Posted 07 March 2006 - 07:16 PM
I am in Rock Hill, SC. I was informed of a plan today offered by the State. I can do either a 401(k) or a 457. The custodial fee is a flat 0.18%, and there are 17 funds from which to choose. Of course, the funds have expense ratios in addition to the 18 basis point custodial fee. The program is called South Carolina Defferred Compensation, and is run by CitiStreet. The choices seem pretty good, and include some funds that are ordinarily load funds that are offered for no load (according to the person I talked to on the phone today). If I enroll in one of these programs, I can stop my Valic contributions, transfer the assets to the Vanguard 403(b)(7), keep the American Funds (since I already paid the loads and the fees are not too high), and then start the 457 or 401(k). Any thoughts on starting a 401(k) or 457?
Posted 07 March 2006 - 11:43 PM
I wonder, are you able to contribute to a 401(k) or a 457, and a 403b. So apparantly you can contribute in two different plans for additional moneys invested. Well, I do not have enough knowledge to advise as to which of these plans are superior, and which one to contribute to first. I'm sure one of the other posters can help you in deciding. (Have you been contributing to a ROTH IRA? Are you eligible according to the Fed taxing guidelines.).
As far as the plan offered by the State, the .18 appears to be a wrap around, in addition to any expenses, 12b-1 fees, any possible surrender charges by the vendors.What are these fees?
I believe that you mentioned getting Vanguard approved by your district, which in my opion is the number one choice.
Are you sure that there are not any no load fund companies currently approved by your district?
I would consider stopping Valic now. Remember that there are surrender charges that will happen for about 5 or 6 years on new money invested with them. Don't worry, you will find another provider. You can always put a little extra money in during other pay checks this year, or if your income is under the gov. requirement for investing, invest in a ROTH IRA.
Posted 08 March 2006 - 08:27 AM
There are also no loads - sounds like a decent plan, and I think I am going to go with it. I think I will also do a Roth, which I have not been doing yet (I do have a traditional IRA). Thanks for your input - I think I am developing a plan that will get me out from under these fees that are funding other people more than they are funding my retirement!
Posted 08 March 2006 - 05:08 PM
Is it against the law to solicit others of like mind to invest, in a product that would be to their advantage? I'm sure if 50 people(or even less) show up, the product will be instituted. Apparently, the human resources people at your company do not have your best interest in mind.
The next step is for you to obtain financial education, start with Dan Otter's book of this site "teach and retire rich", or John Bogle's Common Sense on MutualFunds, or any book by Swedroe.
Posted 14 March 2006 - 01:40 PM
I am sad to say that the investment education has been taken care of, and I am just now getting around to straightening out the mess that I made before I knew any better.
What I was told is "They are not allowed in the schools to solicit nor can they distribute materials to the schools." (copied directly from the email from the benefits administrator). I wonder if that applies to me? Vanguard sent me some nice brochures to share with coworkers iso that we might be able to establish an account for our district. 50 is a very big number, however. Any ideas on how to amass 50 people without breaking the district's rule? I have nearly decided to give up and go with the SC Deferred Compensation Plan, but I would consider a last-ditch effort to bring in Vanguard's 403(b)(7) plan.
Posted 14 March 2006 - 05:06 PM
Your not the only one. I , and many others who post at this site also were taken advantage of before we developed an investment education.
"What I was told is "They are not allowed in the schools to solicit nor can they distribute materials to the schools." (copied directly from the email from the benefits administrator). I wonder if that applies to me? Vanguard sent me some nice brochures to share with coworkers iso that we might be able to establish an account for our district. 50 is a very big number, however. Any ideas on how to amass 50 people without breaking the district's rule? I have nearly decided to give up and go with the SC Deferred Compensation Plan, but I would consider a last-ditch effort to bring in Vanguard's 403(b)(7) plan."
It seems to me that soliting is referring to paid "sales advisors". Since you are an employee, I beleive that the solicting rules does not apply to you. Just go for it. I truely believe that if you walk in with 10 others, Vanguard will be instituted.
I didn't look real close at all the funds in the SC Deferred Compensation plan, however the investment in the institutional 500 seems OK for now. As you know this investment is not diversified. You have to look at SC Deferred to see if there are other funds that you will be able to invest in to achieve better diverification. Also, if you can get Vanguard into your district that would be the best source. )BTW, I think that you mentioned that there is no surrender charges from SC Deferred).