Author Topic: 403b question  (Read 2784 times)

azu612

  • 5 O'Clock Shadow
  • *
  • Posts: 36
403b question
« on: December 10, 2016, 08:09:34 PM »
I am a teacher and I am contributing to the 403b account offered by my district.  They say that you have to contribute to one of the accounts that they sponsor.  I am with AXA.  The district offers a 600 dollar match each year.  I only contribute enough to get the match.  I've heard a lot about these being the worst accounts out there.  However, I figured it was worth at least getting the match.

Does anyone have any advice on what I could do with this account to maximize the money?

MDM

  • Walrus Stache
  • *******
  • Posts: 9731
Re: 403b question
« Reply #1 on: December 10, 2016, 08:52:29 PM »
Does anyone have any advice on what I could do with this account to maximize the money?
Put more into it.

You should look at all the fund options available.

See also To 401k or not to 401k? That is the question. That situation is similar to yours.

Sean Og

  • 5 O'Clock Shadow
  • *
  • Posts: 79
Re: 403b question
« Reply #2 on: December 10, 2016, 08:56:23 PM »
Usually there are a number of different options within a 403b, what are your alternatives to AXA?

Aspire is who my wife is with and offer access to vanguard. Security Benefit also have a good option with the NEA DirectInvest plan.

azu612

  • 5 O'Clock Shadow
  • *
  • Posts: 36
Re: 403b question
« Reply #3 on: December 11, 2016, 07:16:12 PM »
This is the list of possible providers aside from AXA:  GALIC, Lincoln Investment, Met Life, NY Life, Security Benefit Life, and Valic.

I've heard there are fees if you transfer.  I'm not really sure what the best course of action is, or if I should tell the broker to put all of the money in index funds, etc....

Gin1984

  • Magnum Stache
  • ******
  • Posts: 4788
Re: 403b question
« Reply #4 on: December 11, 2016, 07:29:09 PM »
Check out Met Life's fees and funds.  Sometimes they are ok, and other times they are awful.

Sent from my SPH-L710 using Tapatalk


MDM

  • Walrus Stache
  • *******
  • Posts: 9731
Re: 403b question
« Reply #5 on: December 11, 2016, 07:33:17 PM »
This is the list of possible providers aside from AXA:  GALIC, Lincoln Investment, Met Life, NY Life, Security Benefit Life, and Valic.

I've heard there are fees if you transfer.  I'm not really sure what the best course of action is, or if I should tell the broker to put all of the money in index funds, etc....
Unfortunately, some 403b plans make it difficult to determine the fees you pay for different vendors and funds.

See NY Times first in a series about 403(b)s with public K-12 for discussion and links.

Although it may be difficult or tedious, getting a list of funds available to you and the fees charged per fund (and per vendor if applicable) is the only way to make an informed choice.

lhamo

  • Walrus Stache
  • *******
  • Posts: 9972
  • Location: Seattle
Re: 403b question
« Reply #6 on: December 11, 2016, 08:26:13 PM »
Given the list of providers, and the heavy presence of insurance firms, I have a sneaking suspicion they are trying to get you to put your 403b funds into an annuity -- which is totally useless/redundant but unfortunately that is how a lot of plans for school districts are set up.

To learn why this is bad and what some of your alternatives might be, try the website 403bwise.com.

If you can post some of the fund codes you have available to you, people here might be able to help you pick the less ugly ones.


azu612

  • 5 O'Clock Shadow
  • *
  • Posts: 36
Re: 403b question
« Reply #7 on: December 12, 2016, 06:26:01 AM »
I'll take a look.  So if they allow me to put the money in index funds this would be best?  This is why I'm hesitant to add money to this account vs. another investment. 

Gin1984

  • Magnum Stache
  • ******
  • Posts: 4788
Re: 403b question
« Reply #8 on: December 12, 2016, 06:56:20 AM »
I'll take a look. So if they allow me to put the money in index funds this would be best? This is why I'm hesitant to add money to this account vs. another investment.
Yes, depending on the fees.

nlsquared

  • 5 O'Clock Shadow
  • *
  • Posts: 15
  • Age: 52
  • Location: Northeastern US
Re: 403b question
« Reply #9 on: December 12, 2016, 07:14:09 AM »
Yes, depending on the fees.
+1 on this.

I got all starry eyed when I saw that our 403b plan began offering Vanguard fund options.  After doing some digging, I found that I would be charged a lot more in fees for carrying these funds in my plan.  The lower cost options were performing nearly as well, so I opted to stay with those.


azu612

  • 5 O'Clock Shadow
  • *
  • Posts: 36
Re: 403b question
« Reply #10 on: December 12, 2016, 07:32:08 AM »
I'll check it out.  Thanks!

mskyle

  • Pencil Stache
  • ****
  • Posts: 693
Re: 403b question
« Reply #11 on: December 12, 2016, 12:34:12 PM »
Another thing to remember is that if/when you leave your job (or rather leave the school district) you can transfer the money in your 403(b) to a traditional IRA wherever you want. So the crappiness of the choices matters a lot if you're planning on staying for your entire career, but if you're only planning to put in 3-5 years, the tax savings are probably worth paying a few years of high fees (although you will still want to avoid annuities and "load" funds).

azu612

  • 5 O'Clock Shadow
  • *
  • Posts: 36
Re: 403b question
« Reply #12 on: December 12, 2016, 06:14:57 PM »
I just tried to ask the financial advisor about the fees and he basically just sent me some long confusing list and said we could meet.  I'm thinking I should just tell him to put it all in the index funds and call it a day.  I'm not sure how long I'll stay.  It's good for now.

Sean Og

  • 5 O'Clock Shadow
  • *
  • Posts: 79
Re: 403b question
« Reply #13 on: December 12, 2016, 06:16:22 PM »
This is the list of possible providers aside from AXA:  GALIC, Lincoln Investment, Met Life, NY Life, Security Benefit Life, and Valic.

I've heard there are fees if you transfer.  I'm not really sure what the best course of action is, or if I should tell the broker to put all of the money in index funds, etc....

Out of this list my first stop would be Security Benefit and the NEA DirectInvest plan, of course the Security Benefit adviser may not be thrilled!! You don't need to be an NEA member to enroll either.

https://www.bogleheads.org/forum/viewtopic.php?t=180418

http://www.nearetirementprogram.com/nea-directinvest

https://www.securitybenefit.com/individuals/products/mutual-fund-custodial/nea-directinvest.aspx