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Gina NY

choosing a 403b plan

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19 hours ago, Gina NY said:

I have the form but thought I would wait until Aspire approves everything.

Gina, that makes sense. Good Luck. Once your in, it will be your duty to spread this knowledge to others you know in education who have also been confused by the often confusing 403b trap!! We all need to spread the truth to others so the crap going on in 403b land comes to an end and teachers and other employees are not cheated any further. You can rest assured you are not being taken advantage of invested with Vanguard.

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Gina,

Send the form over now so you don't forget. Just include a note that it's in the works now. That could even be part of the 'approval' process.

Congratulations- you should be very proud, I agree!

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I received an email saying it will take 7-10 business days for Aspire to get back to me. For now I’ll just wait until I receive an account number!

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3 hours ago, Gina NY said:

We also received this notice form our union president. Do you know what it means? 

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A 457 plan is very similar to a 403b with slightly different rules on when you can take out the money for retirement.

When he or she wrote: "This will remove any obstacle or concerns members may have about retiring with limited time." Sounds like a "catch-up feature." Catch up is already allowed by the IRS you can shelter more than the max allowed if you are over 50, but offering an addition plan would increase it big time. You are allowed to participate in both and invest the max in each plan. I had two plans for the last couple of years at my district, but I never used the 457b because I could not afford to save using both the 457b plan and the 403b. In fact, I could not afford the max just in the 403b! 

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It looks like your district is offering a “25% retirement incentive” to their employees who qualify for it. This is sometimes referred to as a “golden handshake”. The union and the superintendent have set up a 457 plan that can receive that 25% as well as cashed out sick leave. Otherwise the retirees would have to pay income tax on these moneys. Ouch! It could be a 457 plan available to all employees, although I think it’s more likely one set up for just this one purpose. The justification for encouraging employees to retire is to reduce the number of the most expensive employees, replacing them with young  inexpensive employees.

My district didn’t offer an incentive, just lowered the number of years employment required to retire to 15, and the minimum age to 50. The offer only existed for a year. I took it and went sailing!

You should ask your union about the NY state 457 plan! It’s outrageous that it’s not available to all district employees!

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3 hours ago, krow36 said:

You should ask your union about the NY state 457 plan! It’s outrageous that it’s not available to all district employees!

Thats my thought exactly. 

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I finally received my Aspire account number and  I just submitted my Omni Salary Reduction form with the new changes. Thank you again for all of your help! 

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42 minutes ago, Gina NY said:

I finally received my Aspire account number and  I just submitted my Omni Salary Reduction form with the new changes. Thank you again for all of your help! 

Welcome! Good luck.

Steve

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Gina

Give yourself a huge pat on the back for not being afraid to ask for help when your intuition told you that you could do better in your 403b choices. I am impressed with your follow through. So many teachers just don't care or just don't take the time to know. Sure its their money and their decision to do what they want to do with their money. But, they are unfortunately allowing the annuity salespeople and other high fee entities to maintain their control and influence in their school systems when they should be booted out. Have you read what Kevin P's wife was paying for her funds on a different thread? Unbelievable and very very unfair.

Teachers don't earn top salaries and in many states are woefully underpaid. Every penny they give up to high fee products is one penny too much. Just keep saving in your new 403b. Don't expect immediate results but overtime you will do better with a low fee   Vanguard Target funds. You will succeed.

 

Tony

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I hope it pays off in the end. Unfortunately I’ve been in the retirement system now for 20 years, so for 20 years I was paying high fees. When the Fidelity investor pointed out the high fees recently I knew I had to make a change. If it wasn’t for her I would have been none the wiser. I had no idea I had options when it came to investing in a 403b and to this day couldn’t tell you how I ended up with American Funds. More than likely the financial sales rep chose it for me. I trusted he was working for me all this time but just last year I started getting the feeling he wasn’t. (It only took nineteen years to figure it out!)  My accountant pointed out how I got taxed unnecessarily when the financial sales rep had me transfer money to a different type of account. The final straw was speaking to the Fidelity investor. That’s when I knew I couldn’t sit back and let this keep happening. He was definitely not working for me or watching out for my best interest. I understand that this is his livelihood and that this is how he makes money, but he can do that elsewhere now. 

Anyway, thanks to all of you for your guidance and support. You were very patient and answered every single question I had! I’m sure I’ll have more questions in the future but for now you have helped me more than I could have ever imagined. 

With gratitude,

Gina 

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