You can..but you probably don't want to. Payroll deductions to a HSA shouldn't get charged FICA. If you do it outside, you are doing it with money you paid FICA on. You would still get the tax deduction doing it outside.

Make the contributions through payroll, find the best of the non-awesome fund choices and then whenever you leave that employer, make sure and roll the HSA over to someone with better options.

Cool, thanks

To avoid large fees I've elected 50% in small cap index (0.2 expense), 25% mid cap index (0.39), and 25% in PIMCO total return fund (mostly bonds / fixed income, some mortgage backed, some cash equivalent; expense 0.47). Cheapest large cap is a growth fund @ 0.74.

Reasonable? I'm young, single, and healthy, but also don't want to have huge swongs in case I have to sell off investments due to a medical emergency.

I went with some sort of Vanguard medium-risk index mix rather than a typical high risk fund for people our age just for that reason. Not sure if it's most EV or not but we've had a lot of medical expenses and will be trying for a baby, so don't want huge swongs either.

You need to verify all of this, but my understanding is you can open your own HSA provided your health insurance policy is a qualifying high deductible policy. Edit - just saw jalexand42's response - good point about FICA.

I also believe you can roll over the money from the employer funded HSA account to a different HSA account. Edit 2 - my understanding is you can roll funds from one HSA to another without leaving employer.

One other thing is, unlike a 401k your employers contribution counts toward your annual max.

So, I'm about 5 years away from retirement (hopefully). I have 3 401k accounts. One is fairly decent.

I know this gets bad press, but I'm thinking about locking the big one in to an annuity. I "think" I can lock up the principle now and even possibly continue to make money on it. Based on my calculations, the lifetime annuity I get from this plus social security plus a small pension should be enough to retire on. That leaves me with a couple of other 401 accounts that I can use for emergencies or for whatever.

I get that the fees on annuities are gross and they are betting on me dying and all that. I really don't have anyone to leave anything to. The stock market just has me nervous right now and it would be nice to have some peace of mind.


thoughts?

Sounds reasonable.

Provide more details if you want more useful opinions

How gross are the fees? No efficient market etc...

Have someone independent of the company selling this review it for you. I would also suggest posting on the Bogleheads forum with all the details.

Caveat emptor.

Need a lot more details on the annuity, but I don't see why this would be preferable than just putting it in something like Vanguard Life Strategy moderate growth. It's likely to outperform whatever the annuity ends up returning. I know you are looking for a guarantee, but will it be inflation adjusted? What sounds good now may look like a pittance in 15 or 20 years.

RE: the Annuity, would echo everyone else's thoughts. More details allow for better advice / input.

Here's an alternative to throw out there that I've been thinking about for my own planning down the road.

https://investor.vanguard.com/mutual...aged-payout/#/

This is a Vanguard fund that basically is totally focused on paying out 4% annually (monthly payments). Low fees, you don't give up upside, and if they do a good job, you don't even dip into the principal much. Kind of like an annuity without the black box aspects, but without the guaranteed return.

Thanks for posting, this kind of question is interesting to me. Hoping you'll share more details as you decide what to do.

I've also looked at the Vanguard managed payout fund. I'm somewhere between 6 and 10 years from retirement unless the company decides they don't need me sooner than that, but I have been considering the managed payout fund as a piece to the payout puzzle.
One more thought I've had that may apply to biggerboat as well. If you defer SS until 70 or thereabouts, and self fund your first x number of years of retirement, you are essentially purchasing an inflation adjusted annuity at rates better than you can get in the open market.
http://crr.bc.edu/briefs/should-you-...cial-security/

Yep, I'm definitely anticipating doing this. I'm decades away from this, so who knows what could change between now and then, but I definitely planned on delaying SS.

Thanks guys.

I talked to an annuity specialist at vanguard. They aren't on commission so I think I got good input. If you go through them, they basically send out requests for quotes from a bunch of companies and take the best one.

Although he never really came out and said it, I could tell he wasn't high on me doing this. I think the main reason was locking up too high of a percentage of my savings in it. Not sure, though

See above. He gave me quotes from a handful so I could get a feel for the dollar amounts.

Yeah.

This looks interesting, although it seems like it tries to preserve principal which is good I guess but certainly reduces the monthly payment vs. annuity. I think I want to run out of money the day I die

Yep. I'm looking to self fund at least from 65 to 66 1/2 and might be able to hold out until 70.

I never even thought about this stuff 10 years ago.

