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dankupper

Best 403B Vendor(S)

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Hi All -

 

I need your opinion on the best 403b vendor(s) from the following list. This list comes directly from my district. I'm particularly interested in low fees/best investment options. I actually already have an account opened with Met Life, but am wondering if there are better options or if it is okay to stay with MetLife for the long haul.

 

I look forward to hearing your input. The list is as follows:

 

1) Ameriprise

2) Aspire Financial Services

3) AXA Equitable

4) First Investors Funds distributed by Foresters Financial

5) Franklin Templeton

6) Great American Life Insurance

7) Lincoln National Life

8) Met Life

9) Oldham Resource Group

10) Oppenheimer

11) Security Benefit Life Insurance Company

12) Voya

 

Thank you!

 

Best,

Dan

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You might want to take a look at this Boglehead Wiki that I wrote: https://www.bogleheads.org/wiki/403b_plans_for_K-12_public_school_district_employees

Certainly Aspire, using Vanguard low cost index funds stands out. What state are you in? Some states have excellent low cost 457 plans that can be used instead of, or in addition to, a 403b plan. http://board.403bwise.com/index.php?showtopic=6130

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Dan

 

You don't want to stay with Met Life because it will over time cost you a fortune in fees and will lower your returns. If you go Aspire you can self direct the account to a better choices like Vanguard Index Funds or a Target Retirement Fund which in essence is made up of index funds and is adjusted and managed for you. I would highly recommend going the Vanguard target retirement route for the sake of simplicity. Just pick the fund closest to your probable retirement date. It really can be that simple.

 

By self direct I mean not using an advisor. Just ask Aspire to put you directly in your fund choice. They could explain the procedures over the phone prior to filing out the paperwork.

 

It may be hard to believe that all you need is one fund like a Target Fund to solve your investment problems but it really is a viable and smart option for you. Here is the link to Vanguard TF https://investor.vanguard.com/mutual-funds/target-retirement/#/

 

A 457b as Krow mentions if available might be worth a look as well. All your current choices except for Aspire are not your best choices for various reasons like higher fees and insurance products you don't need. Just remember-low fees matter and simplicity in investing trumps complexity.

 

 

Tony

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Thank you, Tony and Krow36! This is all very helpful. I am a public school teacher in Connecticut.

 

I am going to look into Aspire right away for my 403b. I actually do already have a 457 opened up with Voya, in addition to the 403b.

 

Thank you once again.

 

Best,

Dan

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Dan

 

Just keep in mind. If you put an advisor in the middle of it your cost savings with Aspire will be diminished. You need to pick very low cost funds And opt out of advisors. If you go Vanguard Target fund it is self managed for you . Overall you can't beat that arrangement. The target fund will self diversify . You can go enjoy your life knowing that if you are contributing over your career to this fund you will retire better off than most of your colleagues who are invested in annuities or high fee active funds.

 

I just wish I had followed this path as a young teacher instead of learning the hard way by making tons of mistakes before seeing the light.

 

Tony

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Dan

 

Best wishes going forward. Please let others know about this site and if you have any further questions just post them here.

 

Keep us informed of how things are going.

 

 

Tony

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Thank you, Tony. I will be following up tomorrow and posting again as I'll have additional questions regarding Met Life surrender fees and rolling over the money to a 403b account with Aspire.

 

Best,

Dan

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Okay so I am back after speaking with MetLife. I absolutely want to start a new 403b account with Aspire since their fees are exorbitantly lower, more transparent, and they offer much better investment options.

 

I have two 403b accounts open with MetLife. Here is what I found out:

 

ACCOUNT 1

 

Under 10K in account - 9% surrender fee until 5 years is up. After 5 years there is no surrender fee - opened on January 26, 2015 - 5 years is up on January 26, 2020. I get to move 10% penalty-free, and then the rest is subject to 9% surrender fee.

 

ACCOUNT 2

 

10-20K in account - 9% surrender fee until 5 years is up. After 5 years there is no surrender fee - opened on September 2, 2015 - 5 years is up on September 2, 2020. I get to move 10% penalty-free, and then the rest is subject to 9% surrender fee.

 

As a side note, I also have the option to move this money into a fixed-interest rate at 3% with MetLife (take it out of the market) until the 5 years (2020) is over to avoid surrender fees.

 

Here are my three options:

 

1) Do nothing and stay with MetLife (not preferable).

 

2) Open a new 403b account with Aspire and keep my current money in MetLife until the 5 years is up, avoiding surrender fees. Move the money over to Aspire as of 2020.

 

*If I do option 2, am I losing "steam" in terms of compounding money in the market since my balance with Aspire would now start at zero? This is important to me.

 

3) Open a new 403b account with Aspire and immediately roll my money over from MetLife, taking the hit on surrender fees.

 

What do you all think? What do I do???

 

Thank you!

 

Best,

Dan

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To evaluate 2), I think you need to know what your annual fees are. For example, if your M&E fee plus the subaccount ER add up to 2%, in 5 years you would have payed about 10% in fees! If the money was at Aspire, the fees would be VG's average 0.10% ER plus Aspire's added 0.15% for a 0.25% total, per year. In 5 years, that's 1.25% in fees.

 

Does the fixed-interest annuity also have the M&E fee? Being out of the market for 3 years is a disadvantage to this option. Of course, who knows it could be an advantage??

 

I think most people on the forum in your situation have pulled off the band aid and were relieved to be rid of the high fee annuity. Most of us have experienced more than one expensive financial learning experiences. Often they cost us many thousands--you are catching the problem fairly early.

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I appreciate your insight, krow36. I have decided to move over to Aspire immediately, however I will be avoiding the MetLife surrender fees by rolling over my 10% penalty-free money and then moving the rest over as of 2020 (when the surrender fees expire).

 

I appreciate the help that everyone has given me with respect to this situation.

 

Kindest Regards,

Dan

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Dan,

Congratulations to you for asking the right questions.

 

You can do as planned while taking out 10% annually until 2020.

Also, in the meantime you might want to keep the conservative portion of your overall investment in the guaranteed in Met Life's 3% fixed rate. At AXA (in my not-so-distant past) the guaranteed fund was free of those M & E fees. OR, determine if those M & E fees will cost you more over the next few 'waiting' years than the surrender costs would.

And, spread the word at your CT school. Teachers like you need to hear from teachers like you:)

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