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Gina NY

choosing a 403b plan

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Gina, I think your AF funds are not terrible funds, but I wouldn't want to own them. They tend to include both US and International stocks, as well as bonds in some cases (Cap Inc Bldr). Figuring out your asset allocation is more tedious than necessary, as is rebalancing. I think you have already paid the front-end load, so that's a sunk cost which you won't pay again (unless you buy more). The reinvestment of their annual dividends and capital gain distributions doesn't pay the load.

So you could keep the account but not make any further contributions. You don't have to transfer it to the Aspire 403b. You can have more than one 403b account. Just don't contribute further and pay more load fees. After a year or two you could compare how it's done with your new Aspire 403b and then decide what to do with it. 

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Gina,

Don't forget to ask your district about the 457, like mentioned previously on this thread. There is a very good chance you have that as an option but you wouldn't know because there are no sales reps. And your district will not mention it other than saying it's an option. Once. They don't want to be '"accused" of steering you. It is also self-directed but very likely the least expensive option versus any 403b vendor, even Aspire. If they tell you no, it's not available, ask them to find out how to add it. Tell them it's a better option and you want it.

I know you said you are not comfortable managing yourself. You have received excellent guidance here to manage yourself. It may seem like something you couldn't do because a) it's your money and b) sales reps make it sound confusing to you, intentionally.

That being said, if you are adamant about not managing yourself, use the search for an Aspire local advisor on Aspire's website. There are a couple in your area, one who I have used for my 403b. He will also graciously advise you on choosing the best 457 funds too. You can transfer your 'old' 403b to the Aspire platform to sit and grow, and then direct future contributions to the 457 if you have it. 

That is how I handled it but I also had to fight to bring Aspire to our platform. Always remember, if you don't ask, the answer is always NO!

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17 hours ago, MoeMoney said:

That being said, if you are adamant about not managing yourself, use the search for an Aspire local advisor on Aspire's website. There are a couple in your area, one who I have used for my 403b. He will also graciously advise you on choosing the best 457 funds too. You can transfer your 'old' 403b to the Aspire platform to sit and grow, and then direct future contributions to the 457 if you have it. 

Moe

I agree with most of what you said. However Target funds are already managed internally so having to pay for an Aspire advisor would not only be redundant but also much more costly. I think Gina can get that done without the middleman which would be the ideal situation. 

I also don't understand how the advisor associated with Aspire would help her with her 457b plan since you yourself said correctly that state sponsored 457 plans don't usually have sales reps. Maybe its different in New York?

Thanks and good to hear from you

Tony

 

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You are right about the Target fund choice being lower cost. The only reason I thought Aspire for Gina was because she stated she did not want to self-direct. If she wanted an advisor, Aspire would likely be her best bet. Then, once she is with an Aspire-approved advisor, they would "graciously' glance at her 457 options and help her choose as a courtesy. 

Finding this group is the best thing Gina could have done.  And seeking guidance and taking action too. I strongly encourage Gina to go and share this with all her colleagues. 

You are all so generous and helpful with your time and wisdom. Thank you!!!

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52 minutes ago, MoeMoney said:

 

You are all so generous and helpful with your time and wisdom. Thank you!!!

I sometimes wonder if maybe she left here with her head spinning from all the advice and info we all gave her. Hopefully she will return and let us know what she decided to do.

Tony

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Lol!! I’m still here! I thought I knew what to do! I am trying to figure out if I should be transferring my 403b or leave it where it is and start a new one with Aspire? 

I called them and they sent me the forms. Now it’s just a matter of figuring out what is the best option from what I mentioned above!

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6 hours ago, Gina NY said:

Lol!! I’m still here! I thought I knew what to do! I am trying to figure out if I should be transferring my 403b or leave it where it is and start a new one with Aspire? 

I called them and they sent me the forms. Now it’s just a matter of figuring out what is the best option from what I mentioned above!

I think all of us here think you would be better off making future contributions to a low-cost index target retirement fund at Aspire rather than to AF's load funds with their higher ERs. And I think we agree that there is no big hurry about deciding on what to do with your AF account, as long as you don't make further contributions.

I second Tony's suggestion on signing up with Aspire, using the Vanguard TR fund he mentioned. After it is all set up, I think you should stop contributions to the AF account (if you haven't already done so). 

By the way, what percentage of your AF 403b is in the money market fund? 

 

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Last year, I started the transfer from my 403b with AXA to Security Benfit's NEA Direct Invest.  It took longer than expected because AXA was very precise in its requirements to leave and my "advisor" wasn't very helpful.  Juggling AXA, my state's TPA, SB, and getting all the paperwork lined up between the 3 companies was frustrating. I think reading up on the boglehead's three fund portfolio  helped me feel more comfortable self-directing, along with being able to ask questions here.   

Being able to access my account online  with SB and check its progress is neat, and it is a pretty user-friendly interface.    I used to check everyday, but now I just check the ticker tape to see if the index is up or down.  I'm trusting in compounding interest and the fact that the market will inevitably go up over time.  Currently, my portfolio is down, but I'm also mimicking the vanguard target retirement fund for when I want to retire and its asset allocation is very aggressive right now.  I just take a deep breath and leave the mix alone. I will probably check about rebalancing over the summer. 

I also had aspire as an option, and thought about making a 3 fund portfolio with them, but the cost difference over time swayed me.  I have a lot of years to go before I'm retirement age and I already wasted too much in fees with AXA.   Aspire was very quick to respond to questions and seemed very user-friendly, too. 

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You guys are catching on quick. Keep being stingy, the money is better off in your pocket then with those insurance companies.LOL I started out paying 2.5 % or more early in my career.I had to play musical chairs with investment companies to get where I am today .It took me this long to get myself to a O.O8% expense ratio. I wish I had this kind of help then. I would have been able to retire even earlier.  I commend you gals and guys for looking out for yourselves instead of just going with the uninformed  direction so many other teachers often go.

 

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This thread is awesome. My wife is a teacher and we have limited knowledge on investing. Just realized last month when she got her statement that it appears as though she's paying a little over 6% on front-end loads. We're going to pull out her list of options later tonight and see what else may be in there. We may be back with some questions!

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42 minutes ago, Kevin P said:

This thread is awesome. My wife is a teacher and we have limited knowledge on investing. Just realized last month when she got her statement that it appears as though she's paying a little over 6% on front-end loads. We're going to pull out her list of options later tonight and see what else may be in there. We may be back with some questions!

Wow!

What company charges 6%? Usually, in an employee-sponsored tax-deferred plan, those loads are waived. 

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Kevin P, welcome to the forum! It's wonderful when a thread here motivates a lurker to join in! Would you mind starting a new thread? This one is getting long and we don't want to highjack it. I think your 403b situation deserves its own thread.

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