jeff Salisbury POSTED SUBSCRIPTION FEE: $20/year. Payment is optional. You will not be billed. The Digest is available to all subscribers, whether or not they pay. I do not discriminate either in favor of paying subscribers or against nonpaying subscribers. If you feel that the information presented here is worth the fee, and you feel comfortable paying it, send cash, check, or money order (U.S. funds), payable to "Jeff Salisbury", to: Jeff Salisbury 65 North 1300 East Logan, Utah 84321 Payment will be acknowledged by e-mail if you include an e-mail address. Subscribe: e-mail majordomo@xmission.com, text: subscribe persfin-digest Unsubscribe: e-mail majordomo@xmission.com, text: unsubscribe persfin-digest ---------------------------------------------------------------------- Date: Thu, 13 May 1999 12:10:21 -0700 From: JoAnne Freeman Subject: In re: 457(f) plans persfin-digest wrote: Date: Thu, 13 May 1999 10:37:24 -0700 From: rlee@muse.sfusd.k12.ca.us Subject: Re: 457(f) Does anyone know anything about 457(f) for non-profit institutions? Someone from an annuity company came to inform us about this available retirement plan in the place of 403(b). It seems to have a lot of good items compared to 403b. For instance, the contribution limit for this plan is up to annual salary. It doesn't have the $10,000 limit like 403b and so on and on. It sounds too good to be true. Can anyone shed some light on this investment item? Why haven't we heard about this? Is it new for non-profit institutions? For someone who is not making millions?=20 Thanks. =3D=3D=3D=3D=3D I found this using Alta Vista search engine and +457(f) and +help as key words... Types of Governmental Non-Qualified Plans 1. Code =A7457(b): "Eligible Deferred Compensation Plans". Deferred compensation is includible in the executive=92s gross income when the deferred compensation is received by the executive, even if the amounts become vested at an earlier date. Amounts credited under existing "Eligible deferred compensation plans" must be held "in trust for the exclusive benefit of participants and their beneficiaries" no later than January 1, 1999 (new EDCPs must use a trust immediately). EDCPs are subject to substantial limitations governing the amount of compensation deferred (i.e., generally, $7,500 annually, less any elective deferrals under Code =A7403(b) tax sheltered annuities and grandfathered 401(k) plans), and, therefore, such plans are of limited utility as executive benefit vehicles. The web site (which I know nothing of) is http://www.nappa.org/news-past/governmental_non.htm and this from a Fidelity site (dictionary) 457(f) Under Section 457(f) of the Internal Revenue Code, an employer can set aside money to supplement retirement income for a select group of employees in their organization. Since these programs are designed to attract and retain key employees and do not provide a benefit for all employees, these programs do not qualify for all of the tax advantages that are made available to 401(a) plans, for example. URL: http://www.403b.com/non-profits/dict/definitions.htm - - ------------------------------ Date: Thu, 13 May 1999 13:32:51 -0600 From: R Mills Subject: Re: Frequent Allocatiion of 401k funds Bummer you are losing now with the market doing well.I got the wild idea of timing the market, as you mentino. I consider myself pretty sharp. Why not jump in and out of funds and make a little "extra"? Sounds pretty good! Well, I tried it, gave it my best shot and lost. Started jumping in and out of the market between mutual funds (when I thought the market was goig to rise a bit), and money market funds (when I thought the market was goig to decline a bit). Worked ok for the first few times, then when I tought it was doing to drop, I pulled back into money markets and guess what....it rose, and rose and rose. Now I have money parked in the money markets and have missed a good run of the market. From now on, I invenst in solid funds, long term, and reallocate yearly. You may be better off to evaulate whether the funds you are in are a solid value. Why are they losing 30% Poorer but wiser, :-) Robin > Subject: Frequent Allocatiion of 401k funds > > Hi > > My questions is if you were to frequently change your > account allocation to play the market or even to pull out > of a losing fund and move it to something else, is there > are long term problem with this approach. > They say it is better to leave it as it is - but some of my > funds are losing like -10 to -30%. Will I gain anything > by moving in and out or will I lose ? Right now I have > put it in money market for everything is losing > BTW my 401K is tied to Minnesota Mutual. - - ------------------------------ Date: Thu, 13 May 1999 19:42:15 -0400 From: "Peter & Karen Diamond" Subject: Real-Estate & Mortgage Bill, The answers to all your questions are based on one other question, how long do you plan to stay in the house? If you will only stay a few years, put as little down as possible to avoid PMI, don't pay points, invest the rest and get an adjustable or balloon mortgage. If you plan to stay for a long time, put as much down as possible, pay the points and get a 30 year fixed. (or maybe a 15 year fixed if you can handle the payments) Before you lay down all your savings on a down payment consider if you have other financial concerns taken care of. Do you have, an emergency fund, adequate car, health, life and disability insurance, adequate retirement savings, a college fund for the kids? All of these items should be addressed before you put your last dime into the house. Remember, the only way to get the money back is to sell the place. Sure you could get a home equity loan, but why pay to borrow your own money back? With mortgage rates pretty low, your "investment" in the down payment is not that much. If you are in the 28% tax bracket, a 7% loan is only "earning" you 5%. There are alot of ways to earn more than 5% on your money. Sure, they aren't guaranteed, like the larger down payment is, but if you have the extra money and you haven't taken care of those other items I would recommend you do that first. Quicken will calculate some of the numbers you need, many web sites (quicken.com and others) will also help you run the numbers. Good luck with the new place. Peter Diamond - - ------------------------------ Date: Thu, 13 May 1999 20:29:10 -0400 (EDT) From: "L. Chen" Subject: Re: Frequent Allocatiion of 401k funds > My questions is if you were to frequently change your account allocation to > play the market or even to pull out of a losing fund and move it to > something else, is there are long term problem with this approach. They say > it is better to leave it as it is - but some of my funds are losing like -10 > to -30%. Will I gain anything by moving in and out or will I lose ? Right > now I have put it in money market for everything is losing BTW my 401K is > tied to Minnesota Mutual. What is the time horizon for your "10-30%" loss? One quarter? One year? Three years? I would not reallocate "to play the market". The whole idea of asset allocation is to spread your risk among different categories to reduce the volatality(sp?) of your *overall* portfolio. But that doesn't mean you should not get out of investments that are poor performers. In term of funds, you also have to judge those performance with respect to other funds in the same category. e.g. small cap funds have been poor performers for the past few years. But if your funds in the same category have been among the bottom performers, you might consider getting out of them. Note the word "consider" -- because that is only one factor. You really need to determine the reason for the poor performance. Were they always poor? Almost every fund has its bad years. Has there been a change in the portfolio manager? etc. - - ------------------------------ Date: 17 May 1999 08:58:41 -0600 From: nytest@ibm.net Subject: response Real estate and mortgage Sw There is an outstanding real estate calculator at: TheMortgageAssoc.com It is very sophisticated so take a moment to see all of what it can do. While at the site you can also search for a lender to complete your project. The site is the new mortgage industry search engine, sponsored by "The Mortgage Association". webmaster@themortgageassoc.com - - ------------------------------ End of persfin-digest V5 #103 ***************************** - To unsubscribe to persfin-digest, send an email to "majordomo@xmission.com" with "unsubscribe persfin-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.