After a recent visit with my Edward Jones advisor, I was informed of a new policy that Edward Jones is utilizing. They are moving towards a different model of fee structure. Now, I'm a firefighter, so I'm not investing thousands and thousands... more like hundreds, and at times, tens! So according to my advisor, any change in my investing would have started my account under the new fee structure, which would cost me a lot more money in fees over the year. I've been wanted to invest a slight bit more, but I would be losing money each year if I made an increase in investments due to the fee structure.
With this change, I started to look elsewhere for an investing vehicle that I could play around with. I like the idea investing in some stocks that I'm interested in, but can't afford that kind of risk when investing in only one stock. After some searching, I found Acorns, Robin Hood and Stash. I signed in, messed around with each, and I ended up with an Acorns account and have been enjoying it over the last couple of months.
I wanted Robinhood to work for me the most. I loved the idea of zero-commission trades and the fact that I could choose which stocks I wanted to invest in. But, quickly I learned, Robinhood was not supported by my regional bank 1st Source Bank... Bummer, onto the next one.
1977 Police Officers' and Firefighters' Pension and Disability Fund
As a firefighter, my retirement plan is based largely on a pension, called the 1977 Police Officers' and Firefighters' Pension and Disability Fund, whew... a mouthful. It's also called the 77 Fund or I'll call it the Fund. The Fund was created to serve public safety officials in the State of Indiana. Cities/towns and employees contribute to the Fund, which then pays benefits to retirees, disabled members and survivors of members. The Fund has been performing well and is well "funded", meaning there is enough money in the fund to pay the members their share.
Benefits and Contributions
The money that goes into the Fund comes from both the city or town, and the employee. According to IN.GOV and the latest information, the contribution percentage is around 23-25%. 17-19% of this comes from the employer, leaving the last 6% coming from the employee. With that being said, the employer may chose to pick up some of the employees 6%, which is the case on my department.
After 20 years of employment, you become "vested" or allowed to collect some of the benefits from the Fund. You can't collect those benefits until you are 52 years of age. So, after 20 years of service, you can collect around 50% of base salary, which in our case is "New Guy Salary", aka Not Much Salary. You can continue to improve your percentage until you hit 32 years of service, capping out at 74% of Not Much Salary. You will continue to collect at that dollar amount until you die. There are a couple different stipulations and situations that can cause that to change, but those are for another post.
Why it's good?
I wandered into a nice little way to keep track of my mortgage and the equity of our house inside of our budgeting software YNAB. The primary goal for this was to factor in the equity in our house into our net worth. YNAB has a nice feature inside the Reports tab that shows Net Worth. It's fun to see the line on the bar graph escalate as your net worth increases.
My wife and I swear by budgeting. This means creating a budget every month. We have been doing this together for 6 or 7 years, and it's been amazing. We started off by using Microsoft Money, but Microsoft stopped supporting that software. After trying a couple different tools, we landed on YNAB, and it's been great. YNAB adds the incentive to "age" your money, giving you a number of how old your money is. This creates the desire to live on last months income.
YNAB features an auto import feature for our bank accounts, which makes tracking accounts very easy. The budgeting is user friendly. YNAB also provides all kinds of support. Everything from podcasts, workshops, and newsletter articles. YNAB is $50 a year, and well worth every penny. Do yourself a favor, get YNAB. Why? Because you need a budget!
Jack of All Trades, Master of None