Author Topic: How to pick a retirement provider?  (Read 554 times)

Chickadee

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How to pick a retirement provider?
« on: August 02, 2019, 07:45:19 PM »


My employer gives me a choice of Voya Fidelity Metlife and AIG

I picked Metlife for the 403...and have a fiduciary agent that is paid by our employer.
He never told me about a 457 option.. figures for some loopy reason our employer has 457 agreement only with Voya and AIG!

Learning so much here.... I am feeling crumbs about not doing my 457 when I could have, passing over a 6 figure nest egg so far but I guess better late than never. Trying to fix that ASAP with space in this year.

So ' stachians what would you do?

1. Switch to one over another based on stats ? If so how do I "pick"?
2. Do all with Voya or AIG?

Thank you for guidance. I am feeling pretty sad to learn what I "missed out" on and tax wise also but am cheered on by learning and by appreciating better now than never as I have 10 years to retirement (not as early for FIRE 'stachians and as I would like ...but early enough by society standards! At least on TIME comfortably)

MDM

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Re: How to pick a retirement provider?
« Reply #1 on: August 02, 2019, 08:09:34 PM »
In most cases, one should go to insurance companies for insurance and to investment companies for investments.

Of those four, three are insurance companies.  Fidelity is an investment firm.

Check the fees for the same investment, e.g., an S&P 500 index fund, from all, but it's likely Fidelity will be best.  Unless your employer's plan makes all options bad....
« Last Edit: August 02, 2019, 08:36:40 PM by MDM »

Another Reader

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Re: How to pick a retirement provider?
« Reply #2 on: August 02, 2019, 08:18:20 PM »
Fidelity is likely the best option for the 403(b).  Depending on the options, Voya will likely be better than Metlife.  Voya may have actual investment options while Metlife likely will only offer annuity products.

Is your employer private or public?  If private, the assets in the 457 plan are considered the property of the employer.  You could lose the money you have in the plan if the employer files bankruptcy.

Chickadee

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Re: How to pick a retirement provider?
« Reply #3 on: August 02, 2019, 08:58:46 PM »
Thank you

I will start by looking into products offered then.
I am worried about having two accounts but I guess that’s just my anxiety about messing things up further.
I also loathe having to move accounts. I understand though that there will be no tax on this movement since it’s not taking money personally out.


My employer is the state university, the state I live in does fairly well with tourism. Not a private company.

I went to one of our senior workers hearing this - he is 35 years with company. He said he has always done it.


terran

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Re: How to pick a retirement provider?
« Reply #4 on: August 03, 2019, 06:22:44 AM »
I agree that Fidelity is likely the first choice. I've seen some good options in Voya plans too, and you should certainly look at the options for the others before deciding not to use a plan. Governmental 457 plans are great for early retirees because unlike all other tax advantaged plans there are not additional penalties (only regular tax) for withdrawing before you're 59.5 years old. There are ways to get your money out of the other plans early too, but you have to jump through some hoops. I'd definitely contribute to that unless the investment options are really terrible.

As you look through the plans for investment options look for index funds which often have the word index or idx in them. Anything from Vanguard is likely to be good.

If you're comfortable posting the state you work for people here can probably take a look a look at your options as that information is usually publicly accessible. If you'd rather not post that on a public forum (which would be understandable), you can send me a private message and I'd be happy to take a look. My wife works in higher ed, so I look at various 403(b) plans kind of a lot when she's applying for jobs, and I find it kind of fun to see what's out there from different schools :-). It would be more work, but you could also post a list of all the available funds (make sure you also include the expense ratio) from the different companies and we can give advice that way too .

Chickadee

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Re: How to pick a retirement provider?
« Reply #5 on: August 06, 2019, 06:23:49 AM »


Thank you everyone - and Terran for your offer to help !
I work for the state of florida.
I spent Monday morning "setting it up" with HR and on the phone so I could get things going/ agree to money being taken from paycheck (now confirmed to start Mid Sept paycheck as I am on 26 pay periods the Sept 1 - Sept 15th will start withdrawing!) baby step done!

These are the plan options - more than I initially said above from the phone call where I called HR to ask about it.

https://www.myfloridacfo.com/DeferredComp/

Yesterday at lunch I asked co workers what do most persons use.. most persons were very vague and not very helpful or open! I am surprised how I have worked here so long and we never share this information.
Hmm very glad I found this community!


terran

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Re: How to pick a retirement provider?
« Reply #6 on: August 06, 2019, 08:04:51 AM »
My guess is they aren't being intentionally vague or evasive. They probably don't know/remember or haven't set anything up at all.

