Author Topic: So my girlfriend moved in...  (Read 3618 times)

ingrownstudentloans

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So my girlfriend moved in...
« on: July 01, 2014, 09:19:43 AM »
and we are going through financial things, trying to figure out what we want to do re: budget and money, and in going through some of her retirement plan information we come across 2 annuities with current cash value (combined) of about $7,000.  These were recommended retirement vehicles for her at her former employer (state school district).  She does not contribute to these policies anymore and I was wondering what you mustachians thought is the best thing to do with them.  From what I can tell, they are 403(b) accounts, and I am not very familiar with these types of accounts.

Thanks in advance.

mlipps

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Re: So my girlfriend moved in...
« Reply #1 on: July 01, 2014, 10:00:26 AM »
You might get better responses with a. a more descriptive thread title like "What to do w/annuities held in 403b account" or b. on Bogleheads.org, where there are more people who might have held a similar financial product.

You'll probably need to do some digging to find out if she can move the money to something other than an annuity and if so, what the fees associated with it would be. My first inclination is that there are likely tons of fees in this annuity & she would be better served rolling the money into an IRA & investing it in an index fund or similar.

rugorak

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Re: So my girlfriend moved in...
« Reply #2 on: July 01, 2014, 10:22:49 AM »
403b is the non-profit version of 401k. So she should be able to roll over the money to a rollover-IRA. It would just be whatever the cash value is. The annuity piece may complicate it some but just make some calls. Whichever company holds it should be able to tell you what your options are.

keepitsimple

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Re: So my girlfriend moved in...
« Reply #3 on: July 01, 2014, 10:24:44 AM »
They had annuity options?  I used to have a 403 (b) and mine was pretty much the same as a 401(k) with various fund choices.   I held Vanguard S&P 500 index shares in it and all of the withdrawal/rollover restrictions of 401k's applied.   I would definitely look into rolling into an IRA.

mlipps

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Re: So my girlfriend moved in...
« Reply #4 on: July 01, 2014, 10:30:45 AM »
They had annuity options?  I used to have a 403 (b) and mine was pretty much the same as a 401(k) with various fund choices.   I held Vanguard S&P 500 index shares in it and all of the withdrawal/rollover restrictions of 401k's applied.   I would definitely look into rolling into an IRA.

A lot of 403(b)'s have annuity options. Valic & TIAA Cref are major companies that commonly offer them, among others.

ingrownstudentloans

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Re: So my girlfriend moved in...
« Reply #5 on: July 01, 2014, 10:32:01 AM »
Thanks for the replies, having just discovered these accounts last night, I did not have a lot of time to figure out what they are or what we can do with them.  We will have to call the companies to see what we can do, but I appreciate the initial input.

KIS - yeah, they had annuity options.  And when I asked her why she picked the one she did, she didn't really know what she picked or why. 

I have directed her to the main MMM site and she is starting her financial education.  I have faith that with some guidance she will get there. 

In the event she stumbles onto the forum and this post - I love you, boogs.


La Bibliotecaria Feroz

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Re: So my girlfriend moved in...
« Reply #6 on: July 01, 2014, 12:22:09 PM »
I had a 403(b) and successfully rolled it over into a Vanguard Rollover IRA. I don't know if the investment type matters for being able to do that, but the Vanguard people were SUPER helpful, so she can just call them. I just dumped pretty much all of mine in the Total Stock Market Index, which is almost unbeatable.

ingrownstudentloans

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Re: So my girlfriend moved in...
« Reply #7 on: July 01, 2014, 12:44:45 PM »
Great advice, frugalparagon - thanks so much.  I didn't even think of calling another company (like VG) to let them work through the red-tape issues.  I think that is what I will do.

data.Damnation

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Re: So my girlfriend moved in...
« Reply #8 on: July 01, 2014, 12:49:21 PM »
An old-school name for a 403(b) account is "tax-sheltered annuity" because annuities used to be the de facto investment option for a 403(b), though nowadays most people invest in mutual funds instead. Are you sure she's invested in an annuity? If so, is there a surrender fee associated with surrendering the annuity? Typically, if you sell an annuity less than 5 years after opening it, you pay a substantial penalty. I have a feeling that she is invested in mutual funds, not an annuity, and if that's the case, you should be able to sell the mutual funds and roll the money into an IRA just like you would with a 401(k).