With great trepidation I have just joined the community here . . . knowing that I'm outta my league as a relatively new mustachian, but hoping for a bit of advice from you friendly and knowledgeable folks.
My husband (school administrator) fell for the school district's very convincing Valic snake oil salesman 11 years ago and chose Valic for a 403b plan to supplement his regular retirement plan (pension). He was sure it was all a great deal and we were too busy with work, babies and paying off two big student loans to take the time and really research things. Full disclosure: we're both major right-brainers (or at least what used to be thought as right-brainers). Big on creativity, expression, ideas . . . but both of us would rather have a root canal than have to sort through dry, boring, financial mumbo-jumbo. So I think that just having someone sit down with us early in our marriage and assure us that if we just went with their particular 403(b) plan we'd be ship-shape financially by retirement made us feel as if we'd done our homework. (Now I know much better . . . hindsight always being 20/20 and such).
Over the last five years we've been coming gradually into Mustachianism by paying off all debt (mortgage is all that's left now), getting out of a nightmarish rental house ownership situation, and learning to live much more fully by spending less. During this entire time, we've been contributing to that Valic 403b: total contributions to date (2003-2014) have been $47,000, current account value is $77,463. I don't know if I need to share the whole breakdown of the plan: Socially Responsible Fund, Midcap Index Funds, Stock Index funds make up more than 50% of the account. Anyway, the more I read now about these tax-sheltered annuity plans and the companies that offer them, the more confused I get. The general consensus that I've found online is that Valic stinks (mainly due to fees) and that one should get far away from them, in spite of surrender fees (for us that would be 5% or more until age 59 1/2, but 10% can be transferred annually penalty-free). My husband is 53, so it will be six years until he can move all the money without paying a surrender fee.
Questions: Our school district now offers a Vanguard 403b plan. Looks better in terms of fees (of course), plus we know now about how Vanguard operates and would really like to have our money with them. (Plus, we hate getting constant phone calls and emails from the smarmy Valic account manager). Should we move this money over to Vanguard gradually, 10% at a time? Bite the bullet and pay the surrender fee now to transfer it all? We also know it's time to open a Roth IRA. Should we keep the 403b money where it is now and just open an IRA with Vanguard and contribute to both? Not sure if we can max out a Roth IRA each year and keep contributing to the Valic 403b, but just wondered if anyone had some general advice based on their experience with Valic and/or 403b plans.
Many apologies for my lack of in-depth knowledge and not knowing all the correct lingo (I'm trying to get up to speed in this area, honest!). Thanks in advance for any wisdom offered to this lowly neophyte.