I took a look at your investment options linked from the top of the plan providers section and it looks like you have a couple of decent options you could go with. None of them are perfect, but definitely workable, depending on what options you have elsewhere and what you desired asset allocation is.

Nationwide
Vanguard Institutional Index (S&P 500) VIIIX 0.02%

Empower Retirement
iShares U.S. Aggregate Bond Index BMOIX 0.10%
Vanguard Small Cap Index VSCIX 0.04%

AIG (formerly VALIC)
Vanguard Total Stock Market Index VSMPX 0.02%

T. Rowe Price
T. Rowe Price Equity Index Trust (S&P 500) N/A 0.06%

VOYA
Vanguard Long Term Bond Index VBLLX 0.05%
VOYA US Stock Index Portfolio (S&P 500) INGIX 0.27%
Vanguard Mid-Cap Index2 VMCIX 0.24%
Vanguard Small Cap Value Index2 VSIIX 0.26%

Given these options I would probably go with AIG (formerly VALIC) as it offers a lower expense version of the oft recommended VTSAX. If you go with this you'll need to get any bond and international exposure elsewhere. My only hesitation here is that VALIC can be a little hard to deal with. My wife substitute taught for a district with a VALIC 457(b) and it was a bit of a pain to get it rolled out. It worked out in the end, but it required getting the district to sign off and we no longer lived there at that point. Not the end of the world, just something to keep in mind if you leave this employer.

If you wanted to get both stock and bonds in your 457 you could go with VOYA, but you'd have to do more work get the stock funds to sum up to the total market.

I didn't see any good (low expense) international investment options, so you'll need to get that elsewhere if you want. Your 403(b), an IRA, or a taxable account would all be possibilities.

Back on the the main plan page it says you can invest at Schwab with "Enrollment available through Nationwide," so you could find out what investment options that opens up and any other details. I would only both with that if you need to get bond and international investments in your 457(b). If you can get those in other accounts I would just go with AIG (formerly VALIC).

I actually just found the full FAQ which has a question "What funds in the Plan have the lowest fees?", the response to which pretty much mirrors what I wrote above, so that's pretty cool of them. You might find other good information in that FAQ.

In that FAQ I see that investing with Schwab costs $25 per year and appears to give you access to a full brokerage. You should confirm details, but given that Schwab tends to have good low expense index mutual funds and ETFs that trade commission free, I would say this is probably a good option if all your investing will be through your 457(b), but I'd probably stick with my AIG recommendation if you have other accounts.

terran

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Re: How to pick a retirement provider?
« Reply #7 on: August 06, 2019, 08:18:32 AM »
I also took a look at the University of Florida 403(b) investment options. You'll want to confirm that I'm looking in the right place as there seem to a couple of different options depending on a few things that didn't spend enough time to figure out (seems like employee type, retirement program, and maybe campus).

I would switch from Metlife to Fidelity where you'll want to user their Spartan funds:

Fidelity Spartan® 500 Index Advtg® FUSVX 0.05%
Fidelity Spartan® EMkts Idx Advtg® FPMAX 0.20%
Fidelity Spartan® Extnd Mkt Idx Advtg FSEVX   0.07%
Fidelity Spartan® Glb ex USIdxAdvtg® FSGDX 0.18%
Fidelity Spartan® Infl-Prot Bd Idx FidAd FSIYX 0.10%
Fidelity Spartan® Interm Tr Bd Idx Advtg FIBAX 0.10%
Fidelity Spartan® Intl Idx Advtg FSIVX 0.12%
Fidelity Spartan® L/T Tr Bd Idx Fid Advt FLBAX 0.10%
Fidelity Spartan® Mid Cap Idx Advtg® FSCKX 0.09%
Fidelity Spartan® Real Estate Idx Advtg® FSRVX 0.09%
Fidelity Spartan® S/T Tr Bd Idx Fid Advt 0.20%
Fidelity Spartan® Total Mkt Idx FSTVX 0.05%
Fidelity Spartan® US Bond Idx Advtg FSITX 0.10%

Assuming you go with AIG for the 457(b) I've bolded the options I'd go with to fill out a 3-fund portfolio. I think Fidelity has stopped using the Spartan branding, so it's possible this list is out of date, but I would bet they still have equivalent options, and I think the tickers are still the same.

As far as the other options, I would steer clear of Metlife, AIG (for the 403b) and VOYA. TIAA looks like it has some decent target date funds if any of your coworkers end up asking your advice and want a one fund option.
« Last Edit: August 06, 2019, 08:21:11 AM by terran »