So, someone asked for more details. What sort?

I believe there are managed payout funds that try to run you out of your money by a target date as well as others that try to return at a higher rate while sacrificing principal. Vanguard may not have those, but I think there's a wide variety of options out there.

With the Vanguard fund, they set it at 4% so you will almost certainly have enough money for 30+ years. Nothing stops you from selling some of the fund every year if you want more than 4%. The point is, you have more control, more upside, way lower fees, and hopefully will automatically track with inflation...all of which you might sacrifice with an annuity.


Details could run the gamut from anything all the way up to full disclosure of account values, desired incomes, etc. All depends on how comfortable you are. Like someone suggested, posting that level of detail on the bogleheads forum might get you super valuable feedback.

Speaking for myself, I was wondering if you were talking about a complex variable annuity with a ton of sales load and promises that are only kept if the market performs well, or a simple low load annuity. I'm far from an annuity expert, but the fact you went through Vanguard would seem to be a good first step. I'm not certain they wouldn't put you in a bad situation, but I think it is unlikely. This article speaks more intelligently on the subject of annuities then I can.
https://www.forbes.com/sites/feeonly.../#2cda4fc47990

My own thought on the matter is I wouldn't be looking to lock in an annuity just yet, as I suspect that the payouts might get marginally better in a rising interest rate environment, which seems to be the case in 2017 (3-4 rate hikes expected.). Someone correct me if I'm wrong.

Yeah, here it is:

https://personal.vanguard.com/us/fun...NT&FundId=1498

It "targets" 4%.

I'm looking at this and I'm not sure I understand the distribution. It says it is $.05840 and the share price is $18.00. I "think" that comes out to a little less (.0389) than 4%.

If this is correct, I did a hypothetical on my current balance. I could probably make that work for my situation but was hoping for more. I would have total control to withdraw more if needed.

I'm starting to lean away from the annuity now. For those of you that wanted more details on the particular annuity, I really hadn't drilled down that far. I was more sort of just exploring the idea of an annuity.

Also, what is "bogleheads"?

https://www.bogleheads.org/wiki/Getting_started

"Welcome to the Bogleheads' Getting started page! First things first. Don't panic! There's a lot of information available to help. Take your time and get organized.

The Bogleheads® motto is Investing Advice Inspired by Jack Bogle. We are part of his crusade "to give ordinary investors a fair shake.""

There is a forum for posting questions and sharing ideas, as well. Its very active, and well moderated.

Yeah, the 4% is just a target, based on the idea that will last 30 years under a very conservative projection.

In a reasonable/good market, you could expect it to return the 4%, plus you would see potential appreciation in the money invested.

Oh wow. This is awesome. Thanks.

My biggest struggle right now is having to change my mindset from "save and build" to "withdraw'. I've been doing the former for a long time and getting my arms wrapped around the other side of things is proving to be challenging.

[QUOTE=biggerboat;51959771]Oh wow. This is awesome. Thanks.

My biggest struggle right now is having to change my mindset from "save and build" to "withdraw'.

Your welcome. At 5 years to retirement your mindset should be geared to protecting what you got, which I guess is why you were leaning to the annuity. Hopefully your asset allocation isn't too aggressive.

This is the conventional wisdom, but it's wrong. Depending on your retirement age, you should be planning to live at least another 20+ years which means you're giving up way too much by not staying invested somewhat aggressively.

If you have a significant pension or other guaranteed income, you can be especially aggressive. If your pension is enough to guarantee your basic living expenses, there's no reason not to be >100% in equities. But you might also consider spending it on a second home, etc.

How do you get above 100% in equities? Probably a dumb question but I couldn't find anything by searching Google.

margin trading

As far as stinkypete's post, I agree that the calculators all show staying aggressive gives the highest probability of the money not running out. But that assumes people, 1) can sleep at night, 2) don't panic and sell when the going gets rough.

The calcs I've seen test like 80/20 versus more trad 50/50 or 40/60. I've never seen anyone recommend greater than 100 for those approaching or in retirement

If 50% of your retirement funds are coming from a fixed benefit pension and the other half is your self-managed portfolio, if you put it all in equities you're effectively 50/50. So in that case it wouldn't hurt to go 120-140% equities.

Are corporate pensions in Canada guaranteed?

Cause in 'Murica, companies just bk and offload the entire pension to PBGC (Pension Benefit Guaranty Corporation), leaving you with less than half of what you were promised.