Author Topic: 403b fidelity  (Read 1583 times)

ethilo

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403b fidelity
« on: August 01, 2014, 06:05:48 PM »
Hey folks,
I'm a little curious about this: I just started working at OHSU in Portland OR as a new resident. My salary is $52,000. We have a Fidelity Freedom 2050 fund as a default for our 403b. I'm making maximal roth contributions as well as maximal pretax contributions at the moment. OHSU does not match anything, they instead give a fixed 1.5% contribution to a 401A plan.

Is it worth continuing to contribute to this fund? I want to do Vanguard but the employee 403b plan is through fidelity. Is there a benefit to continuing to invest in the employee plan rather than flying solo and starting up my vanguard plan? I thought the only reason why you would invest in an employee plan is to benefit from the employer's contributions but obviously it's a fixed 1.5% contribution no matter what you invest from your paycheck here...

Thanks!

milesdividendmd

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Re: 403b fidelity
« Reply #1 on: August 01, 2014, 06:26:35 PM »
Hey folks,
I'm a little curious about this: I just started working at OHSU in Portland OR as a new resident. My salary is $52,000. We have a Fidelity Freedom 2050 fund as a default for our 403b. I'm making maximal roth contributions as well as maximal pretax contributions at the moment. OHSU does not match anything, they instead give a fixed 1.5% contribution to a 401A plan.

Is it worth continuing to contribute to this fund? I want to do Vanguard but the employee 403b plan is through fidelity. Is there a benefit to continuing to invest in the employee plan rather than flying solo and starting up my vanguard plan? I thought the only reason why you would invest in an employee plan is to benefit from the employer's contributions but obviously it's a fixed 1.5% contribution no matter what you invest from your paycheck here...

Thanks!

Portland MD's unite!

In general the advantage of a 403B over an IRA is that you can contribute more (ie There is a higher cap.)

If you have access to Fidelity's Spartan funds, I would just keep the money with Fidelity through residency and then transfer them to Vanguard when you graduate. This will allow to you save even more money towards your retirement during residency.

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tskzes

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Re: 403b fidelity
« Reply #2 on: August 02, 2014, 08:40:34 AM »
I also have a 403b fidelity account through my job, they do have a selection of vanguard index funds on there.

Frankies Girl

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Re: 403b fidelity
« Reply #3 on: August 02, 2014, 08:59:34 AM »
Check what funds are offered in the plan. I have Fidelity and I'm perfectly happy with them and they can be just as good as Vanguard. Honestly, they have better customer service and great funds. Just stay away from the professional management fees and high expense ratios, and you'll be fine.

http://www.bogleheads.org/wiki/Fidelity

If you don't have any good options, go with the lowest cost expense ratio fund that aligns with your AA, and you can always roll it over once you leave that job to either better funds (Spartan series rocks) or over to someplace like Vanguard. The main thing is to make sure you're saving and reducing your taxable income at the same time in a tax deferred account.

The Fid Freedom fund has an expense ratio of .78%, and has a breakdown of roughly 65% domestic stocks, 25% international stocks, and 10% bonds. Very aggressive right now since the investment horizon is pretty far out so it's going to probably perform pretty well for you. It isn't a dog of a fund for someone young with time ahead of them and it's a fund that will automatically rebalance itself. I've seen much worse offerings. Sure, you could pay much less on the expense ratio, but if that's the best your plan offers, you'd be okay in there.

But do check to see if any of the Spartan funds (see the link) are offered as those are the super good index funds that match up with Vanguard's offerings. (I was lucky that the Spartan total stock market index is in my 401k)